The words “RAC audit” can strike fear in any medical practice. These audits are the process through which recovery audit contractors (RACs) review Medicare claims to identify improper payments, including overpayments and underpayments. Although these audits have been occurring for awhile, most practices still find them challenging to navigate. And, in just a few days—January 1, 2012, to be exact—the Medicaid RAC program will take effect. That means RACs will start reviewing Medicaid claims as well.

There are two ways RACs typically identify overpayments. The first takes an automated approach where the contractor uses proprietary software to find unambiguous instances of overpayment. This approach doesn’t include a medical record request.

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Keeping on top of your revenue cycle is not a once-a-week or twice-a-week job. Every day, practices should enter charges, submit claims, and work any rejections and denials. The more attention these various efforts get, the faster your practice will get paid.

Setting expectations is the key—especially in a busy office with so many other pressing duties to attend to. The only way to ensure a constant flow of revenue is to set expectations for physicians, coders, and billing staff regarding timeliness and efficiency.

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When a claim is denied, one of the first questions you should ask yourself is whether prior authorization was obtained for the services listed on the claim. If the answer to this question is “yes,” then you have to dig deeper to determine why it was denied—and how to prevent such denials in the future.

Unfortunately, claims with prior authorizations are denied more often than you might think. There are five common reasons for these denials that you should take into account and ways to avoid them:

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This is the second in a series of articles that will answer some commonly asked questions about different aspects of the revenue cycle and practice management.

It is no secret that prior authorizations are crucial to ensuring that your practice has the ability to perform all necessary procedures and tests on a patient—and to be reimbursed for those services. Although the process seems straight forward, it can still have some challenges and quirks that practices should know about. Today, we are answering some of the most commonly asked questions about prior authorizations:

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In today’s complex world of healthcare billing, practices can make some common—yet costly—errors that lead to incorrect billing, denied claims, and lost revenue. The good news is that many of these mistakes are avoidable with some adjustments to process, approach, and training.

Mistake 1: Incorrect data on the front end. This error often involves inaccurate patient demographic/insurance information or invalid insurance coverage. The main culprit: lack of verification. The best way to avoid this type of mistake is training, training, and more training! Staff responsible for patient check-in should be educated on the importance of collecting appropriate information and verifying insurance, as well as specific steps to accomplish these tasks. (Ideally, these processes should occur before the date of service to identify potential problems early, and to ensure patients understand their fiscal responsibilities.)

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Keeping track of prior authorization policies is difficult. Each health plan has its own set of requirements, which often change with regularity. Some Medicaid payers, for instance, want one “blanket” referral authorization before patients see certain specialists; the specialist isn’t required to obtain prior authorizations for every procedure. Other plans are much more restrictive, approving prior authorizations for specified procedures only when certain criteria/diagnosis’ are met.

The problem, of course, is that failure to obtain proper authorizations can have a drastic affect on practice income. The bottom line is simple: no authorization, no payment. Insurers won’t pay for procedures if the correct prior authorization isn’t received, and most contracts restrict you from billing the patient as well.

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Cross-training staff is a time-intensive endeavor, especially if you do it correctly. That’s why many practices hesitate to make it a routine part of their operations. But properly cross-trained staff bring more to a practice than the ability to “cover” for one another during illnesses or vacations—they help improve the bottom line.

Thoroughness is the key to a good cross-training program. Offering front-desk staff only a high-level view of back-office operations, for instance, is not enough. Instead, solid cross-training should reveal in real detail how front-desk tasks affect the back-end, and vice versa.

The goal is to encourage a collective mindset by making all staff aware of the true effect their actions have on both patient care and the revenue cycle. An effective program must:

• be well-planned;
• engage your most experienced individuals in the “teaching” roles;
• map out specific learning objectives for each staff member; and
• ensure the learning objectives are met.

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What images come to mind when you think about “customer service” in the physician’s office? Typically, most people picture front-desk staff greeting patients or answering phones. But, I believe, effective customer service should begin before a patient ever arrives at the office, and should include financial discussions as well as clinical ones.

I worked in physician billing and collections for nearly 18 years. Over that time, I came to appreciate that customer service, patient satisfaction, and reimbursement are all somewhat intertwined. The more you proactively communicate with patients upfront, the higher the back-end satisfaction on the part of patients and reimbursement staff alike.

Here’s what I suggest: Prior to a patient’s arrival in your office—especially if the patient is new to your practice—reach out to discuss your payment policies and expectations. Offer it as a courtesy so that patients are better aware of their out-of-pocket costs.

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