Attack your billing
With yet more big changes on the way in the next few months for consultants in private practice, it is time to take stock of the way your practice’s billing and collection is working
There are ten main billing issues to address in many private practices. I’ll deal with the first five in this issue of Independent Practitioner Today and the remainder in April.
It may seem strange in this day and age but there are still a lot of consultants working in private practice who operate their billing process either manually or on a word processing and spreadsheet platform that are not even linked together.
Only last year, our company MBC had a new consultant client and the handover consisted of a few supermarket carrier bags stuffed with paper. These consisted of typed invoices, unbilled clinic lists and unreconciled insurance remittances
Even when these practices use some form of software programme to control their billing system, the frightening thing we see is that these software programmes are typically being run on laptops/ notebooks/PCs which are never backed up.
This means if the device is either lost or the software becomes corrupt or the hardware fails, then the consultant’s finances are put at risk from both a monetary and tax perspective – a tax inspectors’ idea of heaven.
When going into private practice, one of the first things consultants should do is ensure they set up its running on a sound financial basis with the correct infrastructure.
This would involve having a robust auditable system in order to facilitate the financial elements of the practice, including the ability to raise invoices and reconcile payments, combined with the facility to chase the outstanding invoices in a robust manner by phone and letter.
Whatever system is selected, they would also need to ensure this is backed up daily to ensure financial integrity.
If you are already in private practice but currently do not have the infrastructure in place, then I recommend you put it at the top of your list of action points, because the risk you run grows on a daily basis.
2. TERMS AND CONDITIONS
This has always been an important area but is very rarely addressed correctly within a private practice. But with the advent of the Competition and Markets Authority stipulations regarding pricing and the new General Data Protection Regulations (GDPR), this is now of paramount importance.
You need to have the terms and conditions written down and presented to the patient prior to any treatment taking place. This would typically take place on a ‘patient registration form’ and cover areas such as pricing, insurance shortfalls and any payment terms applicable, including where the patient failed to attend.
It is important for consultants not to forget that although they are treating the patient medically in the same way as they do in the NHS, the key difference is that it is being done privately and therefore the patient should be liable for any costs irrespective of what insurance policy they hold.
If the T&Cs are clear, it helps both the practice and the patient.
Over the past 27 years, I find this has always been the area that appears to give the consultant the most stress. The reason for this is that it is a very difficult area both within the insurance market as well as the self-pay sector.
The consultant has to decide if they are going to adhere to each insurance company’s price schedule and, if they do, they have to know the price schedule for each one, as they all have their own specific prices for each code provided by the Clinical Coding and Schedule Development group, (CCSD) which can differ by up to 100%.
On top of this, they have to decide what rate they are going to charge for their consultation fees. In some cases, the contract the consultant has signed with the insurer will dictate what they can charge for both the CCSD codes and the consultation fees.
Where the contract does not, then they need to decide what to charge and this also includes the self-pay sector for both consultations and CCSD codes. Specialists must typically make these decisions in a vacuum. Their peers will share medical knowledge, but, for obvious reasons, this does not apply to commercial information.
If the consultant gets this area wrong, it can lead to being incorrectly priced within the market and so they lose patients because the pricing is too high or they lose thousands of pounds due to the pricing being too low.
Our experience is that consultants typically do not charge correctly because they have either not done enough research when initially setting the pricing or they have not reviewed the pricing regularly. In many cases, it can be years since the pricing was last reviewed.
Once consultants have decided on the practice’s pricing policy, they will need to make sure they keep abreast of all the CCSD changes for the codes they use in their specialty.
These changes can occur on a monthly basis. There can be replacement codes, new codes, change of description and the use of multiple codes billed together.
All this can also have an impact on what can be charged for each insurer. Lack of knowledge in this area can often lead to undercharging for procedures.
Once everything above has been addressed,the practice then needs to raise t he invoices promptly. But it is not uncommon for the practice to be many weeks behind on this.
The longest we have on record is a practice that had not raised an invoice for two years.
So why does invoicing fall behind? It is typically due to the pressure of other work or where the consultant has not got around to doing it themselves.
That should be classified as a criminal offence, as it actually puts the practice at risk particularly from a cash flow perspective. And the longer time left before the invoice is raised also increases the risk of having bad debts.
There is now a real risk of actually carrying out treatments free of charge, as some insurers now impose invoicing time limits of between three and six months.
The practice should set the goal of billing within 24 hours of any treatment carried out, which will ensure good cash flow and minimise bad debts.
Before I cover the remaining five billing topics, either start addressing any of these billing apects in your practice or contact a medical billing and collection company to assist in solving these issues.
- 01494 763 999
- Medical Billing & Collection
Buckinghamshire HP7 9LP
More than Just a Billing Company