Simon Brignall Provides ten simple medical billing rules to help you chart your practice through the current difficult economic climate
THE PAST year has proven to be extremely challenging to all of us in the independent healthcare sector and when the economic climate is as unpredictable as right now, it is important to ensure your practice is best positioned to navigate through it.
Cash flow, outstanding debt, revenue optimisation and staffing have all thrown up a range of difficulties to independent practitioners during 2020 and it looks like 2021 will be no different.
With this is mind, I thought it would be beneficial to outline some simple rules for your practice that are good to follow in normal circumstances – but are especially important to put in place as we start 2021.
1 Make sure your work is invoiced as soon as possible.
It seems obvious, but time and time again practices fail to ensure this takes place – and that leads to a range of issues.
Some major insurers now enforce time limits for submitting invoices and if you miss the deadline, they will not pay.
Delays in invoicing means that problems are not highlighted in a timely fashion and can also be indicative of poor service to patients and a major contributor to their dissatisfaction.
Knowledge of any shortfall is delayed and patients assume the invoice has been settled, resulting in an unnecessary bone of contention.
Late invoicing of patients can also lead the patient to think that you are not serious about wanting payment.
2 Ensure your practice has a robust process for chasing outstanding invoices on a consistent and continual basis until they are paid in full.
Failures in this important area mean continued high levels of bad debt and means that received income is well below the activity of the consultant. Almost every practice that joins Medical Billing and Collection has an outstanding invoice backlog going back many years.
Debt levels are typically more than 20% of turnover and I have seen some over the past year that were 50-100% of annual turnover.
But, on average, consultant customers average debts of under 0.5% after signing up with us.
3 Make yourself aware of any bad payers so you can decide if you want to continue seeing them while they have outstanding invoices.
Continuing to see patients that are running up bad debts means you will end up regularly throwing money away. Having visibility around this key area means you can take steps to police this more effectively.
When we take on a practice’s backlog of outstanding invoices, there are often patients who have built up debt over years, yet the practice continued to see them despite never being paid.
4 Review the way your work is being billed to ensure that you are compliant with the rules and regulations communicated monthly from the Clinical Coding and Schedule Development group (CCSD).
Keep abreast of the CCSD’s monthly changes and establish if they affect your specialty and, as such, impact your income.
Practices commonly make billing errors through being unaware of these changes. Remember to review what rules each private medical insurer adopts, because each can choose their own variants.
5 Regularly review your procedure fees.
This is important if you bill to insurance guidelines, because these constantly change and these changes are not often communicated clearly.
You could be charging less than you could or more than you should. Practices still make wrong assumptions, leading to issues with insurance companies or revenue losses.
6 See that your price structure/policy is clear and that your patients are made aware of it before commencing treatment.
A clearly defined, well documented and communicated patient registration form is vital in the modern practice.
It will ensure no room for ambiguity when it comes to settlement. Transparency of fee and payment terms is of paramount importance
“Transparency of fee and payment terms is of paramount importance and is also a key requirement of the Competition and Markets Authority”
and is also a key requirement of the Competition and Markets Authority (see page 15).
7 Ensure you have access to key management information on your practice to allow you to make informed decisions.
This vital area is often overlooked. Losses can easily follow if access to accurate information is limited.
All practices should know where patients are being referred from, which insurers they are dealing with, how much income is derived from self-pay and the most common procedure codes that are carried out.
Consultants should know financially what is happening within their practice. This means having access to reports showing the revenue that was generated each month, the income that was received and what is happening with outstanding invoices.
Without access to accurate realtime data, it is difficult to understand which direction your practice is going. This means it can be very easy to come to the wrong conclusions and make illinformed decisions.
We provide access to our online reporting platform, which gives our clients 24/7 visibility to this information to assist them in running their practice.
8 Make sure you spend as much time as possible focusing on your core skill set – treating and looking after the patient.
Running a private practice is not easy and many tasks do not fall naturally into a consultant’s skill set.
If you and your secretary focus on the medical side of the practice, this will, in turn, make you more money, because you are focused on what you do best rather than spending time on tasks that can be easily delegated.
Take stock and consider what elements of your practice could be outsourced – this will enable you to generate more revenue.
9 Ensure you have a robust secure IT infrastructure in place to deal with your practice’s administration.
This can be a common weakness in many practices and is often only highlighted after it is too late.
Enjoy the peace of mind that comes from ensuring your business is on a secure platform and that your data is safe.
A wide range of options can facilitate this that are not difficult to implement and will ensure the practice data is secure.
10 Consider if you should join thousands of other doctors who have outsourced this crucial element.
For most consultants, the billing and collection is exceedingly difficult to manage and when done incorrectly it often results in consistent financial losses.
Outsourcing could be the best decision you make this year with many benefits. Our fees are calculated against received income, which means that our costs are correlated to the cash flow of your practice.
This is especially beneficial when your income stream is less predictable.
Outsourcing to a billing company means that its capacity is on tap to ensure that this key role is effectively managed without service interruptions due to issues around access to staff.
Simon Brignall is director of business development at Medical Billing and Collection