BILLING IN GROUP PRACTICESToo many hands
on deck can
spoil your catch
With the forming of group practices increasingly popular among independent practitioners,Simon Brignall (left) reflects on their billing issues which can lead to administrative chaos if not properly understood and effectively managed
WE HAVE seen a large rise in the number of consultants who decided to form groups over the past decade.
This makes a lot of sense, as they can benefit from economies of scale by sharing costs for administration, marketing and other overheads.
There are often other benefits such as increased patient footfall driven by the group’s reputation and the ability to effectively manage holiday and sick cover.
Groups can lead to improved quality of care, by having several doctors working together within the same specialty yet with each having specific expertise within their own subspecialty.
The current drive towards the provision of patient-reported outcome measures (PROMs) will only support this trend.
Groups can also benefit from increased volume, as insurance companies and GPs are more likely to refer patients to them because they know they have capacity and expertise within their field.
They can choose to adopt from a wide range of structures depending on their group dynamic and specific needs. The simplest is a virtual model that is effectively a branding exercise. It may include a website, but the various consultants continue to work as independent practices.
There are more formal models such as forming chambers, limited liability partnerships or limited companies. These group structures may also include foundingpartners and have rules around the distribution of funds and the allocation of costs.
Groups clearly provide many benefits, but we find that unless a close eye is kept on the practice’s administration side, they can very quickly run into difficulties.
At Medical Billing and Collection, we partner with a wide range of groups across various specialties.They have experienced many common problems such as those highlighted below.
Groups can easily become victims of their own success. Coping with the volume of activity generated is the single biggest issue to deal with.And the more successful the group, the bigger this issue becomes.
The level of administration needed as a result of consultants working together is often underestimated.This covers all aspects, from the raising of the invoices to the volume of phone calls and emails that require answering, dealing with private medical insurers as well as clinics and hospitals.
Often the first thing to suffer is invoices being raised in a timely fashion. The delay in bills being sent out can quickly lead to greater debt, as there is a knock-on impact to the reconciliation of payments received and subsequent raising and chasing of shortfall invoices.
This situation can easily escalate, as the busier the group practice becomes, the less time is spent on this function, resulting in a backlog of work which has not been billed and so remains uncollected.
In some cases, this can result in consultants earning less money than they did before they formed or joined the group, which obviously defeats the point.
One group practice, established for under a year, joined us with a backlog of outstanding invoices amounting to over £250,000. I often take on groups owed much more. Our average bad debt rate is under 0.5%.
Groups who employ administrative personnel need to make binary decisions about staffing to cover the workload. As the group expands or contracts, it can be difficult to ensure there is capacity and adequate cover to manage issues.
They may suffer from a key person dependency and that is a major factor in why they often choose an outsourced solution. It provides them with excess capacity when required, tied to a cost structure linked to received income.
Another benefit I often hear during client reviews is that the patient experience has been improved because staff are freed to focus on each patient’s specific needs. This benefits the group financially from increased referrals and quicker responses to new inquiries.
Billing and pricing
Another headache for groups to manage is the various pricing policies that each consultant uses. This can occur by choice that reflects the consultant’s expertise and experience.
But more commonly this is as a
“A headache for groups to manage is the various pricing policies that each consultant uses”
result of the individual contractual terms the consultant is subject to by the private medical insurance companies. Each consultant can have a different fee schedule for their consultations and their procedures for each insurer.
This has become more prevalent over the past decade as new consultants are restricted to set consultation fees with Bupa and AXA and sometimes other insurers, whereas older doctors may have their own tariffs for all or some of the companies.
Bupa and AXA also mandate that all new consultants must bill their procedures to guidelines. These provide set fees for procedures using Clinical Coding and Schedule Development Group (CCSD) codes, specific to each insurer.
On top of this, some established consultants, even if not restricted by insurers, can choose their own fee policy: they can choose to either match insurers’ guidelines, or set their own fee tariff.
Each can also have their own fee schedule for procedures for self-pay patients. Some consultants require their fees to be collected directly from the patient or alternatively as part of a fixed-price package and this can vary depending on the location or treatment type.
This requires the group to maintain accurate records of the price structures and payment pathways used by each consultant.
If this wasn’t enough, somebody needs to be responsible for keeping up to date with the ongoing changes that occur within each insurer’s schedule and the changes to the CCSD schedule to ensure the practice bills correctly for each consultant.This can often prove to be challenging and, if done incorrectly,can lose the group tens of thousands of pounds in lost income. We’ve seen it. Groups that incorrectly invoice insurance companies also suffer from delays in payments, recoups and, in the worse cases, derecognition.
Reconciliation and chasing
The most common problem groups face is keeping on top of the reconciliation and chasing process. In a busy group, this is quite often the first task that gets deferred as they prioritise their day to day workload.
Reconciling monies against outstanding invoices is a vital area, as only after the payment is allocated to the appropriate invoice can you have visibility on how much money is owed.
With insured patients, this is key, as only once this process is complete can a separate invoice be raised to the patient if there is an outstanding balance due.
These shortfalls occur when the full value of the invoice is not reimbursed by the insurer. This means many practices can easily run up a backlog of outstanding invoices and, with a group structure, this issue is amplified due to the volume and often mixing of the funds received.
To chase outstanding debt effectively, you need a process in place that is carried out routinely and ensures you resolve any queries.
Quite often when groups get into trouble, their aged debt quickly spirals, which leads to cash flow difficulties. Even when they take steps to remedy the situation, it is often only a short-term fix and the problem recurs worse than before.
Depending on the model the group choses to adopt, there can be different arrangements concerning payments and bank accounts.
Formalised group structures may have one pooled bank account or sub-accounts to put payments into.
Insurance billing is normally processed using the individual consultant’s provider number.Some groups have their own provider number shared by all members, but this is less common.
Payments need to be identified and allocated to the appropriate consultant and any subsequent onward payments made to them depending on the equity structure after accounting for costs.
Some doctors may also choose to practise outside of the group. However, this makes it extremely onerous on both the group and the individual consultant because payments can normally only be made to one designated bank account linked to that provider number, and the remittance advice can only be sent to one contact.
Even in those cases where a second bank account is an option, it is common for payments to be made to the wrong account. So there needs to be good communication between all concerned to identify what belongs where.
Virtual group structures are where consultants act as individual practices with payment going to each practice’s relevant bank account. These require reporting that allows for the recovery of costs for the running of the group.
It can be quite common for us to take on groups where we find that payments have not been going to the correct bank account and so the group has been missing out on income for years.
It is key to ensure that, whatever processes you implement, there is good visibility for all stakeholders involved and that reports are both accurate and up to date.
We recreate the group structure in our software, which allows for reporting at both the group and the individual consultant level.
This provides the group’s management an array of real-time reports at the group level as well as providing each consultant access to their own data.
Groups have many benefits resulting from their economies of scale. It is important to ensure these benefits are not lost by ineffective management.
It is worth reviewing your group to examine each of these key areas. If you find any parallels with any of the issues I have raised, then I recommend you seek the advice of a professional medical billing company.
Simon Brignall is director of business development at Medical Billing and Collection
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