Reed Tinsley recalls the moment with great clarity.
Tinsley, a Houston-based consultant with Horne CPA Group, was advising a gastroenterologist who was setting up a new practice. "Every time I work with new doctors, I make them physically go through the CPT book and place a check mark by every service they can render," Tinsley says. "About a quarter of the way through the book, this physician stopped, looked at me and said, 'Gee, I really need to know this book, don't I?' I told him, 'Only if you want to be paid for what you do.' "
This reasoning sounds simple. Indeed, the cause-and-effect relationship between billing for a service and collecting payment for it is fairly fundamental. But for many physicians, billing and collection is no easy matter. Preoccupied with providing patients with the best care they can, physicians often overlook the fact that running a practice is a business.
"I see it happen a lot--if you miss your window of opportunity, you end up performing a service that you never get reimbursed for," says Donn Diefenbacher, vice president of finance at New Hartford, N.Y.-based Centrex Clinical Laboratories.
Fortunately, observers say, efficient billing and collection does not require an MBA, just a little time to focus on something other than medical care. "There's nothing mysterious or complicated about it," says Lynne Northcutt-Greager, a consultant with Medical Group Management Association in Denver. "Revamping your billing and collection practices is really a matter of paying attention to the basics."
Tinsley suggests physicians begin the process of changing old habits by taking a good look at current billing and collection procedures. "Think of it as a tune-up, the same way you give your car a tune-up on a regular basis," he says.
Often problems occur early on, when patients arrive for appointments. Two mistakes that affect successful collection are common: One is the inability of front-desk staff to obtain necessary patient information, such as a Social Security number or insurance group ID number. The other is poor internal communication, which in time compounds the first mistake.
For example, when patient information is incomplete or wrong, the insurer will deny the claim. If the staff member who is notified of the denial fails to communicate the reason for denial to the front desk, the problem that led to the denial may never be identified, and the claim may never be paid.
At the office of Lawrence Levine, M.D., an Evanston, Ill.-based dermatologist, the goal is to update patients' insurance information annually at a minimum. "We try to update patient information at the beginning of each year, which gives us a reference point. But if a patient hasn't been here in six months, then we'll ask them at their next visit if their insurance has changed," says Gail Kavka, a member of Levine's staff.
Another common leak in the collection process is the failure to collect copayments and deductibles at the time of a visit. That hurts a practice because the cost of billing and collecting those payments--commonly $5--usually exceeds the copay and deductible amounts.
"We've recently begun collecting copays upfront," Kavka says. "With rare exception, patients don't seem to mind, and it makes life so much easier. We collect nearly 100% of our copays (at the time of the visit), and for those who tell us they've forgotten their checkbooks, we very nicely give them a statement in an envelope and ask them to mail it in as soon as they get home."
Likewise, Northcutt-Greager says, physicians need to develop the mind-set that insurance billing should be done as near to the time of patients' visits as possible. "The quicker you get out claims, the quicker you can get paid," she says.
Tinsley offers several benchmarks for this turnaround time. Office visits should be billed within two days of a patient's visit; all other services should be billed within seven days. Beyond those time frames, he notes, the process tends to break down and lead to delayed or missed billings.
At Harbour Health, an 11-provider family-practice group in Portsmouth, N.H., outstanding claims reports are pulled monthly and the insurance companies are called, says Patty Royer, Harbour's manager of managed care and billing.
"When (insurers) tell us they never received the claim--which we hear a lot--we fax it back to them right away," she says. "This works very, very well for us."
Royer also recommends keeping a close eye on explanations of benefits. "Many times an insurer will tell you to adjust something off; if you look at it closely, however, you may not agree with it. We find many errors . . . even when we've entered the information correctly on our end. So while it's a time-consuming task, you need to look over your adjustments and charges carefully when you post them."
At Evanston Northwestern Healthcare in suburban Chicago, that task is handled by a professional business office, which oversees billing, insurance follow-up, collection, customer service and cash flow for some 400 ENH physicians. The move toward centralized billing began in late 1997 and is scheduled to be completed next spring.
"Because we're working with such a large volume of claims, it's relatively easy to monitor if a CPT code is not being paid correctly (because we see the mistake repeatedly)," says David Randle, assistant vice president for the business office. "We can spot trends rather quickly, and then work to address the problem with the insurer."
Though insurance companies account for the bulk of payment problems, patients can cause collection headaches as well. Specifically, Royer says, "You don't want your efforts to collect payments to cost more than what you're trying to collect."
One of the most effective ways to ensure collection, Northcutt-Greager says, is to have a patient-account representative on staff, a person whose full-time job is working with patients having difficulties paying their bills. "Patients who have had repeated visits without paying are required to see the account rep prior to seeing the physician, to (make certain they) understand that they have an account balance and to make arrangements for getting it paid," she says.
"Physicians want patients to get the care they need without money being an issue, so often they'll convey a 'don't-worry-about-the-money' message to patients," she says. As a result, when the bill comes, patients don't feel any responsibility to pay.
Karen Titus is a Chicago-based healthcare and technology writer.