The amount of money due from old AR accounts usually represents a significant portion of a medical business’s potential revenue. Getting that money from “potential” to “actual” revenue is the trick, though. The longer a bill goes unpaid, the less likely it is to ever be paid, so efficient management of old A/R is important.
The problem is that collecting on old bills, whether from insurers or patients is time consuming. Success requires a system that is applied by well trained staff who understand the billing codes and the way payers denote billing on claims.
Bill collectors who use old-school receivable collection agency methods of calling and threatening people with bad credit reports are not successful with medical bills. It takes an understanding of the bill and an ability to explain insurance coverage and the patient’s part in order to help them agree to make their payment. But again, that takes a lot of time, which in-house staff may not have available.
Separating the administrative process of billing from the medical practice by outsourcing to a medical billing company has been a successful solution for many medical businesses.
Why A/R Follow-up Management Is Such an Important Part of Medical Billing
In addition to having staff who can dedicate their entire work day to old A/R, there are several functional reasons a medical billing company will have more success with collections, both for patient bills and getting reimbursement for denied medical billing claims.
1. Medical Billing Companies Have More Resources
Medical billing companies have more resources to help them recover old claims that have been rejected by insurance companies. These resources include experienced billing staff, software programs that can track claim status and appeals processes, and relationships with insurance companies that allow them to get results quickly.
In-house billers may not have access to all of these resources, which can lead to a longer time frame for recovering claims. Additionally, medical billing companies are experts at billing procedures and know how to submit claims correctly the first time around so that they are less likely to be rejected. This expertise can save your practice time and money in the long run.
Because of the expenses involved, a medical billing company has access to more databases and software than in-house billing departments. Medical offices must make use of their software as long as possible because it is such an investment, but maintaining state-of-the-art software is part of the regular functioning of a good medical billing company.
2. Medical Billing Companies Have More Experience
In-house medical billing staff can only keep track of so many claims at a time. A good medical billing company has the systems in place to handle denied claims quickly and efficiently.
They also have the resources to follow up on unpaid claims and rework any that are denied or rejected. This allows them to avoid expired claims with insurance companies and government payers, which would otherwise be a large source of revenue loss.
Insurers may be more likely to work with a billing company than they are with an in-house biller. This is because the billing company is seen as being more impartial and less biased towards one party or the other. All of these factors together make using a medical billing company a much better option for recovering old A/R than using an in-house biller.
Medical billing companies also have more breadth of experience dealing with many different insurance companies and payers. Their staff will be experienced in navigating the various systems and all the peculiarities and requirements of each, which can lead to a higher percentage of claims being paid.
3. Medical Billing Companies Are More Accurate
Medical billing companies have the advantage of more experience and expertise when it comes to submitting and following up on denied medical billing claims, so they make fewer mistakes. Their experience with denied claims allows them to have a better understanding of how to work with insurance companies and payers.
Professional billers also know what to look for when a claim is denied and how to resolve it in each type of situation. Insurers change their requirements regularly and keeping up with all the details requires ongoing training.
In addition to denials, rejected medical billing claims are also a common occurrence, usually due to minor errors, such as misspellings or mismatched dates. Professional billers are familiar with all the little things that create problems and have a system for quickly “scrubbing” claims, or checking all the details for errors, prior to submission.
Outsourcing to Billing Companies Allows Medical Professionals to Focus on Patients
Medical billing is a huge headache for practitioners who try to manage it in-house. In fact, it has become a major factor in doctors taking early retirement because it is so annoying and time consuming that they feel they are spending more time and energy dealing with it than with patients.
There is a lot of responsibility, and even liability, involved and the whole process demands too much time and attention. Medical billing companies are staffed with employees who only expect to deal with billing and have years of experience in the field, so the process is just normal work, rather than a problem for them.
Whether you hire an accounts receivable management collection agency or a full service medical billing company to manage your old A/R, you will have the relief of more revenue and less hassle.
Something to keep in mind when considering hiring someone to manage your old A/R accounts is that you can start out with only outsourcing that task, and if it goes well, you may choose to outsource all of your billing. By working with a company that does all aspects of medical revenue cycle management (RCM) you have the option of making a much simpler transition because your systems will already be integrated.
At Medcare MSO, many of our clients have made this transition and found the process to be very smooth. All the research only has to be made once rather than repeating the whole process when looking for a service provider to add on billing, credentialing, or any of the other RCM services available.
How Medcare MSO Help Medical Providers Collect Accounts Receivable (AR)
A medical practice has two major types of accounts receivable: reimbursement from insurers or government payers and the part of a charge that the patient is responsible for. Collecting payment from each of these two involves a completely different process, but a medical billing company will take care of both of them.
Medical revenue cycle management (RCM) refers to the entire financial cycle, from determining insurance coverage and patient responsibility, through billing payers and collecting unpaid fees from patients. Thanks to rising expenses and reductions in reimbursement amounts, it is more important than ever for practices and medical institutions to receive payment for every service delivered, and in order for a practice to be sustainable, it is necessary for payments to be collected as soon after the service is delivered as possible.
Medical codes are complex and constantly changing, so it is difficult for medical staff to keep up. External billing companies have become an indispensable resource for medical organizations, not only for filing and managing claims, but for handling all aspects of RCM.
Here are five ways Medcare MSO can help in the area of accounts receivable.
1. Review of Previous Claims:
Most organizations have many unresolved, denied and rejected claims. Even minute details, like a misspelled name or wrong date will get a claim rejected, so when Medcare MSO begins to work on your RCM, we will review all the outstanding claims and get resolution. Previous clients have been astounded at the amount of additional revenue we are able to get for them because we have billers who are experienced in each specialization, and they recognize the problems and get errors corrected.
Rejected and denied claims and the resulting delays in receiving payments, puts unnecessary strain on medical staff, doctors, clinical and hospital administrators. This can create a vicious cycle, wherein issues with claims cause stress for staff, so issues are ignored, but the lost income creates another kind of stress for the practice. Unresolved claims are no small matter.
The Medical Group Management Association (MGMA) has found that no attempt is even made to resolve 50-65% of denied claims. That represents a tremendous amount of lost revenue.
2. Billing and Coding Logs Up keep:
Medcare MSO documents all claims, payments, denials and rejections, and claim resolution. We then study the results to find trends and determine how to avoid the problem in the future.
3. Monthly Billing Review:
Rather than just sending out a memo when an error is found, Medcare MSO holds monthly meetings that include all employees involved with accounts receivable, including everyone working on denial analysis, bill postings, documentation, CPT coding, and even data entry operators. By evaluating the service and providing ongoing training in this way, we maintain high levels of performance and operational quality.
4. Dedicated AR Teams for Accounts Receivable Recovery:
Keeping up with changes to medical billing codes, insurance plans and government payer rules requires a dedicated staff who are able to focus on those things. In addition to commonly used codes, each specialization has a subset of unique codes for its practices, and some of these can be very complicated. In many cases, such as surgery, there are bundled charges, but if anything is done outside the expected pieces of the process, special coding is required.
The increasing complexity of medical billing has made it necessary for a busy medical practice to get help with billing and claims handling. Medcare MSO has dedicated teams for tracking and managing denied and rejected claims to ensure practitioners are fully reimbursed for services.
5. Collections from Patients
In most cases, when a patient receives medical care, he or she is responsible for paying part of the cost in addition to what the insurer covers. This amount should be made clear when the appointment is set to avoid upsetting patients later with unexpected charges. In many cases, a co-pay amount set by the insurer is collected prior to providing services.
There are other situations in which the patient pays a percentage of the overall cost, so the amount isn’t known until after treatment. There is also the possibility that the diagnosis results in tests or treatments that incur unanticipated costs, so it isn’t always possible for the patient to know all costs in advance.
A medical billing service makes sure the claim coding is correct, submits claims and manages rejections and denials—and will also follow through with informing patients of their amount due and arrange payment. Assuring prompt and clear communication with patients keeps them satisfied that the bill is correct and also gets it paid.
Medcare MSO offers a full suite of services covering RCM from patient scheduling and insurance verification to old AR management. With a large team of billers and a system that we have developed over a decade in the industry, our success rate has satisfied new clients and inspired them to turn over even more billing and administrative functions. Give us a call today at 800-640-6409 or request a demo to discuss how we can help make your medical business more profitable and enjoyable.