You may have heard about the Vermont doctor who was fed up with way medicine is practiced today and opened an office she calls “Simply Medicine.” The sole practitioner doesn’t accept insurance. Her fee is listed on a board in the waiting room: $2 a minute for labor, plus the cost of supplies.
This doctor’s system is an extreme way of avoiding managed care headaches and ensuring a steady cash flow. While most practices can’t afford to disregard insurance companies, they can improve their billing procedures to speed up third-party payments and keep patients’ accounts current.
Billing policy essentials
The first key to efficient billing is to have a clear financial policy in place for the practice — a procedure the Vermont doctor skillfully accomplished. This policy should:
- Be designed to inform patients and staff members about how payments work and who is responsible for them.
- Be given to patients on the first visit, printed in brochures available in your waiting room, included on statements and prominently posted at your checkout counter.
- Include a description of payment terms. If you expect payment or insurance co-payments at the time of service, let your patients know. List acceptable forms of payment. If you accept credit cards, ask for the expiration date and keep a signature on file so you can file for payment even if a patient forgets his or her wallet. Explain the billing process in detail.
- Lay out your missed-appointment policy, including how much advance notice you require for cancellations. You also should notify patients that after one or more missed appointments, you will charge them a fee.
- Staff members also should be instructed to mail bills on a timely basis and accounts should be reviewed every 30 days. Don’t forget to bill for services provided outside the office, such as those at a hospital, nursing facility or patient’s home.
|Tip: When insurance doesn’t pay|
Some practices bill patients for unpaid balances from insurance after 60 days. Patients should be told about this policy up front. If you adopt this procedure, it’s a good idea to get an insurance coverage waiver from the patient. Provide a clear definition of what constitutes an insurance copayment and when you expect that payment to be made.
Procedures and instructions
Provide written billing procedures for your staff, so they understand their role in the process. Such procedures will cover how to process bills and when to accept insurance copayments. The procedures should include instructions on collecting any prior balances at the time of service, to keep the practice’s cash flow healthy. Make sure to regularly update patient’s addresses, phone numbers and insurance information, including secondary insurance coverage.
Give your staff members instructions on how to follow up on overdue accounts. Scripts can be prepared to allow staffers to make a series of calls seeking to set up a payment plan or evaluate when a patient’s account should be turned over to a collection service. Consider turning one of your employees into the “financial counselor” for the practice. This person can work out payment plans with patients or help them overcome insurance problems.
Another key to efficient billing is to have staffers who are knowledgeable about the different payers your practice deals with. One strategy is to assign separate clerks to learn the procedures and nuances of particular insurers and have them develop relationships with their counterparts at those companies. This allows your staff to resolve billing problems faster.
Technology also can be a boon to medical practices seeking to streamline and rejuvenate billing procedures. Software is available that can help ensure charges and payments are compliant with reimbursement guidelines required by Medicare, Medicaid and private insurance claims. Virtually all of the claims-processing techniques are done on computer, so having your billing processes automated speeds up your processing time.
Consider outsourcing, but carefully
If you don’t want to spend the time and money buying a computer system and training staffers to operate it, consider outsourcing some or all of the billing processes, such as verification of insurance and obtaining precertification or authorization for managed care plans.
When using an outsourcing service, however, make sure that claims are properly followed up on and the service is familiar with the billing and reimbursement nuances in your specialty.
A constant problem in medical practice accounting and billing is accuracy. One of the surest ways to have an insurer reject a claim is to have a coding error or a mistake in a patient’s Social Security number or gender. A survey conducted by Asheville Orthopedic Associates in North Carolina found that 40 percent of its denials resulted from claims with simple mistakes or omissions.
Attention to a medical practice’s billing procedures can reduce bad-debt write-offs and improve the bottom line, which in turn provides more resources for patients and more income for its doctors. It helps physicians to do well while doing good.
Our experienced team
Need help with medical practice accounting? Contact our healthcare and medical practice team leaders, Jim Rice, CPA, and Christopher Davis, CPA. Or call Sol Schwartz & Associates, one of the largest and most deeply experienced San Antonio accounting firms, at 210.384.8000. You can also learn more about our medical practice accounting services here.