Billing and Collections: Best Practices

February 8, 2012

These days, every dollar counts. Here are our top tips for making sure you collect what you are owed. A few simple steps can make a big difference in your bottom line.

You are not the only primary care practice looking to boost collections and smooth billing. Luckily, you can learn from the experiences of others.

Here are some best practices for getting money in the door, faster:

Engage all staff members-and physicians-in the billing and collections process.

This isn’t someone else’s job; everyone’s paycheck depends on collections.

Make sure everyone knows the importance of billing and how the group is doing. Some practices have had success generating competition among staff at different locations. Reward your best sites with a simple prize, such as movie tickets. 

All staff members should share in any "billing" or "accounts receivable" incentives to acknowledge their role in the billing process.

Oh, and as the physician, don't undercut your staff's efforts by randomly waiving copays or fees for individual patients. It can be a legal issue if you apply such gifts inequitably, and demotivating to staff you've told to focus on collections.

Make the billing office responsible for the registration and scheduling staff (through direct or dotted-line supervision).

It’s one good way to get everyone involved in collections. Registration staff has an incentive to keep accurate and up-to-date billing information; schedulers work to maintain a good payer balance, for example. The practice’s success, ultimately, comes down to collections. It makes sense to have other functions accountable to it.

Collect co-payments at the time of service-that is, before the patient sees the physician-not after the service is delivered.

Sometimes, offices collect money from patients when they check out. But why wait? Staff has to interact with patients and review their insurance at check-in. Collect the co-pay then, avoid having to re-touch the patient’s file, and speed the patient’s departure.

In fact, co-pays were designed for up-front payment. Their function is to make patients aware of the cost of their choices. Once they’ve seen the physician, it’s too late to make a choice.

Most important, up-front collection brings higher collections for most practices, and it’s worth finding a way to reorganize staff and procedures to make it happen.

Aim to collect 95% of co-pays up-front; actual collections are usually closer to 90%. Don't assume this is happening (even if you've said it should be). It's an awfully hard job for the front desk to take on. You can ask staff to keep a chart that shows when they don't collect and why. Then solve any hurdles.

Remind patients (politely) about their account balances at the time of scheduling and/or during the appointment reminder call.

Maintain your financial policy in writing. 

Give it your patients when they join your practice. Refer patients back to it during the patient collections process.

Don’t make ridiculous payment arrangements (eg, $5 per month for a $1000 balance).

Keep payment plans to 6 months maximum. It costs you $6 to $8 to process a claim, so don’t let your collection efforts cost more than you will eventually get paid.

Capture authorizations and referrals 48 to 72 hours before the visit.

Don’t wait until the last minute and risk not getting paid for services rendered. Contact the primary care physician, the patient, or whomever you need to, but if authorization is not available by noon of the day before the visit, reschedule the visit. 

Register patients-and verify their insurance-before their visit.

You can mail new patients registration forms as part of a welcome packet, post forms online, or ask questions over the phone. Ask patients re-visiting your practice specific questions about their address, insurance, and phone number.

Verifying insurance is even more important. Checking patient insurance cards is ok, but most don’t have an expiration date, and you shouldn’t count on patients to provide the right information for your basic business functions.

Calling payers to verify coverage, the average employee can register and verify insurance for 60 to 80 patients per day; online verification can go even faster.

If you can’t verify every patient’s insurance, make sure at least to verify it for patients getting services that cost more than your average service. In other words, make sure your biggest claims will be covered.

Another angle is to verify all services that may not be covered, such as nurse visits, immunizations, or lab tests.

If you find out that the patient is not covered-or doesn’t have the proper referral-contact him or her well before the appointment date. Inform the patient, and let him or her decide whether to keep the visit and pay for it out of pocket, find another provider, or call back to make another appointment when the discrepancy has been straightened out. Document everything; include the name of the staff member who processed the information.

Keep a record of verifications made, including the name of the customer service representative with whom you spoke. If the payer later denies the claim, sending along proof of verification may get the denial overturned. But be forewarned, many payer contracts now state that pre-certification does not a guarantee of payment-an effort to protect themselves if the patient is pre-certified then drops the coverage. The subsequent denial is known as a “retroactive denial.” Review new contracts carefully and negotiate.

Monitor unpaid or denied claims by major category.

All staff involved in billing-from registration to follow-up clerks-should review the resulting reports. The data shouldn’t be used as a disciplinary measure; rather, they should be used to educate and empower employees and can be presented in such a manner.

Track "error rates"-that is, percent of claims rejected-by staff function (registration, coding, etc). 

Again, use the data to improve collections, not to punish staff.

Train your staff on the system, your policies and procedures, and getting paid what is due from each insurance company. 

Don’t limit this to new employees-ensure adequate training by annual proficiency testing.

Use technology to speed cash flow. 

File claims and remit payments electronically. Use the Internet to inquire about the status of claims and to verify insurance. Work with your payers to maximize the electronic interaction and minimize the manual interaction.