Here's a statistic that will make your eyes water: Medical practices report a gross collection rate of just 60 percent. For every $1 of medical services billed, the practitioner receives only
$0.60. You don't need anyone to tell you that leaving that much cash on the table can seriously impact the profitability and viability of your practice.
To make matters worse, each medical service travels a long and winding path before it shows up as a paid bill in your practice's bank account. How you verify, code and submit claims for insurance reimbursement will determine whether you are paid quickly, wholly or — in the worst case — not at all.
The good news is that many medical billing denials can be avoided. This article looks at the four most common billing errors that are costing you valuable time and money and gives pointers on how you can achieve a clean claims submission.
Mistake #1: Incorrect Coding
Medical coding errors are the number one reason why claims are rejected, accounting for eight out of every ten denials. Just about every physician has wrongly transposed a CPT or ICD-10 code or inserted the wrong two-digit modifier at some time or another, and insurance companies are quick to let you know you if you did something wrong.
Reducing coding errors is a huge part of the medical billing process. Practice management systems that flag confusing ICD, CPT or HCPCS codes and pick up any conflict between your diagnosis code and your procedure code go a long way toward eliminating errors. If the system is cloud-based, new billing codes and protocols will update automatically, ensuring that the practice never uses outdated codes.
Mistake #2: Misunderstanding the Insurance Policy Requirements
Each insurance policy specifies the process for billing medical services for reimbursement through claims. Failing to comply with the protocol is a red flag that increases the risk of insurance claim rejection, which in turn triggers a costly appeal and resubmission process.
Since each policy is unique, it's imperative that you review key submission details before making a claim. The typical medical practice generally needs to set aside at least four or five hours each week for reviewing policy requirements and changes — it's a good idea to have a single staff member function as the claims compliance person with responsibility of staying up to date on new billing issues. There are plenty of resources to help. Medicare, for example, offers free webinars to support staff in keeping up to date.
It also wouldn't hurt to have an impartial billing expert audit a proportion of claims to make sure there aren't any structural problems in how you are submitting bills.
Mistake #3: Failing to Cross-Check Your Patient ID Records
You may consider your patients like family, but that doesn't mean that you have the patient's current address, correct DOB, patient identification number and Social Security number on file. Getting just one patient identification field wrong on a claim form can trigger a denial. This is one area where it pays to have attention to detail.
Avoiding ID mistakes is simply a matter of double-checking your work when you're creating a claim. Be sure to review the insurance policy and check that the correct patient number is assigned, then verify that you are using the right number throughout the processing of each claim. Call the insurance carrier periodically to check if the patient has an active residence on file.
Improving the quality of your patient data at registration can reduce the potential for making identification errors quite substantially. Take the time upfront to verify patient ID numbers and double-check numerical dates, such as dates of birth, before your claims go out.
Mistake #4: Missing the Deadline for Filing
Most insurance companies require that you submit claims within a certain number of days after the medical service. Time limits vary — anything between 30 days and two years is considered normal — but in every case, the clock only stops ticking when the insurance carrier receives a valid claim. If you submit a claim with incorrect information, the claim will be denied. It's possible to fix the problem and resubmit the claim with the correct information, only now there's a good chance the carrier will deny it for timely filing.
Clearly, it is crucial to file claims in a timely manner. Do you have sound systems and workflows in place to file claims efficiently? According to a HIMSS Analytics report, one in three medical practices are still managing filing and denial processes manually, leading to errors and delays. The practices that use medical billing software packages, on the other hand, can access reminders and checklists to help ensure timely billing.
Outsourcing your billing to a specialist billing service can also be cost-effective. The value of outsourced companies lies in their ability to submit clean claims on time and thus collect a higher percentage of the billed amount.
Summing It Up
Medical billing errors are expensive mistakes that result in lost revenue and profits. The key to maintaining cash flow stems from understanding each insurance policy, keeping up to date with changes, being vigilant with data entry, and training staff in the latest codes and billing protocols. Be sure to review your billing practices and take the necessary steps that will positively impact your practice's bottom line.
For further guidance on how to increase cash flow, contact Goldin Peiser & Peiser in Dallas today!
Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.