"Backwards Thinking" Can Help Reimbursements

by William L. Abbate, ExecutiveDirector, COO, Quality Physician Services

First off, why don’t insurers pay?

BLIND ACCEPTANCE: Both of claim denials and of managed care contract fee schedules. Most practices don’t audit payments, and don’t keep track of the statistics that could help them negotiate better fees. Insurance companies are aware of this and know that a small practice probably will not or does not have the time to pursue better reimbursements or contracts.

FRAUD: According to the U.S. General Accounting Office, healthcare fraud and abuse is one of the country’s fastest growing white collar crimes adding approximately 10% annually to the nation’s elevating healthcare costs. Abuse within the healthcare system, especially in the form of medically unnecessary services, accounts for about 15% of expenses.1 But included in these numbers are also unintentional billing errors that can be prevented and reimbursed!

NOT BILLED: Many practices don’t think about how they can utilize their overhead, including personnel, space and equipment to provide additional care that they bill for.

So, what can you do to increase your practice’s bottom line? It lies mostly in BACKWARDS thinking, then moving FORWARD to make the appropriate changes.

Keep track of your stats. Run reports on the amount of your revenues that come from a particular plan. Does that business constitute enough of a percentage to continue the contract? Do you have anything to lose by renegotiating?
Prepare your plan and request a meeting with the insurer. You present generic statistics from your other providers to demonstrate the insurer’s negative value to your practice, and even infer that your practice would be better off replacing those patients with new patients under different plans. Make sure you document everything in writing.
Be aware of changing reimbursement rates. Certain physician-administered drugs, for example may have the same patient efficacy, but yield different reimbursements.
Get some coding & compliance training. Coding requirements change rapidly. If your staff are up on those changes, you could save a lot of time by preventing billing and coding errors in the first place. The small educational investment could yield exponentially greater reimbursements. You may even want to entertain a membership in the American Academy of Professional Coders for ongoing resource access.
Read your EOBs & compile your data. Determine trends for your practice from the EOBs. Are you delayed in submitting charges? Are you coding improperly? Make policy changes in your practice that eliminate these problems.
Collect co-pays & deductibles. Do you collect all of your co-pays & deductibles? If you don’t have consistent practices in collecting from your patients while they are in your office, you could be losing money through back-end collections and write-offs.
Track denial reasons & then go BACKWARD! Did the patient require a referral before seeing you? Was the insurance coverage verified? Was the date of service outside the range for the payment? Was there missing information when the bill was submitted? This information is a glaring signal that procedures and protocols in your office need to change earlier in the process. Think BACKWARD from the time the patient calls to schedule an appointment, and implement processes that PREVENT your claims from being denied in the first place.
Evaluate your personnel. Do you have the right people with the right skills to get the job done? Have you sufficiently trained them? Do they require continuing education to keep up with reimbursement changes?
Evaluate your systems. Could you purchase or replace a technology that can automate process, provide more accurate data, more easily? Calculate potential return on investment by evaluating practice management systems, EMRs, computer hardware, patient communication systems, even practice management partners who can share their technologies with you at a lower cost of ownership.
Consider adding services that generate revenue & increase reimbursements, such as in-house pharmacy, x-ray, recurring therapies, and other outpatient services. You may be able to leverage mid-level providers for better operational profits, or utilize your space and equipment more effectively.

1"Abuse of the Medicare Program," Medicare Fraud Update 3.1 (Hartford: UNITEDhealthcare, 1998) 3.