Is Your Billing Department Efficient?

Jamie Claypool, CMPE

It is unfortunate, but many physicians do not know the answer to the above question. Generally, the efficiency of the billing department is not questioned until there is a cash slow down. Being pro-active about the efficiency of your billing department is the best way to keep it efficient and to prevent cash flow issues.

Business owner physicians should have some knowledge of what actually goes on in their billing departments. Too many times doctors simply rely on trusted staff, without understanding the basics of billing or how to monitor the billing area. For the most part, staff are trustworthy, but a better job is always evident if someone is looking at the work and asking questions to monitor the efforts of your employees.

Here are 5 things you can do to measure the efficiency of your billing department:

• Look at dates. The date certain activities take place is important. You should be checking the date of service on an account against the date of posting (time between when a charge is generated and when it is put into your practice management system). Office charges should have the same date and there should be little or no lag time between the two. Hospital charges are a different matter; if you do not report your charges timely, then your staff cannot post them into your system - thus creating a lag time which negatively impacts cash flow. Hospital charges should be reported no later than 5 days after you have ceased to follow the patient, or have discharged her/him. Consistency in charge capture and reporting is a crucial step to greater efficiency in your billing department. Another date to check is the date that the account was posted as compared to the time the claim was filed. If your billing department transmits claims daily ( daily transmission enhances cash flow), the dates should be the same. If the employee(s) is not submitting claims daily, how long does it actually take from the date the account is posted to the time it is transmitted to the payer? This time frame should never be any longer than 5 days, or there could be a filing problem that is resulting in financial problems.
   

• Check your reports routinely. You should be looking at  practice financial analysis reports each month. These reports show charges generated, adjustments made, and amounts collected.  Compare these month to month to see if there are great differences in amounts - if so, this could be a sign of posting and daily balancing problems.  Practice analysis month end reports should run pretty consistently, unless you have been away for a vacation, or productivity has been reduced for some other reason. Payment amounts on these reports, if not consistent, could be a sign of poor follow up and collection work, or untimely billing. You should also review adjustments routinely to determine if the correct write off or contractual allowance has been taken. Sometimes, amounts greater than necessary are written off in error.
   

• Look at an aging analysis report. This report shows how much is owed to you and how old it is.  If most of the amounts in this report are in an older aging category (for example, 90+ days), it could mean that there may be a collection problem.
   

• Check collection notes on outstanding accounts on your computer. If you do not know how to do this, get your billing staff to show you how to bring up the collection notes.  If there is an outstanding balance that is over 90 days, check the notes to see what type of follow up activity took place on that account. Many doctors take the position that “if there is no documentation on the account, it was not worked by the staff”.  The collection note area should be monitored periodically. Most efficient billing departments make routine and consistent notes in their collection note area of the practice management system. These notes, or lack thereof, are a clear window on the effectiveness of your billing staff in collecting accounts due.
   

• Look at your EOB's (explanation of benefits, which come attached to a payer check) periodically. The EOB will have a message code on it which should help you to determine how the claim was paid. EOB's that have no payment on them should be routinely addressed by the billing department. If you have “0 balance EOB's”, ones with no payment, look the account up in the computer system to see if an appeal was done or if the non-payment of the account was addressed by the billing staff.

Jamie Claypool CMPE is a board certified practice management consultant who has contributed valuable advice and consultation to Texas physicians of all specialties. She is a noted authority on process improvement in physician offices. Currently, Ms. Claypool is president of the Spicewood consulting firm J. Claypool Associates, Inc. 512-264-3323 www.jcassociates.org.