Technology Offers Many Resources to Achieve It
Practice Management Feature – January 2011
Tex Med. 2011;107(1):55-60.
By Crystal Conde
Narrowing the gap between caring for patients and receiving payment is vital to the financial stability of a medical practice. Thus, physicians are consulting experts and turning to technology to improve their practices' billing and collections and reduce the time staff members spend chasing overdue accounts.
To get a pulse on his practice's cash flow and the effectiveness and efficiency of its billing and collections methods, Lawrence Breitkreutz, MD, part owner of Abilene Cardiovascular Surgery, hired TMA Practice Consulting to conduct a billing and collections assessment in early 2009.
"Our practice consultant found some areas where we had room to improve practice efficiency," Dr. Breitkreutz said. "We contracted with TMA Practice Consulting because we wanted to be sure we were getting reimbursed as well as we could."
As a result of the assessment, he says, the practice began processing patient billing statements weekly. Before the assessment, the office generated statements only monthly. By increasing the frequency patients receive bills, Dr. Breitkreutz says, the office's payments have increased. (See "TMA Practice Consulting Offers Billing and Collections Service.")
In addition, the practice now appeals denied claims within a week. When office employees receive claims that warrant reconsideration for reimbursement, the practice has written procedures for each plan available for reference in the billing office. (See "Insurance Payment Woes? TMA Can Help.")
"Our consultant helped us determine where we were dropping the ball as far as not appealing insurance reimbursement denials. The practice continues to ensure employees are being aggressive with contesting claims," Dr. Breitkreutz said.
Two years ago, Dallas Neurosurgical and Spine decided to use technology to streamline its billing and collections practices. The seven-physician specialty group began using a product called A-Claim® to securely process patients' credit cards, debit cards, and checks via the Internet.
Once the office staff gives a patient an estimate of his or her out-of-pocket payment responsibility, the patient signs an agreement authorizing the practice to charge the authorized amount to the credit or debit card after the claim adjudicates. Patients stipulate a limit on the amount to be charged.
Kim Wooldridge, who handles claims and payments for the practice, says her favorite feature of the product is its ability to set up payment plans for patients.
"We give patients an estimate of what they'll owe," Ms. Wooldridge said. "If patients need to set up a payment schedule with a credit or debit card, the system automatically will run the charge through on a certain day for a certain amount."
Dallas Neurosurgical and Spine Practice Administrator Gloria Cochran says the practice has reduced the number of billing statements it sends to patients each month since it began using A-Claim.
"When it's managed correctly, we're not sending people as many statements. Many of our patients are set up on automatic payment schedules, and we're able to charge their surgery deposits to the credit and debit cards securely stored in the A-Claim system," she said.
Ms. Cochran also says processing payments online has helped improve office efficiency. And, the practice is able to use the online system at all six of its offices to process payments and check patients' insurance benefits eligibility.
"The front desk can check patients in and out more quickly by having the payment website readily available," Ms. Cochran said. "Plus, we get a report that breaks down the number of transactions by location and by type of credit card used. It also tells us how many times staff members accessed the benefit eligibility component of the system."
Debbie Elizondo, vice president of operations for Preferred Health Technology, Inc., the company that provides A-Claim, acknowledges that accounts receivable can be a sore spot for many medical practices.
Last year, the Medical Group Management Association (MGMA) conducted research, sponsored by Visa Inc., to understand how medical practices collect money from patients. MGMA received 2,149 responses from customers and members. Of those, about 1,500 responded on behalf of a physician practice.
Results of the research, titled Practice Perspectives on Patient Payments, showed:
- Thirty percent of patients leave the office without paying;
- Physician offices send an average of three billing statements before patients pay their outstanding balances in full; and
- Physician practices recover only $15.77 for every $100 owed once debt collectors take over a patient's outstanding balances.
"By having a payment process that allows medical practices to securely store patients' financial information and make charges once claims have been adjudicated, it saves staff the time involved in sending out multiple invoices and the expense of having to send accounts to a collection agency," Ms. Elizondo said.
MGMA found in its research that at the time of service, patients most commonly pay with a credit or debit card (41 percent) or with a check (35 percent). After receiving a billing statement, however, patients are most likely to pay with a check (67 percent), followed by a debit or credit card (26 percent).
Larger practices are more likely to collect patient payments after the time of service. Sixty-four percent of practices with more than 51 full-time employees collect payments post-service, compared with 49 percent of practices with fewer than two full-time employees.
Visa has created a process called Authorize First that allows patients to preauthorize use of their credit cards, not to exceed a predetermined amount, to pay outstanding balances after treatment. Other major credit card companies also offer this type of payment processing for health care professionals.
Stacy Pourfallah, senior business leader of health care products for Visa, says with the popularity of high-deductible health plans, patients are paying more out of pocket for health care. In turn, physicians are feeling more pressure to improve their collections processes.
She says it helps physicians and their staff to have discussions about payment responsibilities when patients are in the office. The medical staff can spend time explaining the preauthorization process to the patient and avoid mailing statement after statement to a patient's home once a claim has been adjudicated.
"Setting up a preauthorization payment process allows physicians and their staff to change the dialogue they've had with patients and make arrangements at the point of care. By getting the patient to agree to allow his or her credit or debit card to be charged for the portion due, a medical practice can streamline the payment process and collect patient balances sooner," she said.
In the current economic environment, getting paid faster is a priority for many physicians. Research shows adults continue to struggle to pay medical bills.
The Commonwealth Fund collected data from 2005 to 2007 that showed 32 percent of privately insured adults aged 19 to 64 had problems paying medical bills, had been contacted by a collection agency for unpaid bills, had to change their way of life to pay medical bills, or had been paying off medical debt over time. Data from the 2009 Commonwealth Fund Survey of Young Adults indicate health care costs continue to be a significant problem for those aged 19 to 29, especially those without insurance.
According to the report, 60 percent of uninsured young adults had trouble paying medical bills, compared with 27 percent of young adults with health insurance in 2009. In addition, 11.3 million young adults – both insured and uninsured – are paying off medical debt. Of those paying off debt, 50 percent have had to turn to family for financial help, and 39 percent were unable to meet other financial obligations, such as paying off student loans. (See "AMA, TMA Support Medical Debt Legislation.")
Billing and collections procedures begin with efficient appointment scheduling and end with payment for billed charges. By attending carefully to each step of the billing and collections process, physicians can eliminate problems that may cause a practice to lose money. TMA Practice Consulting recommends that physicians:
- Verify insurance benefits before a patient's appointment and confirm referral or precertification information before seeing the patient.
- Collect the patient's copay, coinsurance, deductible, and outstanding balances at check-in.
- File claims that accurately represent services rendered. If necessary, train any physicians who need to improve their coding skills.
- Investigate the cause of rejected claims, refile if necessary, and correct any internal problems that caused the denial.
- Track accounts receivable and implement a standard collection procedure.
Additionally, a sound collection policy is vital to the success of every practice, especially in today's tough economic environment. To improve collections, the Medical Group Management Association recommends the following:
- Write your practice's payment policy so staff and patients understand it clearly.
- Invoices should clearly show the amount and when payment is due. The faster you mail invoices, the sooner you'll be paid.
- Contact late payers every 10 to14 days to remind them of your payment terms.
- Print "address service requested" on your envelopes. The post office will provide new address information when a patient moves without providing a forwarding address.
- For more difficult collection situations, train your staff to be firm but courteous. You want to maintain a good relationship with your patients even when you expect to be paid in a timely manner.
- Some accounts will remain uncollected forever; learn to identify them early so you don't waste time and money pursing them.
Do Your Homework
Brian Bickel, vice president of sales for Solveras Payment Solutions, recommends that physicians looking for a credit card and electronic check-processing company choose a company with a good reputation. Solveras is a sales and marketing company that focuses on electronic payment services.
"Physicians should look for a company that has an association endorsement, which means it's the preferred vendor of choice for that group's members. Physicians should also talk to their colleagues and get references," he said.
Physicians also should choose a company that provides a host of services, including credit card and debit card transactions, online payments, payments by phone, and point-of-sale check processing, he says.
Mr. Bickel says online payments are a big area of interest for medical practices. In addition, he says point-of-sale check processing is convenient because it allows the practice to convert the check into an electronic deposit. The office staff doesn't have to go to the bank to deposit the check, and the information is converted electronically that instant.
"It's best if physicians work with a company that custom fits the products to meet the needs of the practice," he said.
Before physicians sign on to accept preauthorized payment for services in their medical practices, they want to know the patient's financial information is secure. Mr. Bickel says physicians should work with a processor that complies with the PCI Security Standards Council. The council is an open, global forum for the ongoing development, enhancement, storage, dissemination, and implementation of security standards for account data protection.
For more information, log on to www.pcisecuritystandards.org. On the website, you can access PCI-approved companies and providers.
Questions to Ask Vendors
TMA Practice Consulting has developed these questions physicians should ask any vendor before contracting for payment services:
- What processing bank do you use?
- What other associations do you partner with?
- What are the start-up costs, including the price of the credit card swipe machine and software?
- Are there any subscription fees, lease requirements, or minimum contract terms?
- Is your product or system capable of holding a card on file?
- What is the typical return on investment within one year? In other words, what can I save on processing fees and post-visit bill collections?
- Are there tools to help me track and report how much I recover month to month, year to year? If so, are they available at an additional cost?
- If processing is done through a practice management system, how exactly will it work?
Staff Training Key
When training staff members on payment systems, Mr. Bickel says the time allotment depends on the services the practice plans to provide. The most basic setup involves a traditional credit card swipe terminal, and Mr. Bickel says an employee can be trained to use one in about 10 minutes. More technical applications like converting point-of-sale checks or using payment gateways with computer Internet access might require up to 20 minutes of training.
Mr. Bickel says more medical practices are opting to use a practice management application, such as an electronic medical record database connected to an accounting system, to manage payments. He explains that the practice management systems contain an integrated payment module that captures transactions as they're generated. When dealing with a robust, complete practice management system, Mr. Bickel says, staff training could take up to one week.
Ms. Wooldridge says learning to use the A-Claim system was quick and easy.
According to Preferred Health Technology's Ms. Elizondo, medical practices will face some up-front costs, as well as monthly fees, when contracting with a credit card processing company.
She says the combination check and credit card reader costs about $375. If a practice decides not to accept checks, the office can purchase a credit card reader for about $150. Physicians who contract with Preferred Health Technology also pay a one-time implementation fee to set up the account, train staff, and test the card readers. Practices also pay a monthly licensing fee to access the secure Internet gateway.
Proper staff training on any new payment process a medical practice plans to implement is vital, Ms. Pourfallah says.
"Visa has found that setting up a consistent procedure for collections at the point of service is effective when all patients use the same process for making payment arrangements when they leave," she said. "Staff training is important, and physicians want to make sure the new payment options are presented in a clear way to patients."
Crystal Conde can be reached by telephone at (800) 880-1300, ext. 1385, or (512) 370-1385; by fax at (512) 370-1629; or by e-mail at firstname.lastname@example.org.
TMA Practice Consulting Offers Billing and Collections Service
TMA Practice Consulting offers a billing and collections assessment worth up to 20 AMA PRA Category 1 CreditsTM upon successful completion. During the assessment, a consultant reviews a practice's billing and collections procedures, staffing efficiency, workflow, and front office processes, and also analyzes the accounts receivable.
Assessment components include a collections system analysis that calculates collections ratios, reviews aging accounts, and compares the collections ratios to specialty benchmarks. An assessment can also identify possible causes of insurance payment denials by analyzing the practice's insurance verification processes, claims processing, and account follow-up procedures.
A consultant reviews practice workflow to determine how efficiently the practice manages billing and collections. During a billing and collections assessment, a TMA practice consultant examines the following documentation:
- Annual summaries of charges, payments, and adjustments per physician;
- Annual summaries of procedure codes and their frequencies;
- Accounts receivable aging report by payer by date of service, including carrier and self-pay balances;
- Payer mix analysis report by charges or payments;
- Sample of monthly reports provided to physicians;
- Current practice fee schedule;
- A random sampling of remittance advices/explanations of benefits for recently paid and denied claims for all payers;
- List of the current employees working the front desk and business office, including position and summary of responsibilities, full- or part-time status, date of hire, wage upon hire, current wage, salary history, job description, and benefits; and
- Copies of all forms used by the front desk and business office.
To inquire about a billing and collections assessment, contact TMA Practice Consulting by calling (800) 523-8776 or e-mailing email@example.com.
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Insurance Payment Woes? TMA Can Help
If your practice is having trouble with insurance reimbursement, use the TMA Hassle Factor log for unresolved problems. TMA collects and analyzes member complaints by documenting reimbursement problems. Participation by physicians in the Hassle Factor Log Program enhances TMA's ability to make reimbursement less of a hassle for its members.
To access the Hassle Factor, visit the TMA website. You'll need your user name and password for access to the log. Office managers may also obtain personal user names and passwords by contacting the TMA Knowledge Center at (800) 880-7955.
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AMA, TMA Support Medical Debt Legislation
The Commonwealth Fund reports medical bill problems or accrued medical debt affects about 72 million working-age adults in America. In addition, medical debt that has been completely paid off or settled can significantly damage a patient's credit for up to seven years.
In an effort to provide relief to consumers from a complicated collections process, the Texas Delegation to the American Medical Association House of Delegates submitted a resolution for the house to consider at its interim meeting in November.
TMA asked the house to support pending federal legislation that would exclude from consumer credit reports, within 30 days, medical debt that has been fully paid or settled. The AMA House of Delegates passed the resolution unanimously.
The Medical Debt Relief Act of 2009 excludes from consumer credit reports, within 30 days, medical debt that has been fully paid or settled that had been characterized as debt in collection for credit-reporting purposes. With support from TMA, the U.S. House of Representatives passed House Resolution 3421, the Medical Debt Relief Act, with a bipartisan vote of 336-82, and sent the bill to the U.S. Senate.
The Texas Delegation believes the provisions in the Medical Debt Relief Act would motivate consumers wishing to improve their credit score to pay off medical debt first, as this could be cleared from their record in 30 days rather than seven years.
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