You are losing up to ten percent of your collections if payer underpayments are not being aggressively pursued by your outsourced medical billing company. It is simply a minimum requirement of being in business that medical billing services compare your payments to the amounts your payers have agreed to pay you.
If you make the decision to outsource medical billing or are currently outsourcing, then there are a number of critical tasks and process steps that your medical billing service should provide. These include scrubbing claims before they are submitted, systematic follow-up on submitted claims, posting denials, pursuing underpayments, using patient expected payment scores just to name a few.
This article focuses on just one of the key elements you need from your medical billing service: pursuit of underpayments. Pursuit of underpayments starts with a critical step: comparison of EOBs to your contractual allowables (the payment your payers have agreed to make for each CPT code). You cannot count on payment posters to catch underpayments with their naked eye; the comparison must be automated and systematic. It goes without saying that if you do billing in-house the comparison still should be done.
Payers have adopted underpayment techniques that are too difficult for a payment poster to spot on their own. Medical billing companies can design their process to battle payers underpayment techniques because they have an advantage over individual practices - they see EOBs for a given payer across multiple practices and multiple states. The enhanced scope allows medical billing companies that pay attention to identify patterns that might be overlooked by individual medical practices.
A disturbing pattern that can regularly be seen by a medical billing company that is paying attention is one where a payer will select a set of procedures and underpay this set of procedures across a large number of providers (often by the same amount). This will continue for about 30 days and then the payer will resume paying the procedures at the correct amount and begin underpaying a whole new selection of procedures.
Each individual underpayment is typically less than $20 and often less than $10. It is, however, death by a thousand cuts as these small losses can quickly reduce a medical practice's revenue by 5 to 10 percent. The tactics of constantly switching which CPTs are being underpaid and then underpaying in amounts that are small at the claim level make it hard for a practice to realize the magnitude of the money they are losing.
As you can imagine, these small underpayments switching from CPT to CPT would be difficult for a busy payment poster to notice. They will often spot the large underpayments (which occur with a much lower frequency than the small underpayments), but without automated comparisons the smaller underpayments are typically missed.
What does all of this mean to your top line? A medical insurance billing service that properly implements the pursuit of underpayments can increase your revenue by between 5 and 10 percent - and this is pure profit.
Identifying the underpayments is the first step of the journey. Dogged pursuit of the underpaid amounts is what actually drives up your practice's revenue. This pursuit needs to go down to even small underpayments because once a payer sees that the small underpayments are being pursued they typically taper off and contractual payments resume at the appropriate level. Much like a small child, the insurance companies are trying to see what the can get away with.
Copyright 2008 by Carl Mays II - 23802
If you make the decision to outsource medical billing or are currently outsourcing, then there are a number of critical tasks and process steps that your medical billing service should provide. These include scrubbing claims before they are submitted, systematic follow-up on submitted claims, posting denials, pursuing underpayments, using patient expected payment scores just to name a few.
This article focuses on just one of the key elements you need from your medical billing service: pursuit of underpayments. Pursuit of underpayments starts with a critical step: comparison of EOBs to your contractual allowables (the payment your payers have agreed to make for each CPT code). You cannot count on payment posters to catch underpayments with their naked eye; the comparison must be automated and systematic. It goes without saying that if you do billing in-house the comparison still should be done.
Payers have adopted underpayment techniques that are too difficult for a payment poster to spot on their own. Medical billing companies can design their process to battle payers underpayment techniques because they have an advantage over individual practices - they see EOBs for a given payer across multiple practices and multiple states. The enhanced scope allows medical billing companies that pay attention to identify patterns that might be overlooked by individual medical practices.
A disturbing pattern that can regularly be seen by a medical billing company that is paying attention is one where a payer will select a set of procedures and underpay this set of procedures across a large number of providers (often by the same amount). This will continue for about 30 days and then the payer will resume paying the procedures at the correct amount and begin underpaying a whole new selection of procedures.
Each individual underpayment is typically less than $20 and often less than $10. It is, however, death by a thousand cuts as these small losses can quickly reduce a medical practice's revenue by 5 to 10 percent. The tactics of constantly switching which CPTs are being underpaid and then underpaying in amounts that are small at the claim level make it hard for a practice to realize the magnitude of the money they are losing.
As you can imagine, these small underpayments switching from CPT to CPT would be difficult for a busy payment poster to notice. They will often spot the large underpayments (which occur with a much lower frequency than the small underpayments), but without automated comparisons the smaller underpayments are typically missed.
What does all of this mean to your top line? A medical insurance billing service that properly implements the pursuit of underpayments can increase your revenue by between 5 and 10 percent - and this is pure profit.
Identifying the underpayments is the first step of the journey. Dogged pursuit of the underpaid amounts is what actually drives up your practice's revenue. This pursuit needs to go down to even small underpayments because once a payer sees that the small underpayments are being pursued they typically taper off and contractual payments resume at the appropriate level. Much like a small child, the insurance companies are trying to see what the can get away with.
Copyright 2008 by Carl Mays II - 23802
About the Author:
Carl Mays II, Founder and CEO of ClaimCare Medical Billing Services, is an expert in the field of medical billing and medical practice management. Carl has been working with medical clients for more than 12 years. Prior to that Carl worked as a mechanical engineer for Boeing. Read more about medical billing companies at ClaimCare's medical billing blog.
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