The Rehab Therapist's Guide to Organizing Billing Processes for Maximum Reimbursement

Most practice owners consider their billing and collections processes as the engine that keeps their practices humming, but your back-office operation isn’t simply a furnace you shovel charges into like coal. The challenges of blending software and people into effective billing workflows are real, and workflow problems will impact your cash flow and financial efficiency. With that in mind, here are several ways for organizing billing processes for maximum reimbursement.

Is your new practice a one-person band?

Many new practice owners are focused on the time and effort it takes to achieve liftoff, and thus find themselves bootstrapping their enterprises by trying to start small and do everything themselves. The temptation to save money and take the DIY approach is real—but so are the traps it can create. 

Practice management is about learning how to deal with the tyranny of the urgent: managing referrals, marketing to referral sources, answering the phone, setting up systems, and, oh yeah, actually treating the patients. If you’re hoping to succeed, you need to get all those things done, and done on time—which means you need to resist the temptation to do it all by yourself. 

However small you’re starting out, you need to have enough resources for administrative help: someone to answer the phone, schedule patients and marketing visits, verify benefits, get authorization for treatment, set up the patients in your practice management system, and ensure all patient treatment turns into billed charges. Here’s a few tasks you need to make sure you’re accomplishing regardless of staffing levels:

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Does your established practice have one person responsible for each process?

Once you have two or more people working with your billing and collections functions, you need to be clear on who is responsible for each operation or process, then follow up periodically to ensure they are accountable for completing their responsibilities. If everyone is responsible for a task, no one is.

Well-defined roles and responsibilities are essential in billing process organization given the complexity of the healthcare revenue cycle—even in a small practice. Depending on how you want to divide it up, the revenue cycle has at least nine steps or workflows that need to be accounted for:

You don’t need a nine-person team to handle each part of the cycle, but whatever team you do have in place does need to be clear on who is responsible for the completion and outcome of each workflow. You must also add treatment authorizations, health insurance verifications, banking functions, processing payer mail, and cash control to these workflows. 

Some items become more essential to complete in a timely fashion as billing volume increases.   Here are the things you need to handle as in a timely manner to avoid a backlog of incomplete work your team might not be able catch up with:

• Payer requests for additional information and zero-pay electronic remittance advice (ERAs) or explanation of benefits (EOBs) should be dealt with within five workdays. If they are not, they could age 30-45 days when the first round of follow-up occurs, which would require expensive rework of claims.
• Clearinghouse acceptance reports and claims with errors should be addressed daily. First-pass claims acceptance at the clearinghouse should be over 95%, and 99% is achievable.
• Line-item payment posting is essential for your collections tools in your software to help manage your accounts receivable.
• Working A/R should be scheduled for individuals on specific days each month to ensure each patient account is touched each statement cycle. In an eight-hour day, a person should be able to work 30-40 patient accounts. Working a patient account means working each open date of service and any credit balance that may exist within that account.
• Some practices separate patient collections from third-party payer collections. Patient collections should also be scheduled, and may need to be done in the evenings, so you should consider this when hiring for this role. Many practices deal with this requirement by rotating staff to cover these later hours. 
• For overdue patient payments, you must take action with patients if they do not respond to you within two statement periods. These actions can include weekly patient calls or assignments to a collections agency. Remember, the older the balance, the less likely you are to collect all that you are owed.
• Invest time ensuring you match each of your payers with the correct “minute rule.” Medicare and most Medicaid plans use the CMS 8-minute rule to determine how many units of the 15-minute CPT codes can be billed on a date of service, while others use the CPT Guidelines for Time-Based Codes (the mid-point rule or the rule of 8’s). Your billing software will allow you to pick the rule when you set up the payer.
• You may also be able to pick Medicare processing rules for your payers. Reviewing the payer’s website can help you decide which minute rule they need and if they require Medicare processing rules. Making the proper determinations can save you from delayed payment, payment review, and the negative consequences of a payer audit.
• Review your reviewing aging A/R each month with your team to identify those patient accounts that may require collection activity. It’ll also provide an opportunity to identify any errors in EDI setup that may be resulting in delayed payment and spot payers with whom you can participate in electronic remittance instead of receiving paper checks. It also gives you a chance to see which preferred provider payers may be candidates for a change to “out-of-network” status due to high denial rates, poor payment, and high administrative burden.

Are you outsourcing your revenue cycle management?

Your team still has some significant responsibilities even if you outsource your billing and collections functions. You will need a person who is knowledgeable in billing and collections as well as basic electronic data interchange (EDI) and credentialing requirements to liaison with your revenue cycle management (RCM) vendor.  Your team is also responsible for tasks like:

• Adding and removing therapists from the practice management system;
• Maintaining therapist credentialing and national provider identifiers (NPIs);
• Correction clearinghouse errors for coverage issues and demographic input errors;
• Fulfilling payer requests for information;
• Responding to record requests from payers and other third parties; 
• Reviewing collections activities and denial rates; and
• Having regular meetings about A/R performance and RCM key performance indicators (KPIs).

In summary, whether you do your billing and collections activities in-house or whether you outsource, you don’t get what you expect, you get what you inspect. Educate yourself about the revenue cycle process, set up accountability through KPI reporting and regular review meetings, and be aware that as you grow, you will need to scale your administrative functions as well.

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Want more of John’s wisdom? WebPT’s Professional Services Member Value Program offers monthly Billing and Payer Compliance Bootcamp Webinars, compliance and billing blogs, Ascend Programing, and WebPT University courses to support you in your efforts to bill and collect wisely and efficiently—all available at no extra cost to WebPT Members.