We often have discussions about whether it’s more efficient to outsource billing in house. Just like setting up a practice, hiring employees, managing your own finances, we strongly believe you’re better off managing it yourself. If you outsource it how do you know they’ll do a good job?
If you aren’t convinced that you should do billing in house rather than give away 6% of collections (10% of income) that’s your business and you can spend your money any way you want.
Someone stated “my billing company is good at getting copays.” Guess what, we collect copays, coinsurance and deductibles at the time of visit. So when EOBs are posted most accounts are closed. It’s a major event at Goodyear Eye specialists when something is missed!
One day when I got back from a ten day vacation away from the office, I went in on Sunday. Took 3.5 hours to post EOBs, open mail and post payments/ sort checks, send held claims, check envelopes for patient bills, and follow up. My front desk lady has about five phone calls to make for things to sort out (and I was gone for seven work days). Four patients owe money, two of them under $15.
Assume it takes me another 0.5 hours to issue refunds and follow up on more stuff. That’s four hours in all. I posted $11,000 in payments (and none of these were patient payments which is even easier). A billing company charging 6% would charge $660. At four hours that’s $165 per hour. For a 2080 hour year that’s a $343,000 job. And that’s assuming that the billing company collects 99.5%. If they only collect 98% (which is still pretty good) that’s another $165 which is $825 for four hours, or $206 per hour, which amounts to $429,000 per year.
Of course it took me time and effort when I was seeing two patients a day to get this set up. Once I earn over about $429,000 per year then I’ll delegate more of the responsibilities, but for right now I’m barely scraping by.
So, don’t laugh at me when I say it’s cost effective to do your own billing!
Now that I’ve discussed the cost effectiveness of DIY billing, here’s how to bring billing in house and what questions to ask a billing company:
Although someone may have experience doing billing they may not have experience setting it up. Keep in mind you don’t have to do it all at once. For example you can transition Medicare in house first as these claims usually go through without problems and there isn’t patient responsibility.
Here are the steps to transition to in house billing (or to set up your own billing from the beginning):
1. Sign up or find out what your clearinghouse is for your practice management system
2. Get paperwork to switch to that clearinghouse for all of your carriers that support ERA. If your billing company lets you look at last 30 days of EOBs that should give you a good idea of which carriers there are. Usually major ones bcbs Aetna Cigna Medicare Medicaid plus many smaller ones. But some still do paper EOBs.
3. Fill out the paperwork. Once it’s done the ERAs will come into your practice management system. Obviously this takes different amounts of time for every company to respond.
4. For paper EOBs get the carriers to send to your office rather than billing company. Change your billing address from billing company to your office for all carriers. Tell the billing company to forward everything.
4. Definitely sign up for electronic funds transfers if you are new practice. When I was seeing two patients a day it was fun to do because I realized I was actually getting paid but a few weeks in it got old.
Questions to ask of potential biller:
Ask questions in other email for front desk dated August 7 bumped in email below- copay/ coinsurance/ deductible; narrow network and Medicare advantage plans, etc
What does it mean to hold a Medicare claim until deductible met?
What are some of the reasons Medicare claim is secondary? (You need to put this reason in your PM or claim gets rejected- still has commercial insurance, working spouse)
What are different places of service for a claim? (If they code your 66984 at office not ASC you aren’t gonna get paid)
How many statements do you send for patients that owe and how do keep track of them?
How long do you wait until delinquent account sent to collections? (Under 90 days)
What are common reasons for clearinghouse rejections? How do you handle it? (Check all demographics are accurate, name spelled correctly, patient last name used different from one on insurance card, spouse’s SSN instead of patient’s as ID number, ICD 10 codes don’t match diagnosis; ICD 10 codes not specific enough; handle it by phoning clearinghouse to find out why claim didn’t go through)
What are common reasons for zero EOB and how do you fix them? (Office out of network- bill patient or tell them to dispute with state insurance commissioner; prior auth needed- dispute with insurance company tooth and nail; most common is another insurance primary- have to phone company that gave this EOB and find out which insurance is primary; often two insurances point fingers at each other and patient has to straighten it out. This week I got $1800 or so for two 66982s and office visits because Medicare finally processed patients spouses death certificate; Medicare said bcbs primary due to wife’s insurance but she passed last year!; service not covered- phone company and dispute or bill to patient if ABN for Medicare patients signed; ask what ABN is)
What is a ICD10 code and what is a CPT code? What are some common CPT codes used? (If Ophthalmology experience ask difference between 66984 and 66982 for instance)
What are some common modifiers? What is -79, -78, -25, -26, -50? (When I asked the biller for my multispecialty group they didn’t know but the supervisor did. Garbage in, garbage out. I suspect they lost me tons of money since I knew nothing about modifiers and often didn’t use them)
As you will probably quickly see from interviewing billers they don’t know what they’re doing and losing a ton of money for you. Which is why I will always supervise my billing. I’ll probably always do it myself but if someone else posts EOBs and payments I’m still gonna watch over all of these things like a hawk and make dire claims are followed up.
Note: we know of someone who is paying 6% of collections simply to send claims and post EOBs- their office is still responsible for following up denied claims and chasing after patients who have balances!
Here’s my response when someone mentioned they had $70,000 in bad accounts:
Dude, in 3.5 years I’ve lost $5300, combined patient and insurance bad debts. I was pissed because the number went over $5000 recently! I’d probably have a heart attack if it was $70k. But if your salary is $630k rather than $700k I guess it doesn’t matter. Guys like me are just trying to scrape by!
If I hired a billing company:
1. I would ask them if they hold medi-medi claims until deductible met and provide me a list of claims held and when sent. If your state’s Medicaid allowed amounts suck then you’re getting pennies for the dollar and your company is costing you money
2. I would ask them for a list of all accounts in disputes/ follow ups with insurance companies and when they need action/ what has been done, as well as if list updated weekly.
I would pay close attention to if they follow up accounts $30-100; at 6% they’re getting $1.80-$6 which is barely worth their time but still a lot for you. I would make sure these accounts are worked to the bone. One phone call without follow up isn’t gonna cut it.
3. I would make sure they sent accounts over 90 days to collections and provide me a list so I could notate
4. For any unpaid accounts I would make sure they went into my PM system to put pop-ups to collect balances due the next visit. Especially true for repeat check PVD or intravitreal injections.
5. Audits: every month I would pick 10-15 office visits perhaps 3-4 Medicare, 3-4 Medicaid and the rest commercial for 92004 or 92014 and ask them to provide me with EOBs and account information. If not paid on full, I would ask why not and how often they follow up (look at item 2 above)
6. I would make sure if patients are denied for being out of network that the billing company notifies your front staff with copy of card so they know not to take that plan again. For example we got burned on a Cigna city of Phoenix narrow network plan. My receptionist now tells those patients we’re out of network.
7. I would make sure that if a deductible was missed, the billing company would notate in a pop up in my PM system to collect deductibles for future visits as well as the remaining balance.
Even if you run a mega operation you still need to implement the above. Show the above to your office manager and force them to implement it. Remember: staff do what you inspect, not what you expect.
That’s what I’ll do when (if ever) I get busy, or if I ran a five doctor practice. It’s just good business sense. A hotel or restaurant would shut doors if 10% of its customers didn’t pay.
Also, if you haven’t heard this from me before, if you collect patient responsibilities at the time of service most accounts will come back closed, making posting your EOBs a quick and almost effortless task. I’ve previously emailed, posting my charges and EOBs and following the above saves me about $160 an hour- which is a $320,000 per year salary job.
Seriously, I should quit my day job and do billing for you guys, preferably remotely from La Jolla or Kauai…
