There are a number of reasons why medical billing for family practice may be ineffective in generating revenue; these include coding errors, inadequate documentation, and the inability to verify insurance, late submissions, and the mishandling of denied claims. Errors in billing will result in lost revenue, delays in payment, and increased administrative costs. The goal of this guide is to help you correct these issues by tightening up your front-desk processes; improving accuracy in coding; accurately documenting every service performed; and by tracking claims from the time they are submitted until payment has been received. Each challenge will be addressed in detail, as you will see each step-by-step solution to each problem.

What Makes Family Practice Billing Complex

 Medical billing for family practice differs from medical billing for specialty practices; family practice encompasses the entire range of patient medical needs. Each day you provide the following services to patients:

• Routine checkups

• Chronic medical conditions, such diabetes and hypertension

• Acute medical conditions

• Preventive health screenings

• Minor surgical procedures

A single patient encounter may include multiple billable components (e.g., the office visit, lab work, prescription medications, etc.), all of which must be coded correctly and billed properly.

Ultimately, family practice laboratories deal with:

• A high number of patient visits (volume)

• A limited amount of time to perform consultations

• A high volume of repeat patients

• Patients with multiple insurance covers

All of this adds up to pressure and causes the staff working on the billing processes to be rushed and to make mistakes increasing the risk of lower revenue.

1. Coding Errors and Inaccuracies

Errors and inaccuracies in coding can result in the refusal of a claim, as coding is essentially the process of converting clinical work into billable data. Examples of coding inaccuracies include:

• Billing for an incorrectly documented service (i.e., using a lower-level code than what was actually performed)

• Billing for an incorrectly documented service that was performed (i.e., using a higher-level code than what was actually performed)

• Failing to add modifiers when there are multiple procedures (i.e., failing to identify that the patient had more than one procedure or failing to designate the primary procedure when multiple procedures were performed)

• Selectively billing for services that were similar in nature (i.e., billing for a procedure that is similar to but not the same as a procedure that was billed on a different claim)

Additionally, one small error can result in either a rejected claim or an underpayment of a claim. For example: If you have both a consultation and a minor procedure done during the same visit, but your coder only sends the code for the consultation; You will be losing money on that visit due to the fact that the coder didn't submit the correct code for the minor procedure.

2. Incomplete or Poor Documentation

Complete and accurate documentation is necessary to support a claim, and the insurance companies will only pay you if you provide them with documentation that supports the claim. Examples of incomplete and/or inaccurate documentation include:

• Missing or incomplete patient history

• Not establishing a relationship between the diagnosis and treatment

• Not having enough detail about the procedures performed

• Not documenting the amount of time spent with a patient for a consultation

Insurance companies want to verify that what you provided was medically necessary and appropriate. If what you've written in your notes cannot be verified to support the claim, chances are the insurance company will deny or reduce the amount of reimbursement that is owed to you.

Example
High Level Consultation That Has Brief Notes That Do Not Support Level. Resulting In Claim Downgrade By Insurer.

Why does this happen?

Physicians are focused on providing care rather than documenting their care. There Is No Standardization Of Documentation. There Is Little Time to Document Everything.

What Is The Impact?

• Payment Is Often Less Than Expected

• Which Results In Increases In Audit Activity

• Payment Delays Are Common.

What Are The Solutions?

Utilize Structured Templates In Your EMR. Educate Doctors On Documentation Requirements. Document During Patient Encounter As Opposed To After. Include A Diagnosis, treatment plan, and follow-up in your documentation. Review Documentation Before Submitting Claims To Insurers.

3. Insurance Eligibility and Verification Issues

A Large Percentage Of Your Sales Of Services Are Lost Due To Billing Errors That Occur Before The Patient Receives Any Treatment From You.

Common Issues:

• Not Verifying If The Policy Is Active

• Not Verifying The Coverage Limit For The Patient

• Not Verifying That You Have A Proper Referral

• Not Verifying That The Patient Is Responsible For Any Co-Pay/Deductible Amounts Prior To Treatment

• Each Claim And Insurance Policy Is Different, If You Don't Verify The Policy Rules Then You Risk Denial.

Example:

Patient Comes To You For Treatment And When You Submit The Claim Later Find Out The Person's Insurance Has Expired. You Are Now Responsible For Collecting The Money From The Patient.

Why does this happen?

Front Desk is Overwhelmed With Workload And Cannot Complete Verification.

Systems Are Outdated/Not Updated.

Doctor Assumed That The Patient Would Be Covered Since He Had Previously Been Seen At Your Office.

What Is The Impact?

• Claim Denials.

• Patient Disputes.

• Delayed Revenue.

What Are The Solutions?

• Verify All Insurance Policies Prior To The Patient Arriving For Their Appointment.

• Automate Verification Process.

• Verify Benefits, Limits And Approvals Prior To The Patient Arriving For Their Appointment.

• Advise The Patient In Writing Of Any Expected Financial Obligations (e.g., Co-Pays/Deductibles).

• Maintain A Written List Of Verification Procedures/Requirements.

4. Claim Submission Errors and Delays

Even if a claim is correctly done, it will be rejected if it is submitted improperly or late.

Some common claim submission errors that create issues include:

• Missing required fields from the claim form

• Incorrectly formatted documents sent to payers

• Submitting to the wrong insurance carrier

• Failure to submit by the deadline assigned by the insurance company

The timeline of submission deadlines set forth by each insurance carrier are extremely stringent. Claims received after the deadline may sometimes be processed without review, but they are typically denied.

Example

Claim submitted 40 days after the service due to the insurer's 30-day deadline. Denied.

Reason for the problem

• Manual claims processing

• Inadequate tracking of deadlines

• Staff workload

Impact

• Lost income

• Rework to resubmit

• Disruption of cash flow

Solutions

• Submit all claims within 24 to 48 hours of the date of service

• Automate claims submission

• Utilize a calendar to remind staff of deadlines

• Utilize software to verify the completeness of claims before submitting them

• Assign one responsible person to track the status of all claims

5. Denials and Rejections Management

Dealing with denial and rejection is commonplace in medical billing; denying them will ultimately result in a lack of revenue.

The most common reasons for denied claims are:

• Incorrect coding submission

• Failure to provide the necessary documentation to support the claim

• Insufficient medical necessity for the service provided

• Exclusions listed in the patient’s policy or plan

Most medical practices do not analyze denial patterns and fix problems randomly instead of systematically.

Example

Multiple denials for the same coding issue. No one analyzes the trend of how many times this has occurred. Revenue loss continues.

Reason for the problem

• No denial management process in place

• Lack of metrics/reporting tools to track denials

• A focus on only new claims

Impact

• Lost revenue due to denial of claims from insurance carriers

• High number of denials

• Lower profit margins for the practice

Solutions

• Track every claim that has been denied

• Categorize each claim denial by reasons for denial

• Fix root causes

• Resubmit corrected claims quickly

• Set targets to reduce denial rates

6. Patient Payment Collection Challenges

It has become common for patients to contribute significantly towards healthcare provider revenues through direct payments made to providers by the patient or the patient’s insurance payer. Patients generally do not understand how much their treatment will cost; therefore, it is common for a patient to leave the office without making any payment and to delay making future payments until they have a clearer understanding of the payment process.

One example is when a patient has left the office without paying their co-pay and does not respond to reminders for the payment in the future, thereby making it bad debt for the organization.

There are multiple reasons that patients delay or do not pay their bills:

No clear communication about upfront costs prior to receiving care, as most practices use manual billing systems which do not send a statement until weeks or months after the service was provided

Inadequate follow-up systems for late or no payment

Poor collection policies that make it difficult to collect payments from patients

Cash flow problems arise in an organization when patients do not make timely payments. As a result, organizations also experience increases in bad debt and have higher administrative burdens associated with collecting payment from non-paying patients.

Examples of solutions include:

• Collecting co-payments when patients come into the office

• Giving patients a clear explanation of all charges that will be billed prior to receiving care

• Providing options for patients to make electronic payments via the Internet or point-of-sale

• Using SMS or email to send reminders about payments that are due for the next visit

• Creating a clear collection policy for your office

7. Regulatory and Compliance Burden

The complexity and frequency of changes to healthcare billing regulations creates a burden for healthcare providers because they must continually monitor and modify their practices to comply with these ongoing changes. For example, healthcare providers must stay abreast of:

• New coding rules

• Insurance company policy updates

• Changes to government regulations

• The need for audits

When an organization fails to comply with healthcare billing regulations, it may face fines and/or denied claims. 

For example 

When an organization uses outdated billing codes, the organization’s claims will be denied and the organization will face added compliance-related risk.

Because of the high rate of change and low rate of implementation of new procedures and processes in the billing department, many healthcare organizations fail to implement new billing codes within a reasonable time after the codes are issued and therefore risk violating healthcare billing regulations. 

This typically occurs as a result of:

• Inadequate staff training on newly issued billing code standards

• Failure to monitor for the release of new billing code standards

• Continuing to rely upon outdated processes in the billing department

An organization will suffer from increased financial penalties, increased risk of litigation and/or increased number of denied claims.

Solutions include:

• Regularly training your staff members

• Subscribing to receive notifications when new billing code standards are issued

• Conducting regular internal audits to determine if you are using the most current billing codes

• Using the most current billing software

• Designating a “billing compliance officer.”

8. Technology and System Limitations

If your billing systems are outdated, it can impede your whole billing process.

Some examples of these issues are:

• Manual entry of data

• Systems not working together

• Limited ability to find and fix errors

• Reporting tools are not efficient

All of these manual processes increase the number of errors and slow the work processes down.

An example would be staff entering patient information by hand, then having errors made during the entry causing claims to be denied due to the errors found when the claim is processed.

Why is this occurring?

• Using old programs

• No money to purchase new programs

• Fear of using new technology or changing processes

Impact

• Low productivity

• High error rates

• Payments are made very slowly

Solutions

• New billing program

• Integrate the EHR with the billing program

• Automate the processes you repeat over and over

• Use dashboards to see how you are performing

9. High Administrative Workload

Family practices are generally operated by small staff.

The workload for the staff is:

• Patient registration

• Verify insurance

• Code and bill

• Follow up on claims

With all these items the staff is rushed and it leads to mistakes.

An example would be a staff member trying to do multiple jobs at the same time and causing errors on the claims submitted because they are being rushed.

Why is it happening?

• Low staffing levels

• High volume of patients

• No automation

Impact

• Staff burnout

• Reduced accuracy

• Loss of revenue

Solutions

• Clearly delineate the job duties of each staff member.

• Use automation tools to assist staff with the tasks.

• Look for other companies that can help with billing, if necessary.

• Keep track of your staff's workload and performance.

10. Lack of Financial Visibility

If you can't see the numbers, you can't improve your billing.

There are three major areas of not having visibility in the finance side of your office:

• Denial rates are not tracked

• Collection trends are not tracked

• Revenue leaks are not analyzed

You cannot fix what you do not know exists.

Sample

Increased denial rates will go undocumented. Eventually, your revenue will be affected by it.

Why this occurs

• There’s no system in place for tracking.

• There is no one that has adequate financial experience.

• The emphasis is only put on day-to-day functions.

Consequences

• You will make poor decisions.

• There will be hidden losses.

• Your growth will be slow.

Solutions

• Create a system of metrics to track on a regular basis.

• Use reporting dashboards.

• Review your financial data each month.

• Make changes as necessary based on the metrics you receive.

How The Medicator’s Supports Family Practice Billing

As a Medicator, you receive a system of structured support to reduce your errors while increasing your revenue through billing services.

You will have:

• Accurate coding for claim submission.

• Complete assistance with documentation.

• Assistance with verifying insurance coverage.

• Help with tracking and resolving denied claims.

• Flow of automated bill payments.

This will allow for quicker approval and payment of the claims filed.

Practical Action Plan for Your Practice

By following these steps listed below, you will improve your billing system.

• Verify the patient’s insurance at the time of each appointment.

• Utilize all the correct and updated coding for each service provided.

• Write down in detail any and all services you provided to the patient.

• All claims submitted should be done so within 48 hours of the service being provided.

• Track any and all claims that were declined and take corrective action on the timely basis to have those claims addressed.

• Utilize billing software or a qualified professional to assist in your billing process.

Key Takeaway

If your billing process has flaws in weak operational procedures, then find the flaws in your processes to gain better revenue.

Concentrate your efforts on improving your speed in billing, accuracy of your claims, and consistency of your processes.