BY DON RODDEN, CPA, CHBME
"I'm a highly trained radiologist practicing medicine. I don't care how my billing is handled."
That statement costs radiology practices millions of lost dollars annually. It is both understandable and regrettable. My company has published many articles, blogs, expert guides, and case studies in the past 35 years, and they all presume something that may not be true: "I'm a physician. Why should I have to care?"
That's a fair question. The answer is, it can be very costly if you don't.
The reason is structural. If you were in many other professional fields, you would develop an expertise, hone it, become credentialed, practice your profession, and then be compensated "directly" for your work activity. If you happened to be entrepreneurial, you might form a business model around it and then, perhaps, be more involved in the underlying business and management activities.
The way money is transacted in health care, however, is completely different from any other good or service that we purchase. Patients pay premiums, but only a portion of premiums are truly paid as an insurance—that is, for shared risk. A sizable portion of the premium dollar is really a monetary pass-through for services that are known to be needed, such as annual checkups, preventive colonoscopies, mammography procedures, recurring prescriptions, etc.
Because of the power in amplified premium dollars transferred to the third-party payers, they are in a very strong position and financially motivated to not pay you for services that are needed or have already been performed. Because of the de facto opposition inherent within the third-party payer system, we have a structural problem that necessitates someone overseeing the integrity of your cash flow. To demonstrate the complexity and breeding ground for lost revenue, a very brief understanding of the billing process itself is helpful.
An Overview of the Billing Process
For every 10,000 exams you perform, there are more than 10,000 CPT procedures requiring identification and multiples of 10,000 of ICD-10 diagnosis codes to be applied to those procedures. That work alone complicates the billing/reimbursement process immeasurably. Each exam is then converted into an electronic claim that is sent through an intermediary (clearinghouse) to the initial payer identified by the patient as their insurer. This insurer responds with a notice and/or payment based on whether the patient is eligible at the date of service under their insurance coverage.
The next step is now interdependent on the first payer's response, which may include the following:
• payment applied to deductible;
• payment partially applied to deductible;
• payment applied to deductible and/or applied to copayment amount;
• claim denied for lack of medical necessity; or
• claim inappropriately denied. (Note: In my company's experience, most claims that we file are inappropriately denied, as we recover dollar amounts similar to the yield on all nondenied claims.)
Actions from this point forward are dependent on whether the patient has secondary insurance; the balance is billed to patient with ongoing notices, which may eventually escalate to a collection agency, if warranted; or if the claim is denied, in which case it may be refiled, researched for more information on the diagnosis, or appealed.
The comprehensive list of possibilities is longer, but no further detail is required to prove that each and every claim has a complex pathway from the time a patient purchases health coverage and requests service from you until you get a paycheck or partnership or shareholder distribution for the services you perform. Again, for every 10,000 procedures, this is occurring more than 10,000 times, and the sheer volume of individual pathways for each governmental and commercial insured patient is exponentially increased. In addition to the structural flow of the claim itself, there are further layers of complexity that are often procedure specific, such as the following:
• federal governmental laws and regulations;
• state specific laws and regulations;
• commercial payer policies and guidelines; and
• documentation requirements.
Measure Billing Accuracy
Many physician groups simply throw up their hands or blindly trust their internal staff or external billing process because the claim pathways are considered to be so challenging. And they are a challenge, especially if your billing partner is not detail oriented, transparent, or reporting minded and a system of reliable checks and balances doesn't exist in a culture of unwavering integrity.
The complexity of both structure and process are why it is essential to embrace your fiduciary responsibility—and economic incentive—to be certain that your billing process is yielding all that it should. The opportunities for leaks in the billing process are simply too considerable to ignore.
There are specific and measurable metrics that you or your representative can monitor to accomplish this. Whether or not you consider yourself analytical, these metrics can give you reassurance to ask the appropriate questions.
Physicians are often by nature nonconfrontational, an admirable personality trait in work involving peers and patients. But when accountability is lacking, financial loss is likely an end result.
If you are not certain the revenue you receive for the work you perform is on track, you owe it to yourself and your partners to take a next step. You may already know what needs to be asked and just need encouragement to take that next step. Or you may need to visit with someone competent and trustworthy to help you navigate the challenge.
Accountability to the billing process is similar to an image taken to assess a physical irregularity. If a patient presents with symptoms, a practitioner orders imaging tests to diagnose what is wrong. Radiologists compare an irregular image with how they know it should appear. Quality reporting is the financial "imaging" of the billing process. By using metrics to monitor performance, you can know whether your billing process is efficient or lacking.— Don Rodden, CPA, CHBME, is a principal at HealthPro Medical Billing, Inc. He is a past president of the Healthcare Business Management Association and a consultant to physicians for more than 30 years. He can be reached at firstname.lastname@example.org.