Outsourced Medical Billing must pursue underpayments
Any strong medical billing process and medical billing company must compare insurance payments to your contractual allowables and aggressively pursue underpayments. If this is not happening then most likely 5 to 10% of your practice’s revenue is being lost.
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.
Pursuing underpayments is the focus of today’s article. This pursuit begins first and foremost with comparing the payment information from EOBs to the allowables outlined in the practice’s payer contracts. This comparison must be done in an automated manner and cannot rely upon payment posters catching the underpayments on their own.
The reason that comparison to allowables must be automated is because of the clever and systematic manner in which payers typically underpay claims. These underpayment patterns can be difficult to spot, but one of the advantages a Medical Insurance Billing Service has is that it sees payment information and patterns across many clients for many payers. This allows medical claims billing services that regularly and systematically compare payments to contractual allowables to spot patterns that a single practice might miss.
As billing companies look across multiple clients they will frequently see the exact same CPTs being underpaid by the same amount by the same payer in a given month across all of their clients. The following month they will see the same payer switch to underpaying a different set of CPTs.
Although the amount of the underpayments may be small ($5 to $15), the totals can be quite large: upwards of a 10 percent net reduction in the payments the payer sends the practice. Despite the magnitude of the total, the constant hopping from CPT to CPT for underpayments and the relatively small amount of the underpayment on any individual claim makes the loss of revenue hard to spot – let alone pursue.
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.
Identifying and pursuing underpayments can yield big returns for a medical practice (the average practice can increase collections by 7%). Therefore, it is imperative that your billing service is aggressively pursuing these underpayments on your behalf.
After the underpayment has been noticed it must be relentlessly pursued – this is what actually leads to top line improvement for your practice. Even the small underpayments cannot be ignored – to do so will invite larger and more frequent underpayments. Payers are constantly testing their boundaries. If they see that you respond at the first sign of stepping across the boundary they will quickly fall in line and pursue less vigilant targets.
Copyright 2008 by Carl Mays II
Filed under: Outsourcing