Proper medical billing is critical for any healthcare practice. Incorrect or delayed billing can have a huge impact on your cash flow and, ultimately, whether your practice thrives years into the future.
Even minor errors can cause significant delays and force you to re-work through the reimbursement process, costing time and money, so getting it right the first time is critical.
Creating medical billing best practices now can help your practice increase revenues and stabilize cash flow.
Understanding the Basics of Medical Billing
Medical billing involves creating bills for medical goods and services and then submitting them to health insurance companies and third-party payment authorities for reimbursement. The process is often completed by the healthcare provider in-house or by a third-party billing service.
While the process may seem simple on the surface, it can be extremely complicated because of the information necessary to process the bill.
- Patient information: This includes anything from their name and address to their medical history and demographic information.
- Procedures: The bill is required to set out specifically what services were performed and, in many cases, the rationale for those services.
- Diagnoses: The bill must also include any conclusions or diagnoses that the healthcare provider determined at the time of the appointment or service.
- Codes: Virtually every patient experience is associated with a code, from signs and symptoms to diagnosis. The American Medical Association develops the codes (called Current Procedural Terminology or CPT codes, ICD-9 and ICD-10) used in billing and updates them regularly.
Billing is also not as simple as just submitting a bill and waiting for payment. Medical billing must often be submitted according to a specific cycle, and there are several stages in the billing process.
The process essentially includes the following steps:
- Verification of insurance coverage
- Submit information to the patient management system
- Obtain medical records for proper coding
- Code documents and send for charge entries (the actual bill)
- Submit the bill via an electronic portal (or a paper claim in some cases)
- Payment posts must be reconciled
- Follow up with any denials
- Billing any remaining balance to the patient
This process takes time, which means that cash flow can see a significant delay between the time the service occurs and when the healthcare facility or practice actually gets paid.
Closely Follow These Medical Billing Best Practices
Following best practices for billing will help decrease rejected payments and streamline revenues. Ultimately, best practices will make the entire process more efficient and help increase the bottom line.
Compliance with Healthcare Regulations
Every medical professional knows that the healthcare industry is heavily regulated. Following federal regulations related to patient confidentiality and information access is critical. Any violation of these rules, even when communicating with an insurance carrier, can result in legal and financial consequences.
While not directly related to billing, these regulations all touch on the transmission of client data, which includes information delivered from a care provider to an insurance company. For instance, HIPAA requires that billers submit information in a HIPAA-approved format to assist with meeting confidentiality requirements.
Efficient Patient Registration and Data Entry
Data entry and recordkeeping is extremely time-consuming and cumbersome, but it is also critical for accurate medical billing. Bills often need not only general information about a patient but also medical history and related information.
If you can automate or decrease time on data entry in any way, that can save time and money. It can also decrease the likelihood of errors when data is only entered one time.
As an example, consider having patients enter their information before their appointment through their at-home computer or mobile device. They might also be able to use an iPad or similar device when they arrive at check-in.
Proper Documentation and Coding
Documentation and coding are critical for operations. However, coding and recordkeeping requirements will change from time to time. Keeping up with changing requirements can be difficult, but it is absolutely necessary.
Insurance and coding standards must be current to be accepted. Having a third party help out with these requirements can be very helpful.
Verification of Insurance Coverage
Submitting a claim to the wrong insurance carrier wastes considerable time and effort and ends up delaying payment. Make it a practice to verify insurance coverage for patients at certain intervals and ask about insurance changes at every appointment. While it may seem redundant, both you and the patient will appreciate faster claim processing in the long run.
Timely Submission of Claims and Follow-ups
The sooner you submit a claim, the sooner it will be processed and payment can be made. The same can be said with handling rejected claims. While handling rejected claims or claims with errors is never fun, it must be addressed if you want to get paid. Do not put this off. There are deadlines that often need to be addressed, and letting claims get stale will often decrease the likelihood of collection overall.
Revenue Cycle Management
The revenue cycle can take time. You should expect that there will be a delay and plan accordingly. Submitting timely claims and doing regular follow-ups can help with this process, but you should always keep in mind that it is a process—it requires diligence and discipline to stay on top of it.
Need Help Following Medical Billing Best Practices?
Increasing efficiencies wherever possible, verifying data regularly, and staying on top of the billing cycle can all help with efficient medical billing. While these can be difficult to implement in practice, it will be worth it.
Best practices for medical billing can help improve revenue, patient satisfaction, and compliance. If you need help with applying these best practices, contact us. Sorenson & Company, CPA, specializes in billing and accounting for medical professionals, and we can be a great resource for your team.