All Billing Proposals Are Not Created Equal
The decision to change billing and coding vendors or to utilize a billing and coding vendor for the first time can be a difficult and confusing experience. To complicate the matter, you know the billing and coding vendor is very important to the financial success of your physician group. Typically, Emergency Physician groups or hospitals either contact a number of billing and coding vendors to submit bids or issue a formal request for Proposal (RFP). RFP's tend to be more formal and usually clearly indicate certain criteria and services required for the selected vendor; therefore, the proposals tend to be easier to compare. However, if you have been through this process before and solicited proposals from multiple vendors, you were probably amazed at some of the differences in billing fee structures, actual billing fees, collections projections, and services provided.
I have seen a large number of proposals from different vendors in our industry. Quite frankly, some of these are excellent and appear to be well formulated with appropriate projections, while others tend to be less clear and contain financial projections and promises that will be difficult if not impossible to deliver. These types of proposals tend to come from less experienced companies or those who strive to obtain contracts through what I would call questionable sales tactics. While it is true that most in our industry want to provide a quality and reputable service, you need to be very careful when comparing proposals.
To compare multiple bids, I encourage you to ask questions as to how the bids were formulated, what criteria was used for financial projections, clearly understand the actual billing fees, make certain that the promise of services is included in your contract, and request documentation regarding their financial projections. While it is impossible for a billing and coding vendor to guarantee reimbursement at certain levels due to the number of variables beyond their control, you certainly need to understand these variables and how they were applied to your projections.
Financial projections are very difficult to accurately determine without a chart audit. The chart audit should contain a representative number of charts and take into account any seasonal volume variations that might occur. Additionally, I recommend that the audit data be compared to historical data such that you can determine if your audit sample was representative. The audit sample will typically show if you have physician documentation problems, the actual acuity of your patients, the manner in which patients are worked up by the physicians, missing chart issues, and registration issues. While a company may understand the normal reimbursement for an area based on experience or historical data, it is nearly impossible to accurately make financial projections without knowledge of the aforementioned elements. Proceed with extreme caution when working with companies who routinely provide financial projections without auditing charts and/or make promises that they will dramatically improve your average patient collection without reviewing charts. I would advise clients to make certain that a chart audit is performed to create financial projections and clearly understand how they came up with their numbers. That said, some situations require you to make projections based on less than complete data and don't allow for a chart audit. In those situations, you need to know that the variation between projected financial numbers and actual could be larger than normal due to the absence of data rather than to the efforts of the billing and coding vendor.
With respect to billing fees, make certain you understand how the fees are calculated and if any additional costs will be charged to you. Additional costs include but are not limited to postage, reports, travel, documentation feedback, etc. In some instances, the base percentage billing fee was clear; however, emergency physician groups were later surprised to discover the additional costs that made the proposal less attractive than others. Additionally, if you agree to a per chart billing rate, keep in mind that your billing vendor gets their payment prior to performance of collections. This arrangement can create additional problems if you decide to leave the vendor because they have little or no incentive to work your accounts. Create iron-clad contracts that cover you in the event of departure and require that they services promised are included contractually.
The billing and coding industry provides emergency physicians many very good options. When evaluating proposals, consider the methods and ask questions. The more information you have, the more likely you are to make the best decision.