Emergency Physicians are in the unique business of providing patient care to every patient that presents for treatment, regardless of their ability to pay for the services. Patients range from the acutely and critically ill to those who simply utilize the Emergency Department as their only point of access to healthcare. Over the years, managed care payment reductions coupled with the increased numbers of uncompensated care has left Emergency Medicine in a budget crunch in many parts of the country. The delivery of excellent patient care and a thoroughly documented medical record does not guarantee appropriate reimbursement. As you might guess, appropriate reimbursement will only be realized through proper coding, billing, and collection procedures.
The complex maze of rules and regulations surrounding medical coding and billing tend to push most emergency physicians groups to outsource their coding, billing, and collections. As a physician group trying to identify a billing vendor, you will quickly find that you have hundreds of options. The medical billing industry is loaded with companies that range from small local vendors with little or no emergency medicine billing experience to the large firms with twenty plus years of emergency medicine billing experience. Over the last ten years, the industry has become very competitive which has afforded physician groups more options and often lower billing fees. While competition is good for the industry, it can also create the bait and switch scenario.
The bait and switch scenario has been utilized for years as a method to obtain the E.D. Staffing contracts. The contracting entity underbids the contract to secure their position as the provider of choice knowing that the Hospital Administrators often choose the lowest price option. After a short period of time the contracting entity goes back to the administration and asks for more money with the threat of providing their notice of termination. Since the administrator does not want more physician turnover in a short period of time, they often provide the requested additional funding to keep the contracting entity. This happens so frequently I am inclined to believe the tactic is planned rather than the result of errors projecting revenues and expenses. Many smaller private physician groups fail to obtain the contract due to their inability to submit the initial bid at a price they know will result in losses.
In the billing arena, the bait and switch tactic appears to be a more prevalent today than in years past. Most physician groups solicit bids and proposals from several different billing vendors. Billing vendors tend to audit medical records and provide estimates on charges and collections as well as their intended billing fee structure. All other things being equal, most physician groups choose the vendor that estimates the largest net collections (gross collections less billing fees). This decision can be very costly when the billing company provides an estimate that fails to materialize. While I do not believe most companies make a practice of overstated revenue projections, some lack the appropriate experience in that particular billing market or have flawed audit processes that result in inaccurate projections. As a rule, most billing vendors do not guarantee their projections due to the many variables affecting collections that are beyond their direct control. Variables include but are not limited to patient volume, acuity mix, socioeconomic mix, and physician documentation. Although the financial projection rendered by the billing vendor is the basis for the physician group budget; accountability for the accuracy of this projection is not realized for six to eight months. If the accuracy of the initial projection is poor, the physician group could be significantly over budget and faced with the prospect of making payroll cuts and/or changing billing companies. Since the decision to switch billing companies again is this short time frame is very difficult, many physician groups stay with their billing vendor even though their audit projection was inaccurate.
The moral of this story is exercise caution when evaluating billing vendors and their proposed collection rates. Often you will find that the company projecting the highest collection will not obtain their collection projection. Yes, honest mistakes are made in the projections process; however, you don't want to become a victim of the bait and switch. Ask each billing company to clearly explain their proposal and provide exact details how they calculated their collection projections. Since reimbursement and fee schedules are different in each area of the United States, utilizing estimated collection percentages for each payer class could be a recipe for disaster. Most good audits require that a good sample of charts are reviewed for financial class, coded according to physician documentation, and compared to previous data to make certain that your audit sample was representative. Additionally, a thorough audit designed to accurately project collections will involve knowing specific details regarding exact reimbursement rates for Medicare, Medicaid, Champus, and all insurance plans the physician group has contracts. Lack of information will yield poor audit results. Provide the data, ask questions, call current clients, and don't fall victim to the bait and switch. You will find that our industry has many excellent billing companies that provide a valuable service.