Cash Flow Crunch
Although it is no longer January, I would still like to wish everyone a happy and prosperous 2004. This year will be filled with challenges, both old and new, that will require a fair amount of time and planning to organize and implement the appropriate course of action. The good news is that Medicare will increase payments, albeit not substantially, rather than decrease as originally announced. The bad news is that the malpractice crisis and several other major issues remain unsolved and/or problematic for many Emergency Physicians.
The business of Emergency Medicine is not unlike other businesses in that critical issues such as cash flow come to the forefront from time to time. Cash flow crunches arise or become exacerbated for a variety of reasons that include but are not limited to physician credentialing, physician documentation, coding, and chart flow to and within the billing vendor. While cash flow crunches sometimes are difficult to overcome in the short run, many are short-lived and result only in delayed cash flow rather than lost reimbursement. However, it is imperative to work closely with your billing vendor to determine the nature of the cash flow problem and aggressively work to fix the problem such that it does not prolong itself or become the type of problem that results in lost reimbursement.
Physician Credentialing
The most common culprit of the cash flow crunch is physician credentialing. This problem affects plans such as Medicare, Medicaid, BC/BS, Champus, and your contracted managed care plans that require provider numbers or credentialing prior to claims payment. Since the aforementioned plans usually represent 70% or greater of your reimbursement, the absence of provider numbers for even one physician can and probably will create a noticeable decrease in your cash flow. Furthermore, some states do not issue you a Medicaid number until you have a Medicare number. Absence of credentialing usually occurs with the addition of new physicians to the group or during the transition period to independent billing. Since Medicare and some managed care plans routinely operate 2-3 months behind, it is critically important that new physicians complete all paperwork 60-90 days prior to working shifts if at all possible. This same time frame holds true if a group is making the transition to independent billing. As the group leadership, it is not unreasonable to expect that all physicians complete their credentialing paperwork prior to receipt of their paycheck. Make certain that credentialing does not lag to the point where you exceed the timely filing for any carriers. Some carriers actually have timely filing at 60 days; therefore, you either have to have a provider number or file a claim without the forthcoming provider number to assure reimbursement at a later date.
Physician Documentation & Coding
Even the most subtle changes in physician documentation can create changes in coding and thus cash flow changes. Shifts in coding patterns are usually related to changes in physician documentation; however, they can and sometimes are the result of changes within the billing company. Work closely with your billing vendor to make certain that all new physicians are documenting properly. I would also advise closely monitoring the level of service (E&M) utilization by each physician. If you closely monitor these trends and compare physicians to the group average, you will likely become aware of any physician documentation problems and/or any coding changes within the billing company. The key to this issue is to be proactive such that you identify the problem before cash flow issues arise.
Chart Flow
Although we address chart flow last, this is probably the second most common reason for cash flow crunch. Changes in chart flow timing to or within the billing company will affect cash flow. Chart flow can be enhanced by timely completion of charting, adequate or replacement coverage of chart collation personnel during vacation and holiday periods, and pre-determined expectations of chart processing within the billing company. Monitor your chart flow to and within the billing company very closely. Make certain you understand the normal processing within the billing company such that you will be able to identify changes.
In conclusion, when you have the cash flow crunch, act quickly to reduce the affect. Monitor your practice closely. Make certain that all physicians and billing/coding partners are accountable for their part of the equation. Ask questions of your billing vendor and clerical staff as to the nature of the problem. These problems will occur from time to time; therefore, be prepared to implement change.