ED Billing 101: Do you know what question to ask?
I wish I had a dollar for every time I heard the following: “If I had only spoken to you sooner” or “I thought I knew the right questions to ask”. These comments are common among ED groups who have made the wrong choice in billing vendors. Whether the group chose their vendor based primarily on company size, national presence, experience with the local radiology or anesthesia group, or conducted a thorough interview or RFP process, the process and selection is very difficult. Most billing vendors have skilled salespeople that know what to tell you, what not to tell you, and how to promote their product. All too often, I find that a thorough process was not completed and the group made a decision based on one of the aforementioned factors or worse yet solely on price .
Although this list is not exhaustive due to the constraints of space, here are some questions I would ask and myths to dispel:
Does this company have appropriate experience? Current or previous knowledge and experience in the local billing market is extremely important. While many billing companies claim that they know how to bill effectively in every market, I have personally witnessed breakdowns due to inexperience and lack of knowledge in the local market. Billing in one state can and is drastically different than billing in other states. Not only do you have local insurance laws and regulations, knowledge of the procedures and processes of the local HMO's and PPO's is critical to obtaining maximum reimbursement for the physician group. Inexperience can generate problems such as delayed obtainment of provider numbers, inappropriate discounts, and difficulty in managed care contracting. You will also find that many billing companies are owned or managed by former executives of the largest billing companies, thus they have experience well beyond their years of existence. One key to evaluating experience is to interview all clients of the billing company within your service area rather than a small list of their preferred references. Additionally, I would ask for a list of all former clients to interview. Myth #1: Larger billing companies are always a better option because they possess the most experience.
Does this company have a strong compliance plan? In today's environment, your billing company should have a strong compliance plan designed consistent with the OIG Model Compliance Plan for Third Party Billing Companies. When evaluating a compliance plan, make certain that the plan is more than writing on paper. Make sure they practice what they preach. Ask if charts are auditing internally and externally, who audits the charts, and whether the charts are audited prior to or after billing. Other hot compliance issues to ask of your billing company include: how and when are refunds processed, what are your procedures if you discover charts billed with incorrect coding, and what are your procedures for billing physician assistants and nurse practitioners. Blindly depending on your billing company to be compliant is a potential future liability waiting to happen. Myth #2: All compliance plans are created equal.
How did you arrive at your income projection? Outside of very unusual circumstances, if a billing company provides you an income projection without performing a chart audit, you should be very uneasy. The likelihood of accurate income projections (i.e. within 1-3%) is very small. Experience alone in a specific state does not lend itself to accurate financial projections as reimbursement is dependent upon payor mix, acuity mix, coding mix, and physician documentation. Furthermore, if you receive multiple financial projections from different companies and one is substantially different (more than $3-5 per patient), you should ask them to illustrate how they arrived at their projection. Make sure you understand their process so that you are not surprised if the projections come in short of the target. Myth #3: All income projections are accurate.
What is the total cost for Billing Services? Cost for billing services can vary greatly. Many companies charge a percentage of collections, while others charge a flat-fee per chart processed or a blended rates where you are charged a flat price for coding and a percentage of collections for billing. Additionally, some companies also charge add-ons for services such as credentialing, mailing of charts, mailing of claims, reporting, managed care evaluation, etc. Make certain that you ask the billing company whether their fee is all-inclusive or if they have additional charges. If your billing company is providing the full spectrum of services, billing fees for average locations usually range from 8-12% or $8.50-10.00 per chart. In my experience, most companies are unable to adequately provide the full spectrum of services for less than the aforementioned prices; therefore, your collections tend to suffer. If the income projection process was solid, you should choose the best net to the group regardless of billing fee. Myth #4: Most billing companies charge the same prices for the same level of service.
What type of Service is provided? Yes, the salesman does tell you that they provide all the services as good as or better than anyone. However, we all know this is not true. Services to scrutinize include but are not limited to the following: Telephone Support, Client Relations, Report Review, Managed Care Plan Evaluation, Internal Processing Protocols for all types of claims, Refund Processing Protocol, Methods to improve your reimbursement, Physician education, etc. There is a major difference in the level of service provided in our industry. Myth #5: All billing companies provide the same level of service and services.
While this is a snapshot of some of the questions to ask, these provide a good place to start. Use your resources, take time in the evaluation process, and make certain you are contractually receiving what they promise. Your billing vendor choice might be your most important financial decision .