You are losing up to ten percent of your collections if payer underpayments are not being aggressively pursued by your outsourced medical billing company. It is simply a minimum requirement of being in business that medical billing services compare your payments to the amounts your payers have agreed to pay you.
Medical billing services have a number of basic steps they should incorporate into their billing process. These steps should include using a claims scrubber, use of no-response calls, posting zero pays, pursuing underpayments, and using likelihood of payment scores for patient collections.
This article focuses on just one of the key elements you need from your medical billing service: pursuit of underpayments. Pursuit of underpayments starts with a critical step: comparison of EOBs to your contractual allowables (the payment your payers have agreed to make for each CPT code). You cannot count on payment posters to catch underpayments with their naked eye; the comparison must be automated and systematic. It goes without saying that if you do billing in-house the comparison still should be done.
The need for automated comparison to allowables is not because of any short coming with the average payment poster, but because payers employ sophisticated techniques to make underpayments difficult to identify. Medical billing companies with well designed processes can counteract these techniques because they have much more scope than a single medical practice. By scope I mean that they see what payers do across multiple providers in multiple states. This broader view of the world allows a billing company that is leveraging its scope to uncover payer behaviors more easily than a single medical practice.
As billing companies look across multiple clients they will frequently see the exact same CPTs being underpaid by the same amount by the same payer in a given month across all of their clients. The following month they will see the same payer switch to underpaying a different set of CPTs.
Although the amount of the underpayments may be small ($5 to $15), the totals can be quite large: upwards of a 10 percent net reduction in the payments the payer sends the practice. Despite the magnitude of the total, the constant hopping from CPT to CPT for underpayments and the relatively small amount of the underpayment on any individual claim makes the loss of revenue hard to spot - let alone pursue.
The pattern outlined above is why it is critical that a strategy for pursuing underpayments is not based upon payment posters picking up on the underpayments. Most payment posters will notice a large underpayment, but it is too much to expect them to spot a $5 underpayment.
This single action (comparison of payments to allowables) can increase a medical practice's collections by 5 to 10 percent. This is why you need to insure this critical step is being completed by your medical billing service.
Identifying the underpayments is the first step of the journey. Dogged pursuit of the underpaid amounts is what actually drives up your practice's revenue. This pursuit needs to go down to even small underpayments because once a payer sees that the small underpayments are being pursued they typically taper off and contractual payments resume at the appropriate level. Much like a small child, the insurance companies are trying to see what the can get away with.
Copyright 2008 by Carl Mays II - 15246
Medical billing services have a number of basic steps they should incorporate into their billing process. These steps should include using a claims scrubber, use of no-response calls, posting zero pays, pursuing underpayments, and using likelihood of payment scores for patient collections.
This article focuses on just one of the key elements you need from your medical billing service: pursuit of underpayments. Pursuit of underpayments starts with a critical step: comparison of EOBs to your contractual allowables (the payment your payers have agreed to make for each CPT code). You cannot count on payment posters to catch underpayments with their naked eye; the comparison must be automated and systematic. It goes without saying that if you do billing in-house the comparison still should be done.
The need for automated comparison to allowables is not because of any short coming with the average payment poster, but because payers employ sophisticated techniques to make underpayments difficult to identify. Medical billing companies with well designed processes can counteract these techniques because they have much more scope than a single medical practice. By scope I mean that they see what payers do across multiple providers in multiple states. This broader view of the world allows a billing company that is leveraging its scope to uncover payer behaviors more easily than a single medical practice.
As billing companies look across multiple clients they will frequently see the exact same CPTs being underpaid by the same amount by the same payer in a given month across all of their clients. The following month they will see the same payer switch to underpaying a different set of CPTs.
Although the amount of the underpayments may be small ($5 to $15), the totals can be quite large: upwards of a 10 percent net reduction in the payments the payer sends the practice. Despite the magnitude of the total, the constant hopping from CPT to CPT for underpayments and the relatively small amount of the underpayment on any individual claim makes the loss of revenue hard to spot - let alone pursue.
The pattern outlined above is why it is critical that a strategy for pursuing underpayments is not based upon payment posters picking up on the underpayments. Most payment posters will notice a large underpayment, but it is too much to expect them to spot a $5 underpayment.
This single action (comparison of payments to allowables) can increase a medical practice's collections by 5 to 10 percent. This is why you need to insure this critical step is being completed by your medical billing service.
Identifying the underpayments is the first step of the journey. Dogged pursuit of the underpaid amounts is what actually drives up your practice's revenue. This pursuit needs to go down to even small underpayments because once a payer sees that the small underpayments are being pursued they typically taper off and contractual payments resume at the appropriate level. Much like a small child, the insurance companies are trying to see what the can get away with.
Copyright 2008 by Carl Mays II - 15246
About the Author:
Carl Mays II, Founder and Chairman of ClaimCare Medical Billing Services, is a medical billing and process design expert. Carl has been working with medical clients for more than 12 years. Prior to that Carl worked as an aeronautical engineer for Boeing. Read more about medical billing companies at ClaimCare's medical billing blog.
