Medical billing is the backbone of healthcare revenue cycle management, but many providers experience significant challenges with efficiently and accurately billing patients and payers for services they perform.
The medical billing process can be a pain point for some providers because it involves an array of healthcare stakeholders and each step to getting paid relies on the previous interaction. Healthcare organizations must communicate across departments and payers as well as ensure that crucial information is properly captured in each step of the process.
Despite the long and winding journey, effective medical billing is essential for optimizing healthcare revenue cycle management and reducing days in accounts receivable.
Here are the four most common medical billing challenges and some tips for providers about how to streamline and improve the process.
Failure to capture patient information leads to claims reimbursement delays
The medical billing process usually starts at the initial point of contact between a patient and a healthcare organization. During this interaction, front-end staff must collect patient information that will lay the foundation for billing and collecting.
While ensuring a patient’s demographic information is correctly put into the provider’s billing system is essential, it is also key that front-end staff also verify health insurance status and coverage.
However, a ClaimRemedi survey found that eligibility issues are the top reasons for claim rejections, and about 8 percent of claims submitted are rejected because of eligibility problems.*
The survey stated that providers were not asking patients and insurance companies the right questions regarding eligibility, causing an increase in denials and rejections.
Healthcare organizations should regularly retrain front-end employees regarding patient registration and remind workers to check a patient’s eligibility for each appointment, not just the first one.
Neglecting to inform patients about financial responsibility spells collection issues
The main goal of medical billing is to collect the full amount for services rendered, but many healthcare organizations have recently experienced more issues with collecting payments from patients because of an increase in patient financial responsibility.
About 90 percent of the 12.7 million individuals participating in the 2016 open enrollment period selected a high-deductible insurance plan, according to CMS. The increase in high-deductible plans shifted healthcare payment responsibility to the consumer rather than the payer.
An Instamed report from June stated that nearly three-quarters of providers have witnessed an increase in patient financial responsibility in 2015, but a report from McKinsey & Company also found that providers only expect to collect 50 to 70 percent of a patient’s balance after a visit. Seventy percent of providers anticipate a month or longer to receive payments from patients.
To help boost patient revenue, healthcare organizations should implement financial policies that include estimating costs of services, informing patients about financial responsibility, and collecting some of the balance during a visit.
Healthcare organizations must also take steps to simplify patient bills. The Department of Health and Human Services responded to reports that medical bills were too confusing because of medical jargon and multiple requests for payments. The federal agency developed a contest that will award several innovators for developing an easy-to-understand medical bill for patients and a simplified medical billing system for providers.
Manual claims management processes create administrative burden, more A/R days
As most healthcare organizations know, submitting a claim involves more than just pushing a button. Providers must engage robust data collection tools, develop effective communication channels between front-end and clinical staff, and streamline denials management procedures.
Claims management is complex process for the entire healthcare organization, especially as more providers transition to data-driven value-based care models.
However, one-third of providers still use a manual process for denials management, reportedHIMSS Analytics.
Automating the medical billing and claims management process could help providers retrieve reimbursements from rejections and denials in a timelier manner. The HIMSS Analytics report stated that organizations with a vendor solution were able to better identify root causes of denials, manage resolutions, and reduce write-offs.
Inaccurate coding remains a top medical billing error
While ICD-10 implementation went smoother than expected for most healthcare organizations, coding inaccuracies are still a significant challenge for many providers.
The American Health Information Management Association (AHIMA) identified the top coding challenges, including incorrectly applying the seventh characters for trauma and fracture codes, improperly using procedure codes that drive a diagnostic related group, misidentifying respiratory failure, mistaking the use of guidance tools, and insufficiently documenting devices, components, and grafting materials.
Incorrectly or mistakenly coding a medical service will likely lead to an uptick in claims denials, so healthcare organizations should regularly train clinical staff on ICD-10 coding updates and encourage front-end staff to communicate with clinicians if there are documentation issues.