Critical technology for a medical practice: how to stop money from falling through the cracks

Physician Executive, March-April, 2004 by Patti Rosenberg

Add on, outsource or own?

Since practice management technology has only recently responded to practices' needs for better reimbursement management, perhaps the first step of those responsible for this important piece of management is to forgive themselves.

Many directors of billing and collections performed near miracles in collecting the money owed using systems that just don't fit the problem. But as the technology evolves, practices need to turn their attention to a solution. There are several options, each with advantages and disadvantages.

Option 1: Add features to current system

Perhaps you are on a system that already provides line item posting, supports electronic billing and remittance, and accommodates your security and other needs, but does not have the capability to store and utilize multiple reimbursement schedules.

In this case, sending claims out to a vendor to be assigned an expected payment amount is an option. Some vendors will take claims files and build expected reimbursement tables outside of the current system. When the payments come in they hit against that newly created payment table and flag discrepancies for the staff to pursue.

Advantage:

The upside of this add-on vendor is that it saves the practice the expense of replacing the current system. Another upside to using an experienced firm is that they work with the carriers all the time and know how to identify and pursue claims errors. So they bring a level of expertise and experience and focus that most medical practices cannot acquire on their own.

Disadvantage:

The downside of this type of arrangement is that it involves additional steps in processing. Claims are sent nightly or with each billing run, so the IT staff must establish procedures to ensure that the nightly process works seamlessly and that all claims are accounted for all along the way. This process is not at all internal to one's system and so there is an extra process that offers a new opportunity for mismanagement. Additionally, there is the expense and extra work of managing a vendor.

Option 2: Outsource

Another option is to completely outsource the function. A good time to do this is when a practice management system is already on the down side of its life cycle and needs to be replaced anyway.

Another is to just outsource the billing function to a company that provides IT and billing services in one seamless package. These companies will install terminals in the practice, integrate their billing, collections, and expected reimbursement management seamlessly within the practice, and guarantee performance at a fixed cost or percentage of net collections.

Advantage:

One major advantage is that the practice is not vulnerable to losing a key employee and losing a huge capability such as maintaining expected reimbursement tables or other system configuration. With tables in disarray, the practice won't have a reliable matching process.

Outsourcing partners bring expertise and depth of staff, which allows them to guarantee that the system and revenue process will always run smoothly. Unlike running one's own system and process, the practice's costs and performance are extremely reliable and there are no backlogs that require staff overtime or additional temporaries to resolve.