How Automation Improves Medical Billing in Practice Management Systems

In this article, we will explore some of the challenges associated with medical billing in practice management, as well as the benefits of automating your current practice management system software.

Everyone in healthcare knows receiving payments is hard. They know it’s not just one thing that makes it hard. It’s all the small, routine tasks that are never reported, all the conversations, and all the files moving between systems that are never mentioned in your monthly report, determine your budget, and help to make smarter business decisions.

Industry experts have been saying for the past five years how a surge of automation is leading to the next big change in healthcare. One example we meticulously follow is the day to day operations and financial impact of automation on medical billing and practice management.

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What is a Practice Management System Used for in a Medical Office?

Practice management systems are used to run the business side of a medical office, including scheduling, insurance claims, billing and accounting. Practice management systems typically do not include a patient’s medical records, but they can integrate with EMRs for a more robust view of a patient’s experience.

Practice Management System vs. EMR. There is some overlap between features included in an EMR versus a practice management system. EMRs focus primarily on the clinical side of a medical practice management systems focus primarily on the administrative side. Common features of an EMR include document scanning, charting, medication tracking, and appointment scheduling. Common features of a practice management system include the following:

  • Patient Scheduling and Registration - setting an appointment via an online portal or with the front desk; providing demographic data, updated contact details, and payer information
  • Eligibility Check and Demographic Verification - including pre-authorization, instantly highlights issues with payer compatibility. Resolving these issues prior to a patient visit can reduce your denial rate later
  • Coding and Review - translating medical practice diagnostics, equipment and procedures as billable records while reducing instances of denials due to incorrect or missing information
  • Collection of Co-pay/Balance - the fixed amount received from a patient for a service immediately after the appointment or soon after
  • Claim Management - creating, validating and submitting a claim to a clearinghouse or payer, either electronically as an e-claim or manually as a paper claim
  • Correcting Errors/Denials - systematically addressing the causes of why a claim was rejected or denied before resubmitting it for consideration
  • Payment Posting - posting payments into the respective patient accounts against a particular claim to reconcile them
  • Patient Statement and Communication - sending patient invoices and reminders via their preferred method of contact, either over the phone, through email, or as a printed statement
  • Analytics/Data Analysis - comprehensive financial dashboards can help you and your team analyze the performance of your practice at a single glance

Is it Possible for Any Existing Practice Management Systems to be Integrated with the EHR or EMR?

The short answer is, Yes. Any practice management system can theoretically be integrated with any EHR, so long as they can share data seamlessly. You’ll know if your practice management system and EHR are integrated if a patient’s medical records and insurance information are available in the same place and change one another at the same time.

For more detail, it’s important to distinguish between an integration and an interface. An interface is a feature that connects two or more independent systems, so they can communicate with data in a standard file format that’s stored in multiple locations. As such, there will often be restrictions on what information can be transmitted between the EHR and the practice management system. Data maintained in one location is usually indicative of a full integration. Instead of a patchwork of applications desperately trying to talk, the systems share a common code and database.

Integrating complex systems comes with its own social and technical challenges. Social challenges include regulatory restrictions, political constraints, and navigating operational requires of backend billing staff with front end administrative requirements. Technical challenges include building around legacy, premise systems, and cloud-based applications.

Challenges Associated with Medical Billing in Practice Management

Obstacles in implementing a medical practice management software include a lack of time to set up the infrastructure, lack of expertise, and system privacy/security:

  • Security and privacy of web-based or cloud-based practice management software is a concern when hosted on another company’s server. Since this software is available from anywhere with a web connection, it’s also vulnerable to attacks by cybercriminals. Consider the financial and reputational risks related to use of third parties for core services. If security is a priority, check out ImagineMedFMTM VPN, encryption, and user authentication.
  • Billing and collections, charge capture and coding was rated as one of the top risk areas for healthcare organizations in 2019. While outsourcing medical billing is a common method for offloading organizational tasks, lack of visibility into controls of third-party systems can result in lost revenue and lower claim resolve rates. Furthermore, outsourcing occasionally requires careful supervision to ensure business and patient experience standards are upheld.
  • Value-based care holds a healthcare organization accountable for both the clinical and financial outcomes of a patient’s care. 36% of hospital system executives are exploring medical practice management systems that will allow them to streamline financial and clinical systems. This challenge increases exponentially for multi-specialty practices whose claims are spread out across multiple billing systems.
  • Staff turnover and retaining talent affects provider workloads, patient outcomes and costs when managed using manual billing systems. Some doctors will choose employment with a healthcare system as a way to avoid the clerical responsibilities associated with running their own practice. For practice owners who remain independent, they are faced with the challenge of providing the necessary training and resources their staff needs to manage their day to day.

Benefits of Automated Practice Management System Software

Products like ImagineBillingTM built for high-volume, complex medical billing can be configured to your current practice management software workflow while automating it in the following ways:

  • Real-time validation of demographic information, insurance eligibility checking, and pre-authorization makes quick work of top sources of claim denials.
  • Claim generation, scrubbing and submission automatically looks for issues in your claims before they are sent to your clearinghouse or payer.
  • Electronic Remittance to automatically post insurance payments and reconcile balances much faster than can be done manually.
  • Real-time analytics and business intelligence gives you centralized access to business information and status reports for making smarter business decisions.

10 Ways to Automate Your Denial Management

Does your denial management process resemble a closed door, or a bridge? If you are a billing manager, you are all too aware of how difficult it is to manage denied claims. While looking for ways to increase the number of claims your healthcare organization is processing, it’s important not to lose sight of how many of those claims are being denied by the payer. When you’re processing hundreds, if not thousands of complex medical claims every week, a small percentage of denied claims can have a significant impact of your bottom line. This is where automated denial management comes in. Here are some ways automation can help bridge the gap between claim denials and higher profit for your healthcare organization.

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Importance of a Denial Management Strategy

Healthcare organizations lacking a focused strategy for denial management are more likely to receive declined denials. According to the American Medical Association, between 1.38 percent and 5.07 percent of claims are denied by insurers on the first submission. What’s more, denied claims are 3x more costly to rework than submitting a clean claim the first time. If the average cost to rework a claim is around $25, then the difference in value between a clean claim and a denied claim is around $15-17 dollars per claim depending on your clearinghouse. The challenges only compound with the increase in payers and specialties your practice adds to its revenue cycle.

Automating the Denial Management Workflow

According to a 2016 HIMSS survey, nearly a third of providers are still using manual claims denial processes. Out of the 69% using an automated denial management solution, 44% use a vendor and 18% manage their own system in-house. The best solutions to common medical billing mistakes are those which catch a mistake before they occur. For larger healthcare organizations, the sheer volume of claims requires more than a manual process. Automation fits into a well-tuned denial management strategy at three-phases: pre-denial, post-denial, and advanced reporting:

Pre-denial Management

    Start by putting the necessary processes and technology in place to ensure all anticipated causes of denials are accounted for and segmented into the correct course of action to be resolved.

  • Correct errors like duplicate billing, incorrect CPT modifiers, and inaccurate patient demographic information. Reconcile missing patient information with existing records. An automated tool like ImagineAITM verifies and corrects patient demographic details immediately.
  • Get insurance authorization for healthcare services that require prior approval. Systems like Imagine’s Pre-AuthorizationServices can do this in minutes instead of hours like manual processes.
  • With changes in a patient’s policy and greater payment responsibility falling on the patient, it’s no surprise insurance eligibility is the most common type of denied claim. Tools like ImagineDiscoveryTM are great for identifying coverage opportunities including overlooked alternative payment methods.
Post-denial Management
    Recover hidden revenue and minimize the impact of denials by top causes and sources of denials.

  • Automatically sort by dollar amount from greatest to least and/or date of service to head off filing any late claim denials. NOTE: This can take an entire day to do manually. With an automated system, it can happen before billing managers start their day.
  • Systematically assess the business impact of each kind of denial. Prioritize denials that either represent the greatest opportunity for quick revenue recovery.
  • Implement a system where claims with the same payer and cause of denial are appealed in bulk.
  • Isolate complex bills into a separate bucket to be reviewed by a trained billing manager.
Advanced Reporting
    High-level data analytics can help determine if you do not have enough people working on denials, if your process is broken, or if there’s problems elsewhere.

  • Conduct “root cause analysis” to pinpoint trends in denials. Say for instance claims submitted over the course of a few months were denied because a provider was mistakenly marked as not contracted with a payer.
  • Share insights about the reasons for denials with front-end and middle-stage revenue cycle teams can help reduce the flow of denials and address issues further upstream. For instance, if a significant portion of your denials are prior-authorization denials, review your front-end authorization process.
  • Establish benchmarks, analyze workflow performance, and track staff productivity related to denied claims. Review automatically created clean claim and denial rates with your employees can open silos and discover new opportunities for collaboration.

How Medical Billing Companies Use Data Discovery in Business Intelligence (BI)

In medical billing, we often talk about the importance of reporting and business intelligence for finding opportunities to reduce cost and increase revenue. Whether you’re a medical billing manager or the owner of a billing company, everyone employed by your company benefits when given access to data and reports related to their job performance. With that in mind, I’d like to take a step back and talk about the process that goes into creating those reports, called data discovery.

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What is Data Discovery?

Data discovery is the process of collecting raw data from various sources, consolidating it into a single source, and converting it into useful information in the form of reports and visualizations. The usefulness of information is identified through recurring trends, anomalies, or predictive analytics broken down by factors like region, office, or procedure.

Data discovery can be demanding for medical billing managers when you’re accountable to both your management team and clients. Fortunately, client needs are like management needs in many ways. At a high level, clients want to see a lot of productivity reports and net gross collections, and so do billing companies. They need to know what you’re working on, changes in their revenue, and reassurance that your work is having a positive impact on their ROI.

Why is Data Discovery Important?

Data discovery is the first step into a more data-driven approach for monitoring your company’s and clients’ performance. Instead of reacting to the needs of your manager or client after the fact, a data discovery approach considers the goals and challenges of a company before building out a system for collecting and delivering the most useful information. This approach utilizes the full value of structured data to improve decision-making, optimize operational processes, and fuel new business.

Data discovery helps remove some of the biases and assumptions built into reports people create, helping them focus more on the things that practice owners and medical billing managers can control. Steps in data discovery include:

  • Collecting and preparing data -- This step can take a lot of time because of all the different business applications used by multi-specialty medical practices. Collection and preparation is traditionally a manual process that begins with extracting data every month, structuring it into a common format, and aggregating it into a central database. Today, the best business intelligence software largely automates this process.
  • Visualization -- Using visuals like graphs and dashboards to remove noise from data and highlight what’s useful information; visualizing data helps billing managers identify areas that need improvement, helps business owners understand which procedures to focus their attention, and can predict changes in the resulting revenue.
  • Advanced analysis -- Manipulating data in ways to uncover relationships between two or more data points at any given point in time; tasks include segmentation, correlations, and forecasting future value.

What Are the Best Uses for Data Discovery?

Here’s a look into some of the ways medical billing companies are using the data discovery process in business intelligence solutions to drive profitability, reduce waste, and create competitive advantage for themselves:
  • Improved operational efficiencies -- Billing companies and healthcare organizations need to be as lean as possible. Data discovery can be used to analyze a company’s operations for ways to reduce ongoing costs and maximize existing resources. For example, comparing your payer mix with the number of similar claims being processed by a certain payer as well as the amount of revenue you stand to receive will let you know where to prioritize your resources. Over time, you may notice a trend of similar claims being processed across multiple practices and can use that information to negotiate better payer rates.
  • Improved services and patient procedures -- Data discovery can track individual revenue streams to determine which services and patient procedures drive revenue and which are not. For example, a monthly report of collection trends may show a spike in certain laboratory tests being performed by pathology groups at certain times of the year. This information could be used to attract patients who typically receive the test the same time each year.
  • Transparency with clients and team members -- Medical billing companies should be able to supply practices with comprehensive performance reports at the click of a button. Provide customized reports to every client based on their unique challenges and performance focus.
  • Expertise -- Medical billing managers should be knowledgeable in how to approach troublesome denials. For example, denial rate gives billing companies data between all public and private payers and compares which provide the highest or lowest rate of denials for certain procedures. Once a procedure has been successfully adjudicated, the same process can be applied to the same procedure and payer in the future.

5 Key Issues with Medical Billing in the Revenue Cycle Management (RCM) Process

Let’s face it: medical billing has problems- serious problems. Decision makers and billing managers are facing old challenges, like manual processes, along with new pressure to reduce costs. But there’s good news! Some of the biggest issues are the easiest to address. In this article, we will cover the current realities of the medical revenue cycle management (RCM) process from beginning to end, some key issues affecting medical billing workflows today, and steps you can take to improve your company’s IT systems and financial performance.

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Current Revenue Cycle Management Workflow

What is revenue cycle management? Revenue cycle management (RCM) is a process whereby clinical management systems interact with medical billing systems which in turn exchange information between clearinghouses, patient statement systems, and patient payment vendors in order to complete a financial transaction between patients, providers and payers.

rcm process steps in medical billing workflow

Currently the RCM workflow from beginning to end consists of 8 medical billing cycle steps:

  • Step 1: Eligibility Check and Demographic Verification - ensuring patients have valid insurance coverage prior to scheduling an appointment.
  • Step 2: Collection of Co-pay/Balance - collecting a fixed amount from a patient at time of service, as well as the amount owed from a prior visit that wasn’t covered by a patient’s insurance.
  • Step 3: Claim Creation, Validation and Submission - creating claims either manually or electronically, and submitting them to either the insurance provider, a clearinghouse or other claims vendor.
  • Step 4: Correcting Errors/Denials - determining if a claim simply needs to be corrected and resubmitted or if additional documentation is required. Some insurance providers also have a specific appeal process, deadlines or timely filing limit you must meet to be successfully reconsidered.
  • Step 5: Claim Follow-up - reaching back out to the payer via phone, email, letter or online. When done correctly, following up can substantially reduce days in A/R and ease unnecessary financial burden on patients.
  • Step 6: Statement to Patient - sending the final costs to a patient as a printed or electronic bill including demographic details, the amount owed, date of the procedure, and transaction descriptions.
  • Step 7: Collecting Payment from Patient - mobile and online payment are two methods used today to simplify patient collections. It’s also important to consider the needs of your staff to fulfill basic requirements like automatic posting and reconciliation.
  • Step 8: Analytics/Data Analysis - processing and aggregating data into meaningful insights to improve business operations in the form of increased collections, reduced days in A/R, and stable financial performance.

Key Issues and Steps for Improving Medical Billing in Revenue Cycle Management

  1. Siloed Steps in Your Revenue Cycle Process - Around 69% of organizations use multiple vendors for their RCM process in healthcare. In the confusion of managing multiple vendors, some organizations overlook duplicate features available in their current software.
  2. How to Improve - Spend some time auditing your current RCM services. Look for opportunities to integrate systems so your clinical experience speaks to your billing management software, which in turn speaks to your clearinghouse, patient payment system, and statement vendor. Connecting patient EHR, billing information, clearinghouse, patient payment portal, and statement vendor can help you reclaim lost revenue.

  3. Backed Up Workflow During Admission, and After a Patient’s Visit - time consuming paperwork and manual processes are one of the largest contributors to inefficient claims management.
  4. How to Improve - switch from paper to electronic statements (e-statements) while still giving patients who prefer paper statements the option to receive one. Just make sure that you’re only sending the number of paper statements necessary to receive payment from patients who are most likely to pay.

  5. Denied and Rejected Claims Management - 22% of medical claims are rejected, and 65% are never resubmitted. Common causes include incorrect coding, eligibility failures, and missed deadlines.
  6. How to Improve - a three-pronged approach: Optimize processes for insurance verification and eligibility. Train your staff on crucial conversations regarding patient payment obligations and payment options. Transition to better IT software to reduce unnecessary delays between claim filing and patient billing.

  7. Adapting to Changes in ICD Codes - There are five-times the number of medical diagnosis codes in ICD-10 as there were in ICD-9. Traditionally adapting to changes in ICD codes relied almost entirely on continual training, resulting in staff turnaround and additional overhead. Challenges will increase with value-based requirements for more robust clinical documentation.
  8. How to Improve - automated coding and machine learning software can learn from past diagnoses codes compared to their rate of successful claim submissions, and then auto-populate new claims with the same information ensuring a higher success rate in a fraction of the time.

  9. Revenue Data Loss, and a Lack of Healthcare Analytics - Measuring outcomes is interesting, but not always actionable for improving productivity in your revenue cycle process.
  10. How to Improve - business intelligence in the form of roll-up reporting, real-time data processing, and intelligible dashboards. For example, it’s great to know your percentage of clean claims. But it's even better to know your top sources of denied claims. One metric shows you how well your company has performed in the past. The other metric shows you how you're company could perform better in the future.

3 Reasons You Should Offer Patient Payment Plans

The transition from volume-based to value-based care will have a monumental impact on what it means to be competitive in healthcare. There’s a growing interest in the convenience of digital communication, patient payment plans, and more options for paying healthcare bills online with an increasing financial responsibility falling on patients' shoulders.

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