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Each state has passed a Clean Claim Law. The level of benefit these laws provide to medical practices and facilities starts on the low end with states such as South Dakota that provide little more than a slap on the insurance company’s wrist to states such as Texas which levy substantial financial penalties on tardy payers.

The basic idea of the law is that a payer has to respond to a clean claim within a set time (usually around 30 days for electronic claims). In order to utilize the clean claim law effectively you must have a tracking system built into your medical billing process that flags:

1. To which insurance companies does your state’s clean claim law apply (some payers are exempt);

2. The date your practice initially submits each medical claim;

3. Events that stop the clean claim clock (e.g., an information request from the payer),

4. When your practice has taken actions in response to payer requests;

5. The date when you received the payer’s final adjudication decision.

The idea of systematically tracking all of this information may be daunting, but with a smart system design it is possible and most definitely a worthwhile undertaking. After submitting a few Clean Claim law violation reports you will see your claims pay faster. I have seen situations where payers have actually called just to assure the practice that claims will be quickly processed.

If you would like to better understand the benefits of implementing a Clean Claim Law tracking system before investing the time and energy into the design and implementation of the system, then run a pilot. Identify a payer that is consistently in violation of the Clean Claim Law. Select 30 to 50 claims from this payer and manually track all of the items outlined above. Once you have some violations, file a report following your state’s guidelines. This process will allow you to better understand what will be required to make such a system a permanent part of your medical billing and see the potential benefit to your practice.

Copyright 2006 by Carl Mays II

No matter what technology you deploy or the strength of your process, superior medical billing ultimately relies upon a strong billing staff. There are four key elements to creating a world-class billing team:

1) Deploy a systematic approach to and dedicated resources for obtaining and developing strong employees:

The leading billing organizations recruit the best staff. A dedicated, specialized HR team evaluates applicants-applicants must pass a proprietary billing testing process assessing both skill and will. This process shouldn’t be different from the recruiting process of a Fortune 500 organization.

In addition to finding great people, you must continuously develop them. Less experienced medical billers should be continually trained so they can take over more difficult assignments. All staff must be trained in the latest changes to rules and regulations relevant for billing.

Part of building a great team is removing the weakest performers and replacing them with strong performers. Such action raises the bar for everyone and leads to a stronger team. Each year disciplined and measurable reviews must be given and the weakest performers replaced.

2) Make your team specialists: Just as some lawyers focus more on trials and others on contracts your medical billing team should be specialized. You should have members that are focused on demographics, charges, payments and others that focus on insurance follow-up and patient collections. Build upon the strengths and natural tendencies of your team members; do not expect them to be masters of all elements of medical billing.

3) Provide the staff with solid analytics support: Besides providing the clients with continuous practice analytics focused on clients’ practice improvements (coding, contracting, profitability, marketing, etc) , the leading billing organizations’ Analytics Group should offer strong analytics support to the billing staff. The Analytics Group should trend and measure payers response times, rejection trends, payment rates, and other key performance indicators in order to properly focus the billing staff’s efforts. They should also measure various elements of the internal billing process for continuous improvements.

4) Motivate your billing team: Utilize an OIG approved compensation system for the billing team. Aligning their interest with those of the practice is a huge source of billing improvement.

Utilizing these concepts will allow you to assemble and grow a medical billing team that will be capable of utilizing a great medical billing process to deliver powerful results.

Copyright 2008 by Carl Mays II

You have invested in cutting edge medical billing technology. You brought in a high priced expert to make sure the system was implemented correctly. This should start the money flowing in, unless you have a group of mediocre medical billers. You need a world class medical billing team. Putting such a team in place requires four components:

1) Installing a well-defined and predictable method for recruiting, identifying, hiring and keeping great medical billers:

The leading billing organizations recruit the best staff. A dedicated, specialized HR team evaluates applicants-applicants must pass a proprietary billing testing process assessing both skill and will. This process shouldn’t be different from the recruiting process of a Fortune 500 organization.

The leading billing organizations train to develop desired quality. Junior staff members must pass demanding training programs-junior team members are developed into billers, capable of following the measured and monitored billing process. In addition, staff is trained throughout the year in latest payer rules, follow-up techniques and compliance guidelines. A dedicated Compliance Officer is responsible for all additional HIPAA and OIG training.

Part of building a great team is removing the weakest performers and replacing them with strong performers. Such action raises the bar for everyone and leads to a stronger team. Each year disciplined and measurable reviews must be given and the weakest performers replaced.

2) Focus your team members: The best medical billing processes are designed to allow individuals to specialize in specific areas such as charge posting, insurance follow-up or payment posting. Such specialization allows the individuals to become true experts capable of spotting issues quickly that billers spending their time performing multiple tasks might miss.

3) Invest heavily in analytical efforts: Continuous improvement of the billing process and the billing team requires significant and on-going analytical efforts. By measuring key factors about both payers and the billing process, a billing group can speed up collections, lower denials and lower the cost of the billing process.

4) Motivate your billing team: Utilize an OIG approved compensation system for the billing team. Aligning their interest with those of the practice is a huge source of billing improvement.

Utilizing these concepts will allow you to assemble and grow a medical billing team that will be capable of utilizing a great medical billing process to deliver powerful results.

Copyright 2008 by Carl Mays II

An underappreciated source of today’s high medical care costs is the medical claim adjudication process that is employed by commercial payers. The current process is intentionally fraught with unnecessary hurdles and pitfalls that save the payers money by lowering the amount they reimburse physicians and facilities. Well designed medical billing processes from medical billing companies and medical offices can eliminate the profitability of the current adjudication process and streamline the entire insurance reimbursement process.

Everyone hears about the fact that much of the cost of healthcare is driven by the expense of processing and adjudicating claims. What is often not mentioned is what is truly at the root of these expenses – payers that are attempting to withhold from physicians the money they are due.

Payers employ a series of complicated (and frequently changing) adjudication rules which medical providers and medical billing services must navigate to obtain payment for services rendered. Even when the maze is navigated successfully, payers will frequently (ten percent to twenty percent of the time) underpay claims. To add insult to injury, payers will also frequently simply “lose” claims that have been submitted. Unless the medical billing process is designed to catch these errors the payers never pay the money that is saved though the underpayment and misplacement of claims.

There is a strong economic motivation for payers to maintain the current inefficient billing process. They can increase their profits sharply since more than fifty percent of the claims they misplace or accidently underpay are never noticed by medical providers.

Nothing is free, so payers do incur a price on their end because of the current process. It cost about $25 when a payer that has spotted an underpaid or missing claim gets a insurance representative on the phone. This has lead payers to get quite clever and grade each medical provider. The grade is based upon how well the provider spots issues and calls the payer (thus generating costs for the payers). If the provider catches the payers “mistake” each time they will be rated an A. If they never catch the payer’s errors they will receive a F. Interestingly, the payers that are rated an F seem to have many more lost and underpaid claims than those rated an A.

So, how do all of these facts tie lead to the conclusion that better medical billing processes can lowering the cost of healthcare? If each and every underpaid or lost claim is pursued (which is what a well-designed medical billing process should do) then eventually payers will lose all economic incentive to play games and make the medical billing process complicated and expensive.

Imagine if every physician’s internal billing department or medical billing company pursued every claim until it was paid in full. The payers would see their cost to adjudicate the claims rise and they would see their payments to providers rise because the lost/under paid claim games would no longer prevent providers from ultimately being paid. This combination would lead to each physician ultimately being paid quickly and without fuss because the insurance companies would lose significant money by playing games ($25 per extra phone call generated by the games) and they would gain nothing since payments would only be delayed, not avoided.

Real-time claim adjudication, where a payer adjudicates the claim while the patient is in the physician’s office, is a goal that has been frequently described as being “just around the corner.” This goal will never be reached while the balance of power between payers and providers is so skewed in the favor of the payers. Once each provider is rated an “A” and the payers are no longer able to use their superior size and technology to under pay providers, a truce can be achieved. It is from this truce that a true real-time, low cost medical billing system can emerge.

Copyright 2008 by Carl Mays II

A well designed and executed Revenue Cycle Denial Management system can improve a medical practice or facility’s collections by up to 20 percent. If your medical billing team or medical billing company does not have a proper denial management system in place then you are, without question, losing money.

Some medical billers believe denial management is the same as follow-up, others believe denial management is primarily geared towards dealing with issues around medical necessity. Many medical billing experts simply think as denial management as a description for the overall medical billing process.

A good start to finding out if your practice is suffering from improper denial management is to find out from your medical billing service (or in-house medical billing manager) how they manage denials and how they measure success in this area.

Few billing departments appreciate the value a good Revenue Cycle Denial Management system can bring to a medical practice or facility. A robust Revenue Cycle Denial Management system provides methodical management data for the billing process; the data are then used to (a) increase and (b) accelerate cash flow.

Fixing core denial problems and increasing collections requires keeping track of, understanding the magnitude of, and reporting on every claim that is denied by a payer. Tracking all denial across all payers is critical. The proper denial management system provides the data required to stop the root cause of problems and significantly increase the rate of first claim submission acceptance. If your practice is not measuring this level of detail then money, significant money, is being lost in the flood of denied claims pouring into your practice.

Three elements are typically missing from a practice or medical billing company’s denial management process: data, filtering/sorting methodologies and feedback to systematically correct errors. Most practice management systems do not properly track denials – at least not in the form in which they are typically used (i.e., they may have the capability, but only if properly implemented and used). Those PMs that do track denials typically overwhelm the practice with data that is difficult to utilize for high level denial management. Finally, even if the data is captured and can be properly utilized, most billing groups do not have a systematic way to get the information back into the billing process in a manner that prevents the denials from occurring again in the future.

The standard denial management output should track by payer, the number of claims denied and the reason for the denials. This must be coupled with a dashboard reporting tool for quick visual management. With these reports the billing team can easily identify which payers are inappropriately denying claims; they can also compare these payers to their peers for proper trending and follow-up. This output allows the medical billing team to develop and refine payer specific rules to prevent future payer denials by insuring all claims are clean when they are submitted.

With the analytical capabilities available, the medical billing department or medical billing company can identify systemic medical billing problems, create and test solutions to the problems and implement process changes that will increase collections AND drive down medical billing costs. One example of this is pursuit of Clean Claim Law violators with the denial data produced from the denial management system.

If you implement a powerful denial management system you can optimize your medical billing and speed up your cash flow. As previously mentioned, a strong denial management system can increase your collections by 20 percent or more.

Copyright 2008 by Carl Mays II

Submitting clean claims is critical to a strong medical billing process. A fundamental element of good process design is to catch problems as soon in the process as you can. Correcting a diagnosis error before a claim is submitted may take 5 minutes; correcting it after the claim has been denied will take well over an hour (and it will delay collections by 3o or more days).

Clean claim submission can reduce average days in AR to less than 45 days

If claims are indeed submitted clean, then over 90% can be paid after the first submission. This leaves a much smaller number of “real” issues for the medical billing staff to pursue. By eliminating avoidable errors, collections accelerate and increase (since in many billing offices there is no time to perform basic tasks like no response calls). A key tool in realizing these improvements is a claim scrubber. These scrubbers, which are used by all leading medical billing services, compare claims to the rules utilized by payers to decide if a claim will be paid. These scrubbers include:

- A baseline scrubber. This scrubber insures that the claim has at least the basic information such as a social security number, properly formatted insurance id number, etc.

- Core coding scrubber that compares the claim’s coding to local Medicare and Correct Coding Initiative rules. Such a scrubber should not only identify negative issues (e.g., a diagnosis/procedure mismatch) but also improvement opportunities (e.g., this procedure is typically performed in conjunction with a second, billable procedure, that is missing from this claim).

The scrubbers outlined above are a basic service that any medical billing company should offer. Medical billing companies should also be able to utilize medical billing specific know-how and business intelligence created over time through work with many clients across specialties and geographies to create their own proprietary set of claim scrubbing rules. This third type of scrubber is a:

- Dynamic Proprietary Rule scrubber that checks for optimal coding and documentation versus each particular payer or plan’s rules. This scrub assures that each claim is optimized for clean submission. When the payer or plan’s rules change or when the billing office detects a systemic issue they should update the scrubber to filter and fix problems before claims are submitted. These specialized scrubbers differentiate the Tier one medical billing companies from the rest of the crowd and can make a significant collections difference.

Utilizing all of the scrubbers outlined in this article will dramatically lower days in AR and allow the billing staff to properly purse any issues that remain. In today’s medical billing environment, use of these scrubbers is truly mandatory.

Copyright 2008 Carl Mays II