30th November 2022
Common medical billing and collection problems consultants’ practices share.
Key person dependency
For most practices there is one person who is responsible for everything relating to administration. This is typically the practice manager or secretary/PA. As the practice expands, so does the risk of all the work being channelled through one resource. When the workload gets too much, the first thing to suffer is often the financial running of the practice, as the patients’ demands, rightly, always come first.
Issues arising from the decline in the competence and expertise around the billing process is a recurring problem. If the medical secretary, who in many cases has been with the practice for years, either retires or leaves, all the knowledge around billing and collection seems to disappear with them.
Many private consultants do not know their fee structure or specific billing arrangements for the range of patient types they treat. This is not surprising when you appreciate how busy most consultants are, quite often running both an NHS and private practice.
Fees for consultations and procedures often vary between each private medical insurer and making sure the correct fee is used when billing is important.
Some insurance companies allow for an extended consultation to be billed at a different rate in specific circumstances and one major insurer recently updated its consultation fees across one specialty by as much as 40%. If a practice is not on top of changes like this, then they could be losing money every time they see a patient.
It is also important to make sure that your practice keeps up to date with the latest Clinical Coding and Schedule Development (CCSD) changes for your specialty and how the respective insurers have chosen to deal with these. These are updated monthly and changes can include:
- Rules on which codes can be billed together and those which cannot – known as ‘unbundling’;
- The narrative against a specific code;
- Replacement codes;
- Discontinued codes;
- New codes.
Most insurers publish a price list detailing what they will pay for each CCSD code. These prices can vary by as much as 100% and you should always check you are billing to the appropriate tariff. If you are not, then you could be losing money.
Over the years, I have met with a few practices where they have only ever billed their procedures using the Bupa price list. In some instances, this was the only information they had. Some practices did not know that each insurer had its own schedule and even when they did, they did not realise by how much this could impact their income.
One example of this was a consultant who assumed that because one major insurance company did not allow charging for a local anaesthetic with the most common procedure codes, then this was the same with all insurers. As a result, the practice had not invoiced for local anaesthetic procedures over many years – creating a loss of tens of thousands of pounds.
I have come across many consultants who have had issues in relation to incorrect billing with the various insurers. For some, this meant payments they have received being recouped, fewer patient referrals and, in some extreme cases, derecognition by the insurer.
Delays in invoicing
It is extremely important to make sure your work is invoiced in a timely manner. This ensures that you have consistent cash flow and will assist with your debt reduction. The additional benefit is that any billing issues picked up quickly can be swiftly resolved. Remember, the invoicing process reflects on the professionalism of your practice.
Raising an invoice is the first step in the billing process, so adherence to this simple rule results in benefits across the whole invoicing and chasing process. I meet with many practices where this simple rule is not being followed and this can be for a range of reasons:
- The consultant has been doing the billing but no longer has the time due to an increase in practice size and workload;
- The practice has fallen behind on its billing and is daunted by the size of the problem;
- The insurers’ requirement to raise electronic billing.
The adoption by a couple of the major insurance companies of time limits, such as the three and six month rule for when an invoice needs to be presented, has highlighted the need to invoice quickly.
With overseas self-pay patients, it is often preferable to collect payment before treatment or at the very least to have chased for the money before the patient returns home and collecting payment proves a problem. Depending upon the specialty, there can also be a requirement to raise and collect payment up front for UK-based self-pay patients.
The major insurance companies demand that the practice send invoices electronically – referred to as electronic data interchange (EDI). Bupa and Vitality have mandated that they only accept invoices electronically.
There are many benefits of electronic billing, including proof of receipt as well as faster processing and payments, but, unfortunately in practice, this billing method is not always as easy as you would expect.
EDI errors can mean that invoices fail to be sent and so they need to be monitored and resolved. These errors occur for a variety of reasons, including incorrect policy numbers, wrong Clinical Coding and Schedule Development Group (CCSD) codes and other missing data.
Reconciliation of payments
All successful businesses require an accurate picture of all monies that are currently outstanding. This is even more important with a medical practice, as the allocation of payments from an insurance company can often result in the requirement to raise a separate invoice directly to the patient when the initial amount is not settled in full. Underpayments can occur when there is either a shortfall or an excess resulting from the terms of the patient’s policy.
Problems arise when invoices are not reconciled in a timely manner, which means that funds remain outstanding and can negatively impact the cash flow for the practice. Any delay in raising invoices to the patient means not only does the practice look unprofessional, but the patient may choose not to pay.
We define ‘backlog’ as any outstanding invoices previously raised by the practice. The average ‘backlog’ Civica Medical Billing and Collection has taken on during its ‘intensive care process’ this year is 19.6%.
Facing up to the extent of the problem and implementing an effective reconciliation process is key to maximising the cash flow and minimising the aged debt of your practice.
Chasing outstanding debt
To be effective, your process for raising invoices and reconciling payments needs to be supported by a robust chase procedure that is routinely adhered to. Quite often in a busy practice, this task is only tackled occasionally, as the day-to-day demands from patients and the consultant take priority.
Many secretaries find it time consuming to chase payment for outstanding invoices and therefore struggle to do it on a consistent basis.
Decisions around infrastructure should support and protect the practice rather than create areas where it is vulnerable. There are regulatory issues to be aware of such as:
- The implementation of the General Data Protection Regulation (GDPR) Act in Jan 2018, which implemented an EU regulation;
- Payment Card Industry (PCI) data security standard compliance rules for practices that take card payments.
I have come across many psychiatrists whose secretaries, due to the repeat nature of consultations within their specialty, have stored card information in a method that was not compliant and have experienced problems with data protection and the potential for large fines.