“Stop the Bleeding!” – Ways to prevent unnecessary loss of income during these hard times

For most Americans, whether or not the government has officially declared these times as a recession or a depression, things are a little tougher than they were 10 years ago. This includes doctors. Many patients think that all doctors are living good and aren’t hurting like “the rest of us” but that isn’t true. Doctors are feeling the pinch now too. After all there are a lot of expenses in running a medical office, especially with all of the changes going on with EMR and ICD 10.

They have the normal expenses of office space rent, taxes, receptionist(s), nurse(s), physician help (NP’s or PA’s), insurance, office supplies, utilities, computers, software, and the list goes on. In addition to that many are faced with needing to buy new software to be compliant with the EMR laws and training expenses to prepare their staff for the switch to ICD 10. Most patients really don’t have any idea how much a doctor has to pay just to keep their office open.

Now more than ever medical providers need to “stop the bleeding” by plugging the holes in their office that are causing them to lose money. One of those holes for many providers are denials. I read a statistic a while back that said that 47% of denied claims are never appealed. To me, that number is staggering. Sure there are claims that are denied correctly, the services may not be covered, or the patient may have met a maximum and the patient is responsible for the charges. But I don’t believe it
can be that many. And unfortunately, I’ve been in enough medical offices to know that many have office staff that are just not dealing with the denials.

I have found there are a couple of different reasons why denials in an office can go neglected. One of them is due to lack of time. Many offices are chaotic. They not only have the regular patient load, which in and of itself is enough to keep them running all day, but they have the add on patients who just have to be seen immediately. In addition, they’ve got the phones ringing, someone has called in sick so they are short handed, and they’ve got pharmaceutical reps coming in. You get the picture. They barely have time to get the billing out, possibly record the payments that have come in, but handling denials? Maybe they will get to those tomorrow. Unfortunately tomorrow never (or at least not usually) comes.

The staff isn’t purposely ignoring the denials. They truly think they will get to them. The problem is that many insurance carriers have time limits on when a claim can be appealed. Most allow 60 or 90 days from the date the claim was processed to file an appeal. Also, if the denial means that a different insurance needs to be billed the timely filing limits on that carrier may be reached if the denial isn’t handled quickly. If the denial means that the patient needs to be billed, the odds of getting
payment are greater the closer it is to the date the services were provided. The doctor usually isn’t even aware there is a problem. Many times, neither the doctor nor the staff have any idea how much money the office is losing due to these denials not being handled.

Another reason that denials go unresolved is if the staff in the doctors office doesn’t know how to handle them. It’s not always that they don’t have a good comprehension of medical billing, but they don’t always know what needs to be done in the case of certain denials. It may be a denial they are unfamiliar with or haven’t run across before. Or it may be an insurance carrier that they haven’t dealt with much. If they don’t know how to handle it then it may go unresolved.

In some cases, doctors hire people to do their billing that don’t have a good comprehension of medical billing. In this case not only do the denials go untouched, but there are a larger number of denials than there are in an office with an experienced biller. It is unfortunate, but some providers don’t understand the importance of the billing.

No matter the reason that the denials are not being handled, the important thing is that the doctor do something to change it. There are a couple of things that can be done. First, see if there is anything that can be done on the initial billing to prevent any of the denials that are being received. If a doctor is receiving a lot of denials for terminated insurance plans then the staff needs to do a better job of verifying the insurance with the patient at the time of their visit. Maybe they are not asking
the patient when they come in if there are any changes in their insurance information. Many patients forget to inform their doctor when they change policies. Having the receptionist ask will cut down on these denials.

Another thing that can be done is to develop a system for handling each denial. Having a system will eliminate the need for the staff to determine what needs to be done each time a denial is received. For example, if the doctor receives a denial for timely filing the staff should know exactly what to do. First, check to see if the claim was originally submitted in a timely manner. If it was, a claim should be reprinted along with proof of the original submission. If the claim was submitted electronically
that proof may be an electronic report verifying the first submission. If it was a paper claim, it may be a patient ledger printed out from the practice management system.

In addition to the claim and the proof, an appeal form should be attached. It’s best to design a generic one for the insurance carriers that don’t have their own adjustment forms. This will cut down on time since the staff can just simply grab the generic form and attach it to the claim and the proof instead of writing up new one each time one is needed. For the carriers that have required adjustment forms, they should be kept handy for quick and easy access.

Having a system in place for each denial will greatly reduce the amount of time needed to file the adjustment request or submit an appeal. It will also make the process easier for the staff so it won’t be such a dreaded task. Reducing the number of denials received and having a system for handling those denials will help the staff be able to deal with them in a more timely fashion.

In this economy a doctor must do all they can to ensure that they collect all of their receivables. Their growing expenses coupled with the declining reimbursement rates from insurance carriers make it a necessity to reduce the amount of money lost to unpaid or denied claims. Making sure that denials are being handled is one way they can “stop the bleeding”.

Copyright 2011 – Michele Redmond


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s