Don’t Wait Until You Are Sick To Get Well

I recently came across an article with this title and it really hit me. Of course it hit me in a way totally different than what the article intended. Being a medical biller thru and thru I immediately began thinking about the billing aspect of a doctor’s office. My first thought was “don’t wait until you’re receivables are so bad that you’re close to having to shut your doors before you seek help!” But it’s so true.

Most doctors don’t pay any attention to their billing until they are in financial trouble. Many go years and years losing thousands of dollars before they realize they are even in trouble. For me, that’s very troubling. I’m a bit of a perfectionist and also a numbers person. It’s hard for me to comprehend how someone can run a business but not pay any attention to the numbers. But doctors aren’t taught business end in medical school. Unless it comes naturally to them, or they hire someone that is handling that part for them (and handling it appropriately!) they are likely to lose money.

Time and time again we go into an office where they have someone in charge of their billing and they really don’t know much about it other than if there is anything left for them to draw after paying all the bills. They don’t know how many patients are being seen on a daily, weekly, or monthly. They are unaware of what percentage of their receivables are out over 30 days and what percentage is lost or written off. Most don’t know what criteria are even used to determine if charges need to be written off or are lost.

Unfortunately this type of doctor is the type that is likely to be taken advantage of. It is not always done intentionally. Sometimes the billing person is truly trying to do their best but they either don’t have the time to get to everything or they don’t have the training needed to do it. For example, many billers are thrown into the position without proper training. They may inherit the position because the previous biller left unexpectedly or the other biller may just not be able to get everything done so they pull another office worker in to help them. They may not be intentionally trying to cause the doctor to lose money but ultimately the job they are doing is doing just that.

And of course there are the billing or office managers out there that prey on doctors who do not pay attention. We read about them in the paper all the time. It’s really a shame, but it’s an unfortunate reality in this field. Some are doing it for their own personal gain, while others just do it because they have a poor attitude and just don’t care. Either way, they still get their pay check but the doctor ends up short.

We were aware of an office that was having serious problems with their receivables. They suspected that they were only receiving about half of what they should be. It literally took us years to finally get in to just take a look for them. It turned out they were losing over $250000 a year! Yup, a quarter of a million, every year. We figure it had been going on for over a 10 year period. Just in the couple years they had put us off they lost over $1 million. OK, so are you ready for the craziest part? You better be sitting down! We began doing their billing and we immediately doubled their income. After 2 years, they fired us because they had a “friend” starting her own medical billing business. The office manager that had been losing them $250000 a year still works there.

The dynamics of some offices leave me scratching my head. The whole time we worked for them we tried to get the office manager on board with us. We told her “we are bringing up the receivables and that makes you look good.” Her response was “I don’t care it’s his money, not mine.” Amazing how some people’s attitudes are. Here is a guy paying her a very good salary to run his office and she doesn’t care about the money coming in??? But what is he thinking? He let us go and kept her. And just for the record his income immediately dropped after we left by 40%. I know this because he told me.

So anyway, back to the point of the article. Why do so many doctors wait until they are in trouble before they seek help? Maybe they could relate if we use a medical analogy. Would they recommend a patient with diabetes wait until they are in a diabetic coma before seeking medical attention? Or would they recommend that the patient check their blood sugar at the first sign they aren’t feeling well? Maybe that’s not a good analogy. After all, I’m not a doctor. But I am a biller and I can say without a doubt that all providers should take some time to determine if their billing is going ok, if their receivables are in good shape, and if they need to make any changes. They should ask themselves the following questions:

• How many patients does the office see daily, weekly and monthly?
• How much money is out over 30 days? (What percentage?)
• Does my staff run regular aging reports and work them?
• Will my staff willingly give me reports so that I can see what’s happening?
• Does the patient billing go out regularly?
• How are denials handled? (How quickly, what methods)
• What percentage are we losing, or writing off as bad debt?

That is a good place to start. If the answers to the above questions are causing you any alarm, you may want to consider consulting with someone to review your office billing procedures to see if there are any serious issues, or if there are some things you can do to improve the situation. If you are a billing service you can use the above questions to ask a provider to get them to give you a chance to come in and do an analysis for them.

Getting Patients to Pay Their Bills

Making sure that the patients statements that you are sending out are clear and easy to understand can save you a lot of time and makes it much more likely patients will pay their bills. When you prepare patient statements you should take a look at them before they are mailed. Is it clear how much the patient owes, what they are being billed for and why? If not then you can expect a phone call. Phone calls from patients can be very disruptive during your daily work flow. Even if billing is your only job, stopping what you are doing to take a phone call from a patient to explain their bill can really wreak havoc on your daily work flow. Multiply that by 10 patients or even more and you might not get anything else done.

By making sure the patients’ statements are clear you can eliminate most of the phone calls from patients. There will always be a patient or two that will still have to call. They may have insurance information to give you or they may have made a payment that they don’t feel was recorded. But clear patient statements will eliminate phone calls from patients with basic questions and make it much more likely that they will pay. When a patient has a question about a bill it is easy to put off calling or paying.

For example, if a patient’s services were applied to their deductible, it should be clearly indicated on the bill. If it is indicated the patient will understand why they are being billed and assuming that they do have a deductible, will not have to call you for an explanation. Another example could be if the patient’s plan doesn’t cover a certain service. Say the patient purchased eye glasses but their policy doesn’t allow benefits for eye glasses. If the bill indicates “your plan does not allow benefits for eye glasses. These charges are your responsibility.” Then the patient will understand (hopefully! LOL) why they are being billed.

If they disagree then they can contact their insurance carrier. But as we all know they will probably call you first! In any case, the point is, having good, clear patient statements will drastically cut back (but not completely eliminate) phone calls from patients and increase the percentage of patients who pay their bills. A good test is to look at the statement and ask yourself, “if my mother got this statement in the mail would she be able to read and understand it?”

Michele’s Thoughts for the Day

Michele’s Thoughts

Well, it has been a really busy summer so far. My thoughts are all over the place! I am a serious multi-tasker (almost to a fault) so having one thing on my mind is not possible. But right now the main thing that keeps coming around is that in this economy there are still so many providers who are losing money unnecessarily. Of course I just finished writing the article “Don’t wait Until You’re Sick To Get Well” which addresses this subject but that’s not the only reason I keep thinking about it.

You see as a billing service, billing is my main focus. But most providers, treating patients is their main focus, as it should be. But, in order to continue treating patients and treating them well, the billing must be handled well too. If the provider isn’t getting paid, they won’t be able to keep seeing patients.

In this economy it seems more important than ever that offices tighten up their receivables. When I first started my business, in 1994, it seemed that offices just accepted that they lost some money. There are always those services that are just uncollectable and must be written off. But many offices lose money that doesn’t have to be lost. I guess with the economy better it was ok to lose a little. But now, with insurance carriers getting stricter and cutting back, reimbursements are lower, copays are higher, and things have changed. Doctors can’t afford to forget about those copays anymore (not to mention they shouldn’t have back then either!).

When a copay is $50 instead of $5 it makes a big difference. Also, with copays so high, patients are a little more hesitant about rushing to see the doctor. They may choose to wait it out and see if it gets better before they run in to be seen. In any case, things are different. Times have changed. And so should providers’ attitudes about their billing.

They should take their billing more seriously and make sure they aren’t losing money that could be collected. They should take a look at their numbers and know what’s going on. Billers should be more diligent in doing their jobs and collecting all that is due. I don’t know why, but it drives me crazy to think of all the money that is lost unnecessarily, and it’s not even mine!