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How to Increase Productivity and Efficiency with Medical Billing BPO

Author: Gretel Digo

Posted: May 24, 2017

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The medical billing process is a series of interactions between the medical provider and insurance company, with the aim of collecting payments for services rendered to each patient.  The billing or revenue cycle can take several days to months to complete before a resolution is reached.  Many healthcare organizations work with a medical billing partner to shorten the billing cycle, collect payments quickly, and increase the amount of collections.  The right medical billing BPO provider also increases the productivity of the practice, its physicians, and internal staff.

A reputable medical billing BPO partner is always looking for ways to increase productivity and profitability.  It regularly looks at performance standards of internal and outsourced staff and performs a comparison of best practices.  It makes helpful recommendations to improve billing, payment, and record-keeping processes.  Aside from that, it provides coaching and mentoring to personnel if problems arise after giving feedback, and it is available to answer questions from employees.

Service providers should incorporate practice-specific coding requirements and insurance policy changes into processes and do it in a way that increases productivity.  A good medical billing company understands the unique billing requirements of different specialties, providing solutions customized to a client’s needs.

Productivity Metrics

There is a strong correlation between using data-driven metrics and financial success, according to a productivity report from the Medical Group Management Association (MGMA).  However, practice owners, hospital administrators, and CFOs are busy people, and often don’t have the time to track every factor that affects business productivity.  By outsourcing RCM or medical billing, the service provider can collect the data necessary to create a detailed picture of practice productivity.

Productivity metrics for medical billing and revenue cycle management vary with the type of practice.  While it is important to consider the number of physicians and medical professionals, collections or claims per visit, total annual collections, and the duties and responsibilities of each medical billing staff should also be taken into account.  Service providers benchmark outcome measurements against best practices to evaluate the productivity of internal and outsourced billing teams.

Standards should drive high productivity, but they must be reasonable: not impossible or too easy to achieve.  Comparing these metrics with benchmarks and measuring productivity against outcomes help the provider determine whether billing staff productivity is below or above standards.

Practice Productivity

To measure overall practice productivity, the billing company may use work relative value units (WRVU) and compare the business with other similar practices.  The MGMA has rates for every specialty to facilitate comparison between benchmarks.  For example, a CPT code that indicates a level 3 office visit has a WRVU of 0.97.  Yearly WRVUs may be higher for some healthcare providers than others.  After calculating each provider’s WRVU, the billing company can compare the client’s data with data from similar practices.

Collection effectiveness can be benchmarked using gross and net collection rate.  Gross collection refers to initial charges before adjustments.  Net collection shows the percentage of collectible funds that are actually collected by internal or outsourced billing staff.  Service providers may set a net collection percentage rate of over 95 percent to indicate financial health.  The billing company can also identify areas where the practice loses money, and then implement processes to improve productivity in these areas.

Correcting Claims Denials Issues

Claim denials (can be as high as 50 percent in some practices) and unpaid bills that run over 120 days dramatically reduce profitability.  The billing provider can correct these issues as soon as possible through various means.  This includes scrubbing claims before submission, assigning an experienced team to difficult claims, and increasing low-value collections.

The billing provider also uses benchmarks to compare work function for each employee against standards.  Different benchmarks are used for a biller that only posts charges and payments and a biller that performs claims processing as well as follow-up work and appeals/resubmission.  The provider ensures that each billing professional works toward metrics that actually help achieve practice goals: to collect every dollar owed to the practice.  For a midsize practice with eight specialists, a sample benchmark is $1.3 million in collections per biller per year.

Coding Productivity

Every time a patient visits for an appointment and receives medical care, the service is documented in paper or the electronic medical record (EMR).  Medical billers and coders review the EMR or patient chart, assign the right code for each service, and ensure that claim forms are accurate and complete before submitting to the insurance company.  The medical biller or coder consults ICD-9/10, CPT and HCPCs references to determine which code should be assigned to a certain procedure, office visit or hospital stay.

Billing providers often measure coding productivity using speed and accuracy metrics for each medical coder.  The American Health Information Management Association (AHIMA) recommends separate productivity standards for four (4) different types of coding: inpatient, ER, ancillary testing, and outpatient/interventional surgery and procedure.

The time needed to code accurately and completely depends on the service mix or service offerings.  If majority of the cases are ICU patients or complex surgical/trauma, accurate coding time can overshoot national productivity averages.  If majority of the cases are less complicated, like pediatrics and obstetrics, charts-per-hour can be significantly higher than the average.  For example, a medical biller or coder should be able to complete 3 patient records per hour or 24 records per 8-hour day for inpatient coding.  ER coding is considered less complex, so the coder should be able to complete 120 records per 8-hour day.

ICD-10 implementation

ICD-10 implementation in October 2015 will increase the number of codes, which may reduce productivity by as much as 20 percent during the transition.  Billing companies were one of the first in the healthcare industry to prepare for ICD-10, and they have systems in place to reduce the impact of ICD-10 on productivity.  The provider and client may tweak coding standards as needed to do this.  If only 50 percent of experienced coders can meet productivity targets, for example, this may indicate workflow problems that need to be addressed.

Service providers understand that it is important to strike a balance between coding speed and accuracy.  Speed cannot be the sole driving force behind productivity; billing accuracy is even more important and needs to be monitored.  If errors are found, the service provider can correct them immediately.

How to Increase Productivity and Efficiency with Medical Billing BPO

Physician Productivity

Part of the success of an outsourced revenue cycle management project depends on how well a practice’s internal and outsourced billing staff can perform their duties.  At the same time, RCM success revolves around the services that physicians and healthcare professionals provide their patients.  Physicians are busy people, and they need all the support they can get.  The AAMC (Association of American Medical Colleges) estimates that the United States will have a shortage of about 90,000 physicians in the next five years.

Medical billing providers can boost the productivity of physicians by increasing the time they spend on patient care and reducing the time spent on administrative and billing tasks.  For practices with their own billing departments, medical billing companies can improve physician productivity through consulting services.  The billing provider may recommend offloading non-critical tasks (such as handling lab results, patient charts and faxes) to the outsourced team, or provide cross-training to in-house support personnel so they can fill in for healthcare providers at different times.

EMR and Productivity Software

Some practices are reluctant to switch from paper to electronic medical records (EMR) because they believe that it will take more work, leading to decreased productivity and reduced number of patients that physicians can see.  The use of EMR does require immediate entry of necessary patient data into medical billing software for insurance purposes, but this can be done before the appointment.  Physicians need to enter pertinent information only, without filling out the entire form.  They can also accomplish most of the work during the visit.

Paper chart filing and searching takes up over 20 percent of administrative time at medical practices.  Switching to EMR eliminates this.  It also gives practices greater control over patient data and allows for more accurate record-keeping (no more indecipherable physician handwriting).  Compared to paper claims, electronic claims can save a business from 7 to 14 processing days.

The right medical billing or RCM software provided by third parties has been proven to increase productivity.  It gives practice owners and administrators valuable insights into performance and allows the client and billing company to stay connected.  While the medical office has access to patient records that can help staff collect outstanding balances during appointments, the biller has real-time access to demographics, insurance, and other data needed for claims submission.

With the right software, billers have the information they need whenever they need it, making follow-ups, appeals and resubmissions faster and more efficient.  Also, practice admin and CFOs can easily generate comprehensive reports so they can check performance levels and productivity statistics for all levels of support staff.

Getting Started on Offshore Outsourcing Medical Billing to the Philippines

Learn more about outsourcing in the Philippines and outsourced staff leasing.

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