In times of turbulent market volatility, you meticulously monitor your investment portfolio to ensure that your stocks are performing well and that balances remain consistent with the reports provided by your financial advisor or investment institution. However, when it comes to one of your largest assets, your dynamic dermatology practice, you often take the money that comes in the door without much critique.
Occasionally, you ask your administrator or billing manager about collections and they tell you that the money is coming in and there are not any issues. You then move on to discuss staffing, working a patient into your schedule, or anything else that requires your attention.
The problem with the aforementioned scenario is that you are accepting the vague information provided by your billing team without ensuring that there is accountability linked to their performance.
Many billers reference their collection ratio to the owner of the practice. The collection ratio is a reflection of their performance and calculated by taking your total charges minus your total contractual adjustments and dividing by your payments. In short, this number should show how much your practice is collecting relative to the amount that is able to be collected after contractual adjustments based on your fee schedule.
For example, a shave removal is performed. Medicare reimbursement is approximately $101.90. Your practice’s fee schedule is 140% over the Medicare allowable so you bill the encounter at $142.66. If paid in full, there will be a contractual adjustment (charge minus allowable) of approximately $40.76. If you collect $101.90, after contractual adjustment, your collection ratio will be 100%.
What if that same claim is rejected on first submission, medical records are requested by CMS, and your billing staff is too busy to address it? Perhaps, they have more work than they can handle (e.g., under staffed) or maybe they do not know how to deal with the denial. Instead, they receive a denial on the $122.66 charge submitted to the carrier after collecting a $20 co-pay and clear the denial by entering an adjustment of $122.66. This claim resulted in a charge of $142.66, an adjustment of $122.66, and a $20 payment; however, the collection ratio still populates as 100% and the $122.66 that you weren’t paid by the carrier has been categorized as an adjustment and is forgotten forever.
At the Inga Ellzey Billing Companies, we solve this problem and promote maximum collections by creating a monthly report that we refer to as the “Claims Rejection Report”.
For any CPT code that is adjusted, for any reason other than the contractual fee schedule, information is provided including the name of the patient, date of service, CPT codes billed, and charges billed along with a paper trail showing the previous claim submissions, denials, and all relevant notes and reference numbers. All Claim Rejection Reports are provided to billing clients with our month-end reports so that there is complete transparency as to how much money is actually being collected.
Often times, claims that ultimately appear on Claim Rejection Reports are the result of provider enrollment or credentialing (non-par) denials, failure to obtain required prior authorizations, using incorrect diagnosis, exceeding Medically Unnecessary Units (like billing too many stages of Mohs), or billing diagnoses that are not covered by the LCDs (Local Carrier Determinations).
Knowing the reason for any non-contractual adjustments is paramount to maximizing revenue on a monthly basis. For example, if the reports show trends in rejections due to prior authorizations, you then know what steps need to be taken by the front office staff to address the issue. If claims have to be adjusted due to a provider who is not properly credentialed by one of the carriers you are contracted with seeing patients, then the staff can be educated not to schedule the provider with this plan.
Your staff is hired to make sure that all CPT codes that are billed are paid. If you don’t know how they are performing, it’s time that you take action to find out. Making sure your billing staff is doing their job. Keeping them accountable will result in a worthwhile return on investment.
After 27 years of perfecting billing processes, Inga Ellzey continues to be the nation’s leading expert in dermatology billing. Our billing service serves over 100 dermatology practices in 37 states without utilizing any offshore labor. Our goal is to make sure that you and your patients receive the most competent and professional service available on the market today.
If you are interested in speaking with our company about how we can maximize your collections while also improving your process, please contact us via our website or call 888-434-4374.
