The Ten Biggest Mistakes Billing Offices Make - And How to Avoid Them

By Elizabeth Woodcock  |  December 20, 2010

10 Mistakes of Billing Offices2011 brings significant challenges for professional fee billing. With medical reimbursements stagnant or declining in the face of rising practice costs, there is little room for error. Medical practices need top-performing billing offices now more than ever. Unfortunately, many billing operations seem to spin their wheels, making the same mistakes over and over. To guide your practice to success, take steps today to avoid these ten mistakes that billing offices all too commonly make:

  1. Always blaming poor performance on insurance payers. It’s easy to denounce one – or perhaps all – of your insurance payers for higher denial rates, plunging reimbursement or an increase in write-offs. The relationship between payers and providers is at times so caustic that they make easy targets. Successful billing offices don’t look for scapegoats. They recognize that there are indeed problems stemming from payers – slow payment, inconsistent application of reimbursement rules and inappropriate denials, just to name a few. But successful billing operations also know that addressing internal performance improvement, while simultaneously targeting those external challenges, is a priority.
  2. Not measuring key performance indicators consistently. Every manager thinks that their operation is top-notch. And, with such a “perfect” operation, they may see no reason to closely monitor performance. Successful billing offices realize that keeping track of performance indicators is critical. Create a dashboard of key performance indicators that includes days in receivables outstanding, aged trial balance, adjusted collection rate, cash and other important indicators for your practice. Agree on how to define the indicators and commit to measuring them monthly. Success depends not only on how well they are monitored, but also on sharing the information with all stakeholders as a means to root out inefficiency, stop costly mistakes and improve performance.
  3. Hiring the wrong people. With so many advertisements for billing courses, it seems that everyone is a “trained” biller these days. Combine the proliferation of training courses – some good, but some very bad – with the propensity of job candidates to stretch the truth on their resumes and it’s easy to see how hiring the wrong employee is more than sporadic, it’s epidemic. Successful billing offices know that finding the right staff member is not only important, it’s essential. A resume review and a 30-minute interview are simply not enough; checking references, verifying credentials and conducting pre-employment testing are vital steps before making the decision to hire.
  4. Failing to recognize the importance of internal controls. By some estimates, as many as two out of three physicians will be victims of embezzlement during their careers. Considering the volume of transactions (and money) each staff member handles and the lack of internal controls, the environment is ripe for stealing in most medical practices. Successful billing offices don’t wait until a problem occurs. They avoid embezzlement problems by establishing a comprehensive framework of internal financial controls, adhering to those controls and making careful hiring decisions. Preventing fraud and embezzlement depend on separation of duties, tight controls over payment processing and rigorous accounting oversight.
  5. Thinking they control the entire billing process. In today’s environment, a practice cannot achieve financial success by attempting to house every aspect of the billing process within the four walls of a billing office. Successful managers understand that revenue cycle activities extend to every corner of the practice. Achievement starts with negotiating contracts that establish the practice as an equal partner with its insurance payers. The provider enrollment process is completed in a timely and accurate manner. The front office, clinical staff and billing office work together to complete their respective tasks in pre-service financial clearance, time-of-service collections and effective charge capture at the practice site. Failing to consider all functions associated with the revenue cycle – and where they occur – results in poor performance. When these functions are fully defined and closely monitored, the billing office can indeed be successful.
  6. Buying a great practice management system, but never fully utilizing it. It’s easy to blame the practice management system for problems – the system can’t post a charge, print a report or take an adjustment. Although every system has its challenges, the untrained user is the biggest limitation of all. Stop longing for the system on which you were originally trained and stop comparing every other system to it. Successful billing offices know that the old system had more failures and shortcomings than one may choose to recall. And the old, simple-to-use management software could hardly keep up with today’s demands. Performance depends on tapping into the vendor’s knowledge and developing one’s own skills in using the system. Successful billing offices also reach out to other users to learn from their experiences.
  7. Failing to take advantage of automation. With the current focus on electronic health records, it’s easy to overlook the many new applications of technology in the billing office. Successful billing offices recognize that, as the volume of transactions increases while reimbursement for each declines, automation is critical to maintaining profitability. The onus is on today’s billing offices to do more work with fewer people. To do so, you must take advantage of medical billing software that automates charge capture and entry, scrubs codes, manages staff tasks, remits electronically, uses predictive dialers and many more applications.
  8. Taking write offs. Insurance payers routinely deny payment for services – often the denials are for line items, but sometimes for an entire claim. Lazy billers do not hesitate to write off these accounts. By adjusting the money off to a code tied to the payer, they treat these adjustments as contractual adjustments and, thus, effectively, though unintentionally, hide the real reason for the non-payment. Successful billing offices recognize that their job is much more than just keying and posting. Working denials, even at the line item level, is essential. When services must be adjusted, successful billing offices use special codes to monitor these write-offs – and they look for opportunities to avoid those problems in the future.
  9. Batching work. Let’s face it – even with the best technology, there is plenty of paper floating around a business office. Paper breeds professional organizers – people who can’t seem to get away from paper so they produce it, even when they don’t have to. Professional organizers often spend more time organizing the work – printing and sorting reports, using highlighters to mark accounts and filing paper in folders – than actually doing it. Successful billing offices recognize that organization is key, but they use automation to assist in workflow. They hold staff accountable for performing work, not simply batching it.
  10. Failing to prioritize. There’s always more work in the billing office than can be done, so prioritization is critical. If you can’t balance all of the responsibilities – keying charges, posting payments, appealing denials and so forth – you won’t be successful. Successful billing offices recognize that the prioritization of functions is critical, day in and day out.

It’s human to make mistakes, but knowing that you made them is essential to avoiding repeating them. There’s always room for improvement. So, with the new year upon us, now’s the time to figure out ways to learn from your mistakes. Commit to making your operation a success by avoiding the ten biggest mistakes that billing offices always seem to make.

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