Safeguarding Your Billing/Collection Process

Health care billing and collection systems pose unique challenges to providers and the staff. In most non-health care businesses, the price of the product or service being billed is easily discernable, and the amount charged will usually be the amount collected. Not so for health care practices, which, due to the many number of possible payers, may not know how much will be paid for a service and from whom the payment will come. Thus, safeguarding the billing and collection process becomes a priority for all heath care providers. Without determining the possibilities of what a particular system can accomplish, a general rule is that the more expensive a system, the more information and, possibly, safeguards, can be provided to the user. However, all systems should allow for at least the basic opportunities to capture, control and report on the key information needed to safeguard your asset—the amount due for services.

Capturing Charges

Before the charges are input into the system, they must be properly captured, usually on a document developed by the practice listing the most used procedure and diagnosis codes. The document is usually prepared by the provider of the service. The provider, as well as the billing coordinator and other personnel, should be aware of the appropriate use of each code, and the appropriate level of service being provided and billed. It is important to know the current use of codes, as they are subject to change over time. Billing with the incorrect code will lead to an incorrect charge and payment.

Inputting Charges

Charges for services performed by providers should be input as soon as possible. Service is complete, so the collection process should begin. Providers should have a process that captures both office and hospital charges routinely, so that reimbursement payments will flow smoothly. The delay will only slow payment, and an extended delay may prevent any payment due to "past filing dates" found in many payer contracts.

Collecting Payments at Time of Service

Sending a bill to a patient costs time and effort, some of which can be avoided by collecting co-payments and deductibles at the time of service. Patients are receptive to payment at time of service, but some will pay only if asked. Most patients will carry a credit card, so be prepared to accept one if it is offered.

Submitting Charges

Insurance companies expect a properly completed charge submission prior to the payment for the service. Therefore, your system, if possible, should "flag" any claims which appear to be incorrect to allow for correction before the initial submission. Appropriately filed charges should be transmitted and a payment should be expected in a reasonable period of time.

Review the Rejected Claims Report

Many insurance providers will submit a rejected claims report so that you can determine if they have an initial problem with your claim. Be sure your staff is aware of this step, and build it into your process if you are not. Re-submit the rejected claim as soon as possible.

Payers Request for Additional Information

On occasion, payers will request additional information to pay a claim. Respond promptly and accurately to their request, and if necessary, determine what modifications need to be made to your processes to eliminate the slow-down in the payment process. If you see a consistent request for information regarding a particular procedure, determine what you can provide at the initial submission to eliminate the request for the additional information.

Payment of Submitted Claims and Reconciliation

Many payers will direct deposit funds directly into the provider's checking accounts. Direct deposit prevents loss in the mail, and provides a safeguard for the provider. If a payer sends a check in payment of the claim, be sure that it's stamped "for deposit only" when the mail is opened. Use of appropriate internal controls is paramount, so review how your staff is set to open the mail and control the receipts. It is important to reconcile the cash deposits (by mail, in person co-pays, or by direct deposit by payers) to the accounts receivable reports as a safeguard from loss.

End of the Period Close Out

Many systems run on a "real time" basis and therefore do not easily provide information to reconcile the actual receipts to the deposits to the bank, unless procedures are in place to capture the data on the appropriate day at the end of the period. Procedures must be implemented to provide the data to safeguard accounts receivable, as it is one of the most important provider assets. Gerard J. Kassouf, CPA is a director at the Birmingham, Alabama firm of L. Paul Kassouf & Co. P. C., Certified Public Accountants and Advisors--representing privately-held and family-owned businesses. Reach him at gkassouf@kassouf.com