Nov 10, 2020 | Medical Billing Software Blog, Partner, Revenue, Support and Training, Waystar
There are five ‘phases’ in the life cycle of a medical bill: Pre-appointment; Point of care; Claim submission; Insurance payment or denial; and Patient payment. This post will overview each of these phases, and could even be considered to be a “101-level” course on Revenue Cycle Management.
With high deductible health plans on the rise, the recent explosion of telehealth appointments due to COVID-19, and many other factors in play, it’s more important than ever for everyone to understand the life cycle of a medical bill, and how the process works. The healthcare revenue cycle is relevant not only to those who work in healthcare, but to the patient, too.
The revenue cycle is the series of processes around healthcare payments—from the time a patient makes an appointment to the time a provider is paid—and everything in between. One way to think of it is in terms of the life cycle of a medical bill. Although there are many ways this process can play out, this post will lay out a common example below:
1. Pre-appointment
For most general care, the first stage of the revenue cycle begins when a patient contacts a provider to set up their appointment. Generally this is when relevant patient information will begin to be collected for the eventual bill, referred to on the financial side of healthcare as a claim.
At this point a provider will determine whether the appointment and procedure will need prior authorization from an insurance company (referred to as the payer). Also, the electronic health record (EHR) used to help generate the claim is created, and will begin to accumulate further detail as the provider sends an eligibility inquiry to check into the patient’s insurance coverage.
2. Point of care
The next step in the process begins when the patient arrives for their appointment. This could include when a patient arrives for an initial consultation, an outpatient procedure, or for a follow-up exam. This could also include a Telehealth appointment.
At any of these events, the provider may charge an up-front cost. One example of this is a co-pay, which is the set amount patients pay after their deductible (if they are insured), however, there are other kinds of payments that fall into this category, too.
3. Claim submission
After the point of care, the provider completes and submits a claim with the appropriate codes to the payer. In order to accomplish that, billing staff must collect all necessary documentation and attach it to the claim. After submitting the claim to the payer, the provider’s team will monitor whether a claim has been been accepted, rejected, or denied.
[ Note: Medical coding refers to the clerical process of translating steps in the patient experience with reference numbers. The codes are normally based on medical documentation, such as a doctor’s notes or laboratory results. These explain to a payer how a patient was diagnosed and treated, and why. This information helps the payer decide how much of an encounter is covered under any given insurance plan, and therefore how much the payer will pay. ]
4. Insurance payment or denial
Once the payer receives the claim, they ensure it contains complete information and agrees with provider and patient records. If there is an error, the claim will be rejected outright and the provider will have to submit a corrected claim.
The payer then begins the review process, referred to as adjudication. Payers evaluate claims for accurate coding and documentation, medical necessity, appropriate authorization, and more. Through this process, the payer decides their financial obligation. Any factor could cause the payer to deny the claim.
If the claim is approved, the payer submits payment to the provider with information explaining details of their decision. If the claim is denied, the provider will need to determine if the original needs to be corrected, or if it makes more sense to appeal the payer’s decision.
Following adjudication, the payer will send an explanation of benefits (EOB) to the patient. This EOB will provide a breakdown of how the patient’s coverage matched up to the charges attached to their care. It is not a billing statement, but it does show what the provider charged the payer, what portion insurance covers, and how much the patient is responsible for.
5. Patient payment
The next phase occurs when the provider sends the patient a statement for their portion of financial responsibility. This stage occurs once the provider and payer have agreed on the details of the claim, what has been paid, and what is still owed.
The last step occurs when a patient pays the balance that they owe the provider for their care. Depending on the amount, the patient may be able pay it all at once, or they might need to work with the provider on a payment plan.
The above example represents one way the lie cycle of a medical bill can play out. Some of the ‘phases’ are often repeated. Because of the complexity of healthcare payments and the parties involved, there is not always a ‘straight line’ from patient care to complete payment. That’s why we call it the revenue cycle, and there are companies that provide systems for its management.
One of EZClaim’s partners, Waystar, aims to simplify and unify healthcare payments. Their technology automates many parts of the billing process laid out above, so it takes less time and energy for providers and their teams, and is more transparent for patients (Click here to learn more about how Waystar automates manual tasks and streamlines workflows.) When the revenue cycle is operating at its most efficient, providers can focus their resources on improving patient care—and that’s a better way forward for everyone!
For more information of how Waystar works together with EZClaim, click here.
[ Article and image provided by Waystar ]
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ABOUT EZCLAIM:
EZClaim is a medical billing and scheduling software company that provides a best-in-class product, with correspondingly exceptional service and support, and can help improve medical billing revenues. To learn more, visit their website, e-mail them at sales@ezclaim.com, or call a representative today at 877.650.0904.
Dec 10, 2019 | BillFlash, NexTrust, Partner, Revenue
9 Signs It’s Time to Outsource Your Medical Billing and Coding.
Contributed by James Easley, VP, Marketing of NexTrust, Inc
Should a practice outsource their billing and coding or manage it in-house? This is one of the most important business decisions for practices to get right. Which is the better option for your practice? Here are nine signs that it may be more financially beneficial to outsource medical billing.
1. Do You Lack Visibility into Billing and Payment Metrics?
Do you know your key financial metrics and how to improve them? Many practices are not aware of their actual revenue metrics which are the “vitals” for the financial health of their practice. For example, only about 35% of practices appeal denied claims, which means most are losing out on thousands of dollars every month.
Without the ability to measure these financial vitals, it’s difficult to know how to improve. Does your practice have a financial analyst as well as the staff with the skills to identify problems and make improvements? If not, practices should consider looking at external experts to provide these metrics and are able to make the necessary billing improvements.
2. Is Your Revenue Decreasing?
For practices that are aware of their billing and payment metrics, are you seeing your collections decrease? Is the time it takes to collect increasing? Unfortunately, this is more and more common among practices due to the ever-changing complexity of the insurance billing processes. Outsourcing is not the only solution, however fixing this problem internally can often be costlier and time-consuming than outsourcing.
You need a solid income stream to keep your clinic operating effectively. If billing mistakes, coding complexities, and reduced reimbursements or denials have negatively affected your collections, then you need to consider outsourcing your billings and collections to keep your company from falling victim to a bad revenue stream.
Not only does this keep your business running optimally, but it also allows your personnel to focus on other responsibilities and ensure quality customer service.
3. Are Billing Errors and Rejected Claims Costing You Money?
The American Academy of Family Physicians reports that a 5-10% denial rate is the industry average. To be financially sound, practices should do what’s necessary to keep this rate below 5%. Because high claim denial rates require additional costs and staff time to correct and resubmit, many practices have found the outsourcing resolves this issue and provides higher net income overall.
4. Are You at Risk of Staff Absence or Turnover?
While every industry faces the challenges of staff turnover, the effects are often felt acutely among medical practices when billers leave. Since claim processing is integral to the lifeblood of a practice, replacements or new additions to your billing department unavoidably result in a slowdown in claims processing. Practices can remove this variability and risk through outsourcing their billing and pushing the staffing burden to the third-party. Practices then rely on a team that can ensure the work of claim processing continues without interruption.
5. Are Staff Billing and Coding Skills and Training Insufficient?
Many practices take on the responsibility of hiring, managing and training Internal billing and coding staff. This works well in many practices. However, if billing and coding staff is under-experienced or not current on compliance and regulatory issues, practices must cost-effectively provide regular training to get and keep them current. Practices that prefer not to take on these burdens can find a simple solution in outsourcing.
6. Has In-house Billing Become Too Expensive?
Considering the costs of hiring, salary, benefits and administrative costs of in-house medical billers, practices may find it costs less overall to outsource their billing.
In addition to employee costs, practices must purchase equipment, software, and more. In-house billing costs can quickly add up. Practices should compare internal costs to outsourcing to determine both the best operational and cost-effective methods for billing and coding management.
7. Do You Have New Providers or a New Practice?
Newer practices may find it difficult to navigate the complexities of medical billing and coding. These new practices or practices with new providers need to ensure they are focused on growing their business and providing a high level of care.
Delegating important responsibilities to a trusted third-party allows new practices and providers to do just that. Outsourcing your medical billing during this time can relieve the burdens of hiring, training or managing a team of new billing employees.
8. Is Your Clinic Growing?
A growing practice can have similar challenges as a new clinic. Reputation is critical when growing your business and ensuring high-quality patient attention and care can become more difficult.
As your staff will likely be tasked with more responsibilities and duties during this growth period, why not ensure they can still provide meaningful services by taking some of those administrative duties off their hands. Your personnel will thank you for this by continuing to provide quality care to patients, which in turn will help you to continue growing.
9. Is Your Attention Divided Between Patients and Running a Business?
Overseeing internal billing and coding requires a substantial amount of effort, time, and expertise. Without dedicated staff to handle this, the responsibility can fall on the shoulders of clinic owners, physicians, or other administrative staff.
This can mean less time focusing on patients or other relationships and practice management responsibilities. When practices outsource the billing process, physicians and administrators are free to focus on providing quality healthcare services to patients.
If you found yourself nodding your head to one or more of these questions, it’s worth taking some time to learn if outsourcing would be better for your practice. NexTrust offers both patient and insurance billing services that not only improve revenue but allow providers and staff to focus on providing the highest level of care.
Free $25 gift card with RCM demo
Call NexTrust today 435-940-9123 or email us at rcm@billflash.com to learn how our Patient Billing and Insurance Billing services can improve the financial health of your practice.
Stay tuned to our blog for the latest information related to the medical billing field from EZClaim and our esteemed partners.
