August 03, 2020

Best Practices - Providers
Process the Claim 

1. Patient registration -  Data entry errors and omissions can lead to thousands of dollars in lost revenue. Not only are many insurance claims rejected due to inaccurate information, but incorrect addresses also lead to postal return of patient invoices.


When a patient arrives at the location, the front office should verify that all demographic information is complete, that information reported on forms matches patient identification and insurance cards, and that data are accurately entered into the billing system.

If the patient has been seen before, it’s inadequate to ask, “Has your information in the system changed?” Instead, the front desk should have the patient review and initial a printout of address, employment, and insurance information to signify that it is all correct.


2. Collect copayment, deductible, and patient balances - Failure to collect patient financial responsibility prior to treatment too often results in patients “walking out” without paying or “forgetting” their checkbook. Copays should always be collected by the front desk at registration. It’s also a good idea to review the patient’s account and collect any prior balances due before the patient incurs additional charges. If insurance verification shows a deductible, the policy should be for the patient to pay a “deposit” (typically $100 to $150—the cost of an “average” visit) up front and then settle any balances when charges are calculated after treatment. If it turns out after submitting an insurance claim that the patient had already met his or her deductible elsewhere, it’s generally cheaper to mail refund checks than to pursue and write off uncollectable balances.


3. Provide care, document services, and post charges -Thorough documentation is necessary for accurate coding and charge entry and to support insurance claims.

While the patient is still in the exam room, the provider should document the patient’s history, physical findings, all diagnoses, services performed, supplies used, prescriptions or tests ordered, and patient instructions. Charges should then be entered into the billing system immediately after the visit; this not only assures timely claims submission, but the provider will be readily available to answer any questions about procedures and coding.


Providers should understand what services are reimbursed by various health plans, and charts should be regularly reviewed to assure the documentation supports the level of service, that non-reimbursed services are limited to what’s medically necessary, and that no money is being left on the table by under-coding or omitting billable codes. Regular chart audits can also identify coding issues resulting in rejected claims.

4. Generate and submit claims correctly - When a third‐party payor rejects a claim, correcting and resubmitting can add two to three weeks to the accounts receivable cycle. Health insurance claims are most often rejected due to missing or inaccurate information, including patient name, subscriber information, and diagnosis and procedure codes.


Many practice management systems include “claim scrubber” functionality that assures all fields have been populated with properly formatted data and that coding, bundling, and procedure information complies with Medicare and/or Correct Coding Initiative (CCI) rules. Since such systems are only as good as the data they contain, following steps 1 through 5 above is essential in assuring accurate information on insurance claims.


5. Monitor, receive, and document insurance reimbursement - After an insurance company processes a claim, it sends an Explanation of Benefits (EOB) detailing what services were billed and how much the insurance company and patient are responsible for paying. To assure receivables are not carried on paid accounts, and to invoice patient balances in a timely manner, staff should post EOBs to the patient record immediately upon receipt. To expedite posting, many medical billing applications and insurance carriers support electronic remittance services in which EOB data is sent digitally to the billing system.


6. Pinpoint reimbursement problems and appeal denials - Most medical billing platforms offer reports illustrating claims, balances, accounts receivable aging, and frequency of denial codes by provider and payor. These reports should identify which accounts and insurance plans require the most attention.


A pronounced trend involving a particular provider or payor may indicate process issues related to documentation, coding, charge entry, or claims submission. When this occurs, immediate corrective action should be taken to avert future denials. Otherwise, it’s necessary to review each denied claim and determine whether additional information is needed, errors need to be corrected, or if the denial needs to be appealed.

When working balances, start with older claims first for timely filing compliance, then work the largest dollar values.


It’s usually most efficient to concentrate on one payor at a time, engaging the insurance company’s provider services representative or regional executives to address systemic concerns.Billing representatives should utilize a tickler system to remind them when it is time to follow up on previous contact regarding a claim. When managing billing staff, consider offering incentive pay based on total collections or call activity to motivate staff to actively pursue—and stay on top of—each individual claim.


7. Invoice the patient - Patient invoices should be sent as soon as the EOB is posted because the sooner an invoice is received by the patient, the more likely and faster it is to be paid. Because patients are less likely to pay medical bills they don’t remember or don’t understand, patient invoices should clearly detail the date of service, services performed, insurance reimbursement received, payments collected at time of service, and the reasons behind any patient balances due.


To achieve a patient-friendly look and feel—and scale economies in production and mailing—many providers utilize third parties to print and mail invoices.

Accepting credit card payment over the telephone or Internet can also reduce costs and accelerate payment versus requiring patients to write and mail a check.


8. Write-offs and third-party collections - The financial policy should address handling of past-due accounts. Typically, provbiders automatically write off small patient balances (e.g., less than $5 or $10) for which processing costs exceed potential collections. The process for larger balances should designate time intervals (such as 15, 30, 60, 90, or 120 days) for sending a first invoice, second invoice, warning letter, and then disposing the account to a third-party collections agency. Time may begin accruing either from the date of service or receipt of the EOB indicating the patient is responsible but, in either case, the faster this process occurs, the greater success in collections.

 Related Resources:
2. "How Insurance Claims Work", by Melissa Jeffries, Discovery Channel (2009).

April at Dr Baker's office explains the claims process for their patients' edification. At approximately :45 mark, she imparts the most important information that when a health insurance denial is received, you're going to get billed. How much you're on your own after that as far as the appeals process is an open question.

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