Have Peace of Mind While You’re Away This Summer When it Comes to Your Dermatology Billing
Don’t let the worry of your practice’s dermatology billing get in the way of enjoying some time away from the office.
Summer is the ideal time to take a break, embark on a vacation, enjoy family and friends, and recharge for the remainder of the year. Yet many physicians struggle with the thought of leaving their business behind, fearful of what might occur while they’re gone, particularly related to their cash flow and bottom line.
Don’t Let It Happen to You: Insufficient Medical Billing
Unfortunately, there are many dermatologists throughout the U.S. who are losing money due to deficient dermatology medical billing processes and poor revenue cycle management practices. This can include in-house staff not entering charges for patients seen, not billing patients, not posting payments accurately, not following up for payment, not working outstanding accounts receivable (A/R), and so on—risking hundreds of thousands of dollars lost over an extending period of time for an average sized practice.
How can you enjoy a day at the beach if you’re unsure whether or not this is happening in your office, when you are there or not?
To have peace of mind, it’s imperative that you watch your business closely, know what questions to ask of your staff, and implement the proper controls and reports in order to identify symptoms of loss.
Establish Greater Visibility With Your Dermatology Billing
It’s important to create transparency within your office, letting employees know you are actively involved in monitoring the financial performance of your practice, reviewing reports that may indicate there’s a problem and giving staff the opportunity to help increase visibility into your dermatology billing operations.
Establishing this as part of your culture is a huge asset in controlling and managing your bottom line, as everyone knows it’s a shared responsibility for the practice’s success. When you have this environment, you can trust your people to have your back—particularly when you’re away.
If you are not establishing visibility when it comes to your dermatology billing, you are providing an atmosphere that can lead to undesirable revenue cycle management practices. This will impact your bottom line and result in financial loss that can significantly impact the profitability of your practice.
Review the Right Metrics and Reports When it Comes to Medical Claims Processing
Gaining visibility and a handle on your billing operations is not that difficult, yet it requires you to understand and review metrics and reports directly related to your revenue cycle management. Many physicians claim they have good insight into their billing process and activities, however, they struggle to answer basic questions such as:
- How often does your staff work rejected, denied or partially denied claims?
- What is the percentage of claims that go out “clean” (are not rejected by clearinghouse)?
- How many claims are denied?
- How fast are rejected claims addressed and resubmitted?
Oftentimes, a practice believes it’s doing great because collections are higher than they have ever been, but that doesn’t tell the whole story. Are you actually collecting more of what is legally owed to you? Or are you just seeing more patients, generating more charges, and increasing collections at the same collection ratio? In other words, are you working smarter or harder?
Sound dermatology revenue cycle management will include metrics and reports that provide answers to the questions above and, ultimately, indicate the health of your financial performance.
Payment Velocity is Key
One of the most important metrics you should pay attention to is payment velocity—the average number of days it takes a claim to be processed and paid. This will tell you how fast you’re getting paid, which is important throughout the year, but certainly when you plan to be away for a period of time and want consistent cash flow despite not seeing patients.
A higher average number of days means healthcare claim payments are being delayed and this could be caused by a number of factors, including:
- Claims are not going out “clean” (e.g., incorrect procedure code, diagnosis or modifier)
- Claims are not being sent in a timely manner
- Claims are not complete (e.g., lack of demographic and insurance information)
- Claims are not being fully paid by payers
- Claims are not being received by payers
All of these factors can be identified and managed before the claim is submitted. Yet many practices don’t have the integrated revenue cycle management software or capability, and therefore no visibility into what has been rejected. Rejected claims may sit there for a period of time or, worse, never get resubmitted accurately. So while you’re on vacation, cash flow may become stagnant placing stress on you upon your return. So much for the recharge, huh?
Ensure Denied Medical Claims are Resubmitted
Denied healthcare claims also impact your financial performance and can easily be addressed if you and your staff are staying on top of them. Similar to the rejections, denied claims are sent back to you (unpaid) typically because of incorrect information. Oftentimes the error is obvious: a missing diagnosis or modifier, an incorrect global period, missing insurance information, etc. A member of your billing staff must then pull the claim, review the denial comments, fix the error(s) and then resubmit.
Again, many providers do not look at how their claims are being managed and processed. Claims should be submitted within three days of service date, and rejected or denied claims should be addressed and resubmitted immediately. The longer you wait to submit or resubmit medical claims, the more difficult it becomes to receive full payment—not to mention running into timely filing issues.
The industry benchmarks for rejection rate and denial rate are below 5 percent and 10 percent, respectively.* A lower number of rejections means your medical claims are going out complete and “clean,” while a lower number of denials means more of your claims are being paid the first time through. Wouldn’t it be nice to know this is the case before you step away for days, weeks, or even months, with confidence that your cash flow will remain steady during your absence?
Consider Integrated Revenue Cycle Services
Whether you manage your billing in-house or through an outsourced dermatology billing company, most physicians review only what is presented to them, and, oftentimes, it does not include rejection and denial information. This can lead to financial loss if you believe all is well, when really you have a high number of rejected and denied claims that is negatively impacting your cash flow and business.
Why is revenue cycle management important in the healthcare industry? Integrated revenue cycle management, or RCM, offers an ideal solution to gain greater control and visibility over your practice’s financial operations and performance. Bringing together the people, processes, and technology to seamlessly manage your dermatology medical billing operations can yield a variety of operational, financial and patient care benefits.
Atop the list is the opportunity for you to enjoy a break this summer with greater peace of mind knowing your practice is optimizing revenue and cash flow through more efficient reimbursement and higher collections.
Not sure where your practice stands? Contact us today for a free cash flow analysis that can help uncover your rejection and denial rates, among other key financial performance metrics and reports.
Vice President of RCM Services
As Vice President of RCM Services, Ales Cejka leads all aspects of the company’s and its subsidiaries’ revenue cycle management (RCM) operations, which include billing and collections for participating physician practices.
Ales brings years of experience in medical coding, auditing and RCM operations. He previously worked as Vice President of Operations for MedData, a leading provider of technology-enabled healthcare services designed to improve financial outcomes for multi-specialty physician groups, as well as hospitals by enhancing the patient experience and expanding their access to healthcare. Ales received his degree from Charles University in Prague.