At the end of the day, there’s no magic to this.
Not rocket science, I promise
Medical billing and revenue cycle management are not rocket science, although sometimes it certainly seems so.
We all usually get caught up in the daily grind of denials.
Taking a step back and wrapping our heads around the “CYCLE” part of the revenue cycle generally helps us understand why things go wrong, end up in denials and why we spend more money in account receivables.. I.e. We spend money in recovering money due.
First advice? Do not confuse medical billing with medical revenue cycle management.
Medical billing is only one part of the entire financial management process for a healthcare organization.
If you want to get paid more and collect each dollar you are owed for the patients you see, you really do need to understand financial management a bit better.
At the end of the day, there’s no magic to this. Think of revenue cycle management along the same lines that you manage your household finances.
Steps in the medical billing revenue cycle
I am not discussing self pay patients here. Self pay patients are a lot simpler.
Your patient pays out of pocket – no insurance companies to deal with, no claims to file, no hassles.
You set the charges and the patient decides if they want to avail your services at your asking price or not.
If they do, you service them, they pay you.
I am talking about the insurance claims processes below.
Simple to understand. Read below to get a detailed explanation for each step as well.
- Credentialing: You / your doctor gets enrolled with an insurance company / payer. They get credentialed with the payer and are contracted by the payer at predetermined rates for specific services (CPT codes). This contract is specific and it states that for this service, under these conditions, at this location of service, the payer will pay the doctor this $ amount if the doctor submits the claim with specific supporting documentation. You already know this.
- Once a doctor is “par” (participating) with a payer and accepts certain plans of that payer, the doctor (provider) is considered in-network for that provider. Each patient that has that insurance and that specific plan can now make an appointment with that doctor. You already know this, I am sure. Just a reminder.
- Eligibility: When the patient makes an appointment, you of course make sure that you accept that patient’s insurance and the specific plan they have. After that, you ensure that the patient’s insurance is going to be valid on the date of the appointment.
- A patient’s eligibility needs to be valid ON the day of service. I.e. On the day the patient is treated. Even if you had checked the patient’s eligibility on the day you gave them an appointment, they might have terminated their insurance (or have their insurance coverage terminated) the day before their appointment. BE CAREFUL and BE WARY of this. ALWAYS, ALWAYS, run an eligibility check of the next day appointments.
- Prior Authorization: Eligibility is the first level of “authorization”. That’s still not a guarantee to pay. You ALWAYS need to know whether the patient’s plan covers the service (CPT) that is going to be performed or not. Over time, of course, you will very easily know which ones are surely covered and which ones are almost always in need of authorization. Prior Authorizations take time to get done. BE CAREFUL and BE WARY of this. ALWAYS be on high alert w.r.t prior authorizations.
- Collecting patient responsibilities: Based on the contract your provider (doctor) has with the payer AND the contract your patient has with the payer, YOU are required to collect dues from the patient. Yes YOU are responsible. By contract 🙂 Yes, my friend. So, never feel shy. Collect, each time, every time. Before the patient goes into the office with the technician. We would advise you to collect even when you give them an appointment on the phone (if you use our EzHCRM, you can). This ensures that the patient has no intentions of being a no-show.
- Coding: Each visit has to be coded. You know this already. Your doctor circles things on a thing called superbill (yes, most doctors still use that). That superbill contains the CPT code. Meanwhile, they enter the ICD in the EMR. You know the difference between CPT code and the ICD already. The CPT is WHAT the doctor did (service) and the ICD is WHY the doctor did what they did. Cool? Coding is that interlinking of CPT to multiple ICDs. You are going to post charges (aka submit claims) to the payer stating that “I did CPT 123 because of ICD 1, 2, 3 on patient A on date xx for charges YY (which is almost always 3x of Medicare set amount each year). So, pay me pretty please”. The payer is going to pay ZZ (contracted, allowed amount, which goes back to the contract defined in the credentialing step). GET THIS CODING PART RIGHT. If you don’t have coding certifications, get certified – it’s not expensive to get certified.
- Charge posting: Prepare the charge or if your PMS does this for you, check the charge for billing compliance. Prepare the claim and add all necessary information to ensure a clean claim. Then, transmit the claim(s). I would say you double, triple check before transmission because the more you check your work, the less chances of denials and the more you avoid double the work and the more you reduce A/R.
- Adjudication : Within or after 30 days, monitor payer adjudication for the claim(s) you submitted. The claim is either going to be denied or paid. It will either be paid fully or paid partially and denied partially. When the claim is paid, the payer is going to bundle multiple payments into one. Your team will have to deconstruct this and make sure that payments are posted in your charge posting software against the claims made.
- Denials: If needed, handle the denial based on why the claim was denied.