Unless you’re owned by a hospital or operate as a charity, collecting more of your hard earned money is key to flourishing in your urology practice. Most of the urology practices that we consult with have an average collection rate of around 75%. This means that you are missing out on 25% of the money owed to you. The insurance companies certainly don’t make it easy to collect every penny but that doesn’t mean it’s not possible. We have seen some offices with collection rates in the 50-60% range which typically means all of their profit is still in the insurance company’s bank account. We would like to take a few minutes and share some essential elements to optimizing your collection rate.
The best place to start is at the beginning. You should have a detailed grid showing effective dates, provider numbers, linked locations and timely filing rules for each of your provider’s and payers. Without this information, it is extremely difficult to evaluate why you are getting denials or what you should do about it. Insurance companies are constantly adding new plans or changing policies and fee schedules that affect the way you conduct business. It’s essential that you stay on top of this and get ahead of any revalidation or recredentialing requests to ensure you’re not finding out when you start seeing denials.
Now that you have your credentialing grid refined, it’s now time to document each payer’s guidelines when it comes to authorization. Even if you are participating, failure to properly authorize your service will lead to a denial that is very difficult to overturn. Authorizations represent an achilles heel for most practices and education is the only way to ensure this denial category is empty. Your staff or billing company must be acutely aware of how each payer handles authorizations and for what services you actually need one.
Patient collections, or rather the lack thereof, represent an enormous percentage of most urology practice’s total AR. This is in large part due to hospital or outpatient surgeries where the patient doesn’t handle their responsibility before being treated. Obviously, you can’t tell a patient in the ER that they have to pay you $1,000 before you’ll take care of them but that doesn’t mean you can’t be more proactive about collecting for your services. Most insurance plans have some type of co-insurance which usually represents 10-30% of the total allowed amount from the insurance. This 10-30% often represents your profit as the insurance company’s allowed amount rarely leaves much on the table after covering expenses. While doing procedures in the hospital is unavoidable, you should always try to schedule as much as you can at a local surgery center or do the procedure in your office. Both of these scenarios give you an opportunity to collect your fee prior to the operation. If you are in an area seeing a ton of patients at the hospital and as a result seeing an inflated patient AR, it is time for you to have a conversation with hospital administration to see what subsidies are available so you can continue to help their patients. While we believe strongly in an aggressive and thoughtful patient collection strategy, we also know that collecting for a service once they leave your office can be incredibly difficult. Collect now or kick yourself later.
This really seems like common sense but you’d be amazed by how many practices do have an insurance follow-up strategy. Ask your billers how often they’re calling on claims in each aging bucket? If they don’t know then that’s a sign that you’re leaving at least 10% of your money on the table. Once a claim remains unpaid after 30 days, there should be definitive method to the madness. Haphazard follow-up will lead to inconsistent cash-flow. There should be blocks of time set aside each day or each week for follow-up and every claim needs to be touched every 15-30 days depending on staff availability. Failure to follow-up efficiently means that you could be facing a timely-filing limit by the time you actually find out that you need to resubmit the claim.
Reporting may seem boring and an inefficient use of your billing staff’s time but that couldn’t be farther from the truth. Education is empowering and will help drive your practice to success. In addition to the basic aging information, you should also know how long each payer takes to pay a claim, what your denial percentage is by plan and what your return on time or per patient is for each plan. It’s oftentimes the case that the plans with the highest percentage of denials also have the lowest return on your time because their contracts are poor or members are needy. Other items that should be included in your monthly report are: drug costs/profits, UDS costs/profits, imaging costs/profits and anything else that has a fixed cost associated with it being provided. It’s alarming to us to see so many practices losing money every month on services or products that used to be profitable. Drug prices and reimbursement change quarterly, which means it’s easy to end up losing money without proper reporting.
There are many other keys to improving your collection rate but start with these and you’re sure to see a dramatic improvement.