Business Solutions

The Rx for Billing Headaches: Outsourcing

Chasing payments is a pain. Billing services can bring relief.

• By Holly J. Wagner
• Oct 01, 2019

You’ve probably helped thousands of people get rid of their headaches. Billing service providers want to help you get rid of yours.

“Nobody got into DME because they really like codes and modifiers,” says Joey Graham, General Manager of Prochant. Michelle Tohill, director of Support & Revenue Cycle Management at Bonafide, cites an American Medical Association survey that estimated medical offices waste about $14,600 a year on rectifying denied claims through appeals, phone calls, and troubleshooting. Add to that any amounts that go uncollected and…Ouch!

Billing services may be the pain reliever you’ve seen on the shelf, but keep walking past and go on with what you’ve been doing. Maybe you think they cost too much, or your pain isn’t really that bad, or it will just go away on its own.

Most likely, none of those things are true: If you’re thinking about it, the pain is that bad. It won’t resolve itself and the cost you fear is probably well worth the benefits.

You just have to hold your nose and take your medicine.

TAKE YOUR BUSINESS TEMPERATURE

What are your symptoms? If the answer is bursting file cabinets, stacks of unpaid invoices, humming FAX machines or business software that’s managing you instead of the other way around – or all of the above – it’s time. Experts cite three main symptoms that tell you to call a professional:

Staff -- Billing tasks are not clearly defined or assigned; or the person managing billing isn’t properly trained or communicating effectively with management; or an in-house billing specialist is just more than you can afford.

Overdue invoices – Your invoices past 30 days are piling up, or blowing past 30 days to 60, 90 or even 120 days; or your insurance payments are current but co-pays are lagging.

Claims Denials – increasing frequency and/or reasons for denied claims; risks to accreditation.

“There’s a lot of different payers out there. Depending on what state they are in or multiple states, depending where their approvals are coming in, there’s significant complexities of the documentation requirements. Those are the front end areas that ensure clean claims to begin with,” says Phil Socoloff, senior vice president of Brightree Services. “If you can address clean claims on the front end, you will reduce your problems on the back end.”

Maybe you’re so focused on your core strengths that you trust someone else to do the egghead stuff, and it may not be getting done as well as you think.

“Prior to reaching out they think they know, or that people who are doing it know. When they aren’t liking what they are seeing, they go back in time and look at more numbers. Then they see a problem,” says Terri Minnich, owner of A Perfect Billing Service.

Your assessment of your business will be the basis for your early conversations with billing services. They will also want access to your business data so they can analyze your workflow and make specific recommendations.

“We will do an analyzation to see what are they getting denials on, what are they writing off, what are they billing, how much are they actually collecting – whatever they say, we know that it’s going to be less. They are confusing what they are billing and what they are collecting, because there is always a huge variable in those numbers,” Minnich says. “A lot of times they have an absolute disconnect. They are relying on whoever is doing their billing for that information. They are so busy with what they do and their world that they are relying, a lot of times, on people who aren’t watching numbers. They’re just sending stuff out the door and doing their best to keep up with the documentation.”

EVALUATE YOUR OPTIONS

Choosing a billing service is a bit like choosing a medical professional. You don’t go to a surgeon for an allergy, right? Billing service options range from small, independent services that work mainly with small clients to huge corporations that have the bandwidth to work with large, regional and national DME providers.

Even the industry can’t agree on specific delineations, but in general a DME billing less than $3 million a year is small, $3 million to $8 million is medium, and over $8 million is large. There’s a lot of wiggle room in those strata so it’s best to ask each provider.

“There are services that specialize in different size DME providers. First find the companies that work with companies like you,” advises Graham. “There are a lot of small billing companies that focus on small DMEs. They are a little more expensive, but very high-touch. They really do a lot and they are a great fit for those companies.”

There are also services that focus on different DME categories. In general, Graham says, look for someone with “a deep understanding of your payer and product mix.”

Fortunately, the medical billing industry is a highly networked web of partnerships and contacts that can help you find the right fit. If you contact a company that doesn’t serve DMEs your size, or offer the services you need, or work with your software, there’s a good chance they can refer you to someone who does.

“My main partners are the software systems that provide billing software. Depending what billing software the provider is using to do their billing, I will direct them to a billing service company that is familiar and uses that software,” says Bruce Gehring, senior vice president of Business Development at Allegiance Group. “You have to have a certain amount of expertise on the software.”

One reason for that is reporting capabilities. All of the billing providers stress the importance of using software that lets you pull up a variety of reports to help flag specific problems and drill in to your work flows, so you can adjust processes to be more efficient.

“What we usually see with the small providers, they come on and they aren’t looking at the data within their system. A lot of resources and time tend to be spent getting that claim out the door, and working that claim maybe the first time, but they lose sight of all those invoices that are aging, getting into that 90-day, 120-day range. They have to keep up with what is coming in new as well as keeping up with what’s old,” says Sunil Krishnan, vice president, Global Operations and Analytics, Revenue Cycle Management at Brightree Services. “Part of that struggle is just access to data and looking at data the right way. If you are still putting it in Excel line item by line item, it’s not going to work.“

If you’re running business software you’re happy with, your software provider is a good place to start looking for billing services. Companies like Brightree, Bonafide and WellSky offer billing services as well as software, and their account reps are likely to be most knowledgeable on their softwares’ capabilities. The system you have may do analytical tricks you don’t even know about or know how to use.

If you’re looking for new software, that’s also a good time to consider contracting billing assistance. Many software providers unapologetically offer business services only to clients running their software.

“We exclusively work within the Brightree system. We believe we bring a level of expertise in the Brightree system that is difficult to compete with,” Krishnan says.

Likewise, “We prefer to work with our software, because there is no other method that makes it so easy for DME providers to see inside the billing process and understand exactly what is going on,” says Tohill. Bonafide provides its software with a minimum level of monthly billed revenue services, a setup that might be attractive for a DME who’s still using paper records or is looking for a change in business software. “We work with new clients to ensure the transition (if necessary) is smooth and minimally disruptive,” Tohill adds.

There are exceptions, but the billing software providers’ ultimate goal often is to get you on board with their software. “We feel strongly that there should be a number of doors where people come into our products and services, that another way that we can demonstrate value to the marketplace is by helping them with the revenue cycle,” says Tim Ashe, WellSky Chief Clinical Officer and Fazzi president. “Over time we strongly believe our software applications and solutions are best-in-class, so there is an opportunity to benefit from services and technology.”

That said, WellSky tries to accommodate as much or as little as a client needs: “There is some real benefit to having an outside set of eyes looking at the revenue cycle picture,” Ashe says. “Even if they don’t want to outsource or aren’t in need of outsourcing, there’s a lot of opportunity to create efficiencies and improve cash flow by seeking some expertise from someone like WellSky.”

Whether independent or software-aligned, billing services also range from full-service shops that manage all of your revenue from authorizations to payments, to more specialized niche providers that focus exclusively on third-party payers, overdue accounts or patient collections. For large clients, some even offer call center services.

RX 1: REVENUE CYCLE MANAGEMENT

Not surprisingly, full-service billing services recommend outsourcing when your business is healthy, not just when you’re feeling pain. There’s a strong argument for that: much like law, billing takes specialized expertise that may be difficult to find, train, support or retain on a small DME staff.

Think of Revenue Cycle Management (RCM) as the balm you rub into your business’ joints every day to keep it moving. You contract with a service that will manage just about every aspect of your billing and payments. It’s a continuous treatment that keeps your business healthy by monitoring and managing critical indicators.

“To ensure cash flow and ongoing profitability, DME providers must have consistent, high levels of reimbursement. This only happens when the billing team is submitting claims in a timely manner, following up on every claim, minimizing claim denials, and never forgetting about a claim, Tohill says. “This is where we excel. Our service, coupled with our software, makes it possible for DME providers to maximize their reimbursement revenue.”

A company that takes over your RCM will want to be involved in billing from the get-go. Early in your relationship they might have to do some cleanup on past-dues, but the goal is always to keep claims squeaky clean and current. That will probably mean changing a few of the front-end processes. The sooner that starts, the faster you’ll see improvements.

RX 2: THIRD-PARTY ACCOUNTS RECEIVABLE

If you’re comfortable with the day-to-day operation of your business but need someone else to chase down unpaid or denied claims, there are services that specialize in A/R from third-party payers. Their services are like having an in-house claims manager to manage Medicare and insurance billing and follow up on denials and documentation.

“We outsource DME processes. There’s about 30 different processes, they run the gamut from working the A/R, working denials, posting the cash, processing new orders, working the front-end denials,” says Graham.

Prochant, which specializes in third-party billing, also extends advice to front office processes like intake, eligibility and prior authorization. Sorting out what ails your business is likely to expose some office process dysfunction that’s gumming up the works downstream. Working with a billing provider can force you to establish or formalize processes that may seem like a mystery today.

The general theory of RCM is doing everything right from the beginning. One common problem for DMEs is tasks that get set aside for the mythical light afternoon, creating an endless pile of overdue receivables and denied claims.

“There is a new thing we are seeing lately with one insurer we’re working with: They switch up the denial. They are denying for a completely invalid reason. Once you figure out how to fix that denial, they start creating a new denial. Nobody knows what that denial is, even at the insurance company…They’re just trying to delay you getting paid. They won’t offer you any further advice,” Minnich explains. “If you are a small mom-and-pop DME and your biller has 20 jobs she has to do in a day, if she calls and gets that she’ll say, ‘I’ll get back to that later.’ When does she get back to that later? How many claims later are we creating that? What the insurance company is hoping is that you won’t get back to it.”

“A lot of what we come across is companies that do not have finalized escalation procedures. They have processes that never come to conclusion if things don’t go right,” Graham says. He uses the example of a prescription that is out for signature from the doctor, but after several efforts it still never arrives. “The provider throws up their hands and moves on. Nobody ever wants to pull the trigger on making a decision.”

Like Prochant, WellSky and A Perfect Billing Service, many billing services do only public and insurance payer management, so you can choose a service to manage institutional billing but deal with your patients personally.

“We process the payment up to the patient, then the provider handles that. A lot of that is tied to referral sources and we don’t want to make any referral sources mad,” says Minnich. “The patient portion is dealing with a whole different set of rules – you are basically a collection agency. The DME provider has the relationship with the patient. We explain it to the provider and they explain it to the patient.” One encouraging hint she offers for dealing with tardy patient payments: “A lot of times it improves collections 70 percent to 80 percent just calling them.”

If you prefer to have a service do patient collections, services like Allegiance Group focus exclusively on patient pay, others like Brightree Services have divisions that do.

RX 3: PATIENT PAY PAINS

This may be a shock treatment. Maybe you got started in DME in the Golden Commode era, when you could let a patient co-pay slide, but now you have to tell longtime customers to pay up.

‘The whole attitude about ‘don’t worry about the co-pay’ – now the co-pays are what you have to collect because of the high deductibles that are out there,” Gehring says. “Because of the reimbursements, the reality to the provider is the profit that they have in that product is in the patient pay.”

And yet, “Patient pay is probably the last priority on the list of things to do. [DMEs] are looking at ‘if I don’t get paid by the insurer, there’s no business.’ So they are focused on payers and contracts and submitting claims, getting all that done so they can get the 80 percent covered, then worry about the patient pay,” Gehring says.

It’s often a difficult conversation, but one your billing service can help with. “They’ve got to be able to help the patient almost from a financial planning standpoint.” Gehring notes. “People understand that if providers are not getting paid for the equipment or service they are providing…they will go out of business.”

RECOVERY TIME

At the beginning, you will have to invest a little time and effort into finding the right billing provider, getting them access to your records and transitioning your system and work flows. Often that means a flurry of activity the beginning, a break, then another flurry of activity taking the new system live.

Most billing services can be up and running within 60 days of starting your contract, and often the startup time is significantly less. Like everything else, it will depend on the services you choose and how your software conforms to the billing provider. You’ll probably have to update a few processes, but in general the new procedures will save time and hassles in the long run. Your business will get more efficient and have more current and predictable revenue flow.

COST OF TREATMENT

One thing most outsourced billing services have in common: They don’t get paid until you get paid. Most work for a percentage of money collected. “It’s a win-win because the DME has fewer past-due invoices and improved cash flow from a system that incentivizes resolving issues,” says Graham.

There are lots of variations depending on the services contracted. Some services charge a small up-front fee (often delayed until the first service billing), and others offer a flat fee per invoice collected. The fees will depend on whether the services are for current or overdue accounts, the payment source and how long payments have been outstanding.

“If it goes over 90 days, the likelihood of it getting collection is about 40 percent,” says Gehring. That alone should be enough to make any DME with past-due accounts consider getting some help, before billing problems become terminal.

This article originally appeared in the October 2019 issue of HME Business.