Topics: Practice Management, Medical Billing Company
Do you dedicate resources to analyzing payment accuracy? Plenty of practices don’t—and are putting too much faith in payers to reimburse in full on every claim they complete, and this good faith can lead to financial losses.
Simply assuming payer accuracy is a recipe for a warped revenue cycle. Underpayments are more common than you think and it’s easy for denials to slip through the cracks when you lack a strategy for analyzing claims at large. If you don’t spot a problem in your reimbursements early on, it may recur unnecessarily—leading to excess losses.
A few extra measures taken on by the staff in your medical practice can go a long way to enhancing your revenue cycle performance and staying profitable in the long run. Check out our tips below, or consider partnering with a trusted medical billing service for a more robust—and reliable—approach.
- What Are Payer Reimbursements?
- Why Is This Financial KPI Important?
- Best Practices for Analyzing Payer Reimbursements
What Are Payer Reimbursements?
Payer reimbursements are how medical practices stay in business—after providing quality care to patients, the medical coding and billing process takes place so that the patient, insurance company, or government program can pay for the services after they’ve been rendered.
Choosing to bypass insurance companies or programs like Medicare means that the practice simply bills the patient and the patient acts as the payer. This works for some practices, but overall the pool of potential patients to treat significantly decreases. On the other hand, caring for patients with insurance or who are covered by Medicare means having to navigate mountains of regulations, billing processes, and more.
Why Is This Financial KPI Important?
Regardless of which system you choose to operate under, tracking your payer reimbursement performance is critical for ensuring your practice’s financial success. This financial KPI, or key performance indicator, establishes a baseline for where your practice currently stands so that you and your team can develop goals for the future. Monitoring a variety of KPIs at your practice demonstrates a commitment to operational excellence and can help you determine where the points of improvement are within your practice.
Best Practices for Analyzing Payer Reimbursements
If you need to evaluate your medical practice’s payer reimbursements, start with these best practices:
Assess Trends by Code
Take a look at your practice’s top 10 codes by volume per payer per month for the last six months. Ask yourself a few questions when examining this information, like:
- Compared to your payer contracts, are the reimbursements accurate?
- Which payers are deviating from set rates?
- Are the under or overpayments happening consistently, or sporadically?
- Is a certain provider in your office affected more frequently than another?
Ideally, you won’t find any of these issues; however, when you look at six months of data, any payment gaps should show themselves quickly. Six months is enough of a time period to substantially provide information but not overwhelm your analysis of trends from years past.
If you do see discrepancies in your payer reimbursement trends, then it might be smart tin invest in a contract management software that can automatically detect these patterns and provide performance analytics over time.
Mind the Gaps
Armed with insights into when and where over or underpayments are taking place, you can take steps to resolve the problems. Start by looking for the source: Are you making mistakes internally—for example, by leaving off modifiers or making other coding mistakes? Or are payers going rogue despite your own office’s accuracy?
This issue is especially important to investigate within your practice at the start of every year in January. A common reason for inaccurate reimbursement is fee schedule misalignment: medical practices often lose a lot of money early in the year, when payers have yet to update their systems with new codes and updated relative value units (RVUs).
Leave No Stone Unturned
As the saying goes, knowledge is power; taking the initiative to routinely check in on your payer reimbursements means that you’re not keeping yourself in the dark regarding the financial security of your practice. When optimizing your healthcare revenue cycle management strategy, knowing the current state of your financial performance means that you can work towards your practice’s goals and success.
Whether a problem stems from poor coding, payer miscoordination, or both, your analysis gives you the power to proactively resolve it. And with a closer eye on your contracts, you can spot every inaccurate payment as soon as it happens so that nothing starts piling up and causing a bigger problem.
Build habits based on best practices, such as:
- Invest in scrubbing claims prior to submittal to ensure they’re coded properly and completely
- Keep the lines of communication open with your payer contacts to make sure contractual rates are paid
- In the instance of any underpayment—be it your fault, or the payer’s—follow up, fix the claim, resubmit, and get every dollar you’re owed
Unless you’re applying resources to address reimbursement accuracy, you put your profitability at risk.
Partner with NCG to Streamline Your Revenue Cycle!
Delivering great patient care is, of course, the main priority of your medical practice, but you can’t keep operations running on a clunky revenue cycle.
Whether you’re dealing with inaccurate coding on claims, not filing claims in a prompt manner, trying to stay up to date with new billing regulations and other legislative changes, or something else, the healthcare revenue cycle can be overwhelming and complicated. That’s when partnering with a medical billing firm can play an instrumental role in securing the financial success of your medical practice!
Partner with NCG, a firm with decades of experience and experts who know your specialty inside and out. We’re ready to optimize your revenue cycle so you can focus on what matters most: your patients.