Your Practice's Missing Piece

5 Ways Your Medical Practice Can Reduce Billing Errors and Increase Cash Flow

Graphic of Medical Billing Errors

In today’s healthcare industry, medical billing and coding procedures are critical components of the reimbursement cycle. The manner in which each medical claim is coded and submitted for insurance reimbursement will determine whether it is paid quickly, slowly, or – in the worst case – not at all.

For example, consider this staggering statistic: Medical practices commonly report a gross collection rate of 60 percent or less, leaving the physician with just 60 cents for every dollar of services billed.{source}

As a medical billing and coding expert and consultant, I know firsthand the frustrations of medical practice owners, administrators, and billing professionals. In my work with thousands of billing professionals throughout New Hampshire and the U.S., I’ve helped them to generate immediate positive cash flow by teaching them how to identify and correct errors in their medical collections procedures that are costing them valuable time and money.

Sue Whitney, Senior Content Manager and resident coding expert for Medical Group Management Agency (MGMA) explains, “Good coding is the foundation of a financially healthy practice. If your practice suffers from bad coding practices, it can cost money or put your practice at significant risk.” {source}

In this article, I explain 5 of the most common – and costly – billing errors that hinder on-time collections for New Hampshire or U.S.-based medical practices as well as how to identify and prevent them.

How New Hampshire Practices Can Avoid 5 Common Medical Billing Errors, and Collect Faster Payment of Claims:

1.) Know the Insurance Policy Details

Each insurance policy outlines how to bill for a variety of things for reimbursement through claims. For example, if your patient requires a wheelchair, CPAP Machine, or other corrective medical device, it’s vital to know the policy guidelines for proper claim submission. An incorrect claim submission risks slow payment or non-payment, due to the cycle of rejection, appeal and re-submission. (See Tip #2 for more about billing codes and modifiers.)

How to Prevent this Error in Your Medical Practice:

If you do not outsource your medical billing and coding to a third party provider, here are three steps you can take to help ensure that:

  • Key claims compliance points are met
  • Claims are “clean”, and paid on the first submission
  • Costly appeals are avoided

Step 1: Research each insurance policy before making a claim
Each insurance provider and policy is unique, so it’s critical to review key details before making a claim. 

Step 2: Appoint a member of your team to research policy changes
Depending on the size of your practice, a consistent research process can take approximately 4-6 hours per week. Medicare typically offers free webinars to help your staff educate themselves on current claims processes.

Step 3: Maintain weekly research, and implement policy changes
To keep up with policy changes, ensure that your practice has signed up for List-Serve communications, or quick-links within your contracts.

Third party providers, such as CBS Medical Billing and Consulting, LLC, employ dedicated team members who serve as Medicare liaisons, working daily to keep up with changes as they happen. These team members meet regularly with all CBS Medical Billing specialists to provide updates regarding changes. For example, Medicare publishes a policy and procedures manual that outlines all the local written regulations. In addition, Medicare produces five other online manuals that outline issues such as program integrity issues, educational updates, and more.

2.) Assign the Correct Billing Code Modifier

Insurance company policies assign a billing code for every medical procedure/service and corrective medical device. In addition to the billing code, a 2-digit modifier is required, such as LT for left side of body, or RT for right side. The modifier KX, for example, is one that DME practices use to indicate to medicate that all required documentation is on file with the service provider.

Billing codes and modifiers should be part of your billing software that a billing specialist uses to submit claims to insurance providers such as Medicare.

How to Prevent this Error in Your Medical Practice:

Since one of the top reasons claims are rejected is simply for lack of a modifier code, it’s critical to research and assign the correct modifier to the billing codes on each claim.

3.) Understand the Prescription Guidelines

It’s vitally important to know and comply with the guidelines for prescription submissions. For example, a compliant prescription claim must include:

  • A valid start date
  • Physician’s signature
  • A valid end date
  • Items delivered (not generic)
  • What’s been expensed to the patient and billed to Medicare

Our CBS Billing Specialists support medical practices throughout New Hampshire and the U.S. by checking each policy, code, and prescription to ensure that the insurance company guidelines are met, and a “clean claim” can be submitted for reimbursement.

How to Prevent this Error in Your Medical Practice:

Clearly state the details of what is being prescribed and why. For example, a scoliosis prescription doesn’t simply require a “brace”, but a “custom brace for idiopathic system” and other patient-specific items.

4.) Update Your Patient Address Records

Another common reason that claims are rejected is incomplete or incorrect information about the address of the patient’s residence. While a patient may be familiar to your office, this doesn’t mean that Medicare has the patient’s current New Hampshire (or other) address on file.

How to Prevent this Error in Your Medical Practice:

Two simple but important ways to prevent incomplete or incorrect patient address information include:

  • Call Medicare’s automated system to check if the patient has an active residence on file
  • Verify the patient’s insurance information before they come into the office for their appointment.
  • Keep in mind that a patient’s residence may change within the space of the time that you verified their insurance information (as in the case of Skilled Nursing Facilities, Hospital in-patients, etc.) so keep your timing of verification close to the appointment as possible

5.) Know the Patient ID Number

Further underlining the importance of attention to detail, a clean claims-submission starts from the beginning, when an administrator must verify and assign the correct patient identification number.

How to Prevent this Error:

Check the insurance policy to ensure the correct patient number is assigned, and then verify that the correct number is used throughout the processing of each claim.

Clean Claims Submission Leads to Healthy Cash Flow for Your Medical Practice

Overall, the key to overcoming unhealthy medical billing and coding practices and increasing cash flow stems from a thorough understanding each insurance policy. When you know the policies, keep up with changes, and submit “clean” claims – whether through your own medical practice billing team, or outsourced to a third-party billing and coding provider – your practice will be more efficient, and maintain greater cash flow.

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About the Author:

A successful educator, trainer, and author, Erin Cammarata is sought by industry professionals and individual clients for her medical practice expertise, consultation and training services. As Founder and Principal of New Hampshire-based CBS Medical Billing and Consulting, LLC, Erin leverages more than 20 years of comprehensive practice management experience to help medical practices throughout New Hampshire and the U.S. to overcome the challenges that inhibit their profitability.