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Chasing dollars on your behalf

October 31, 2011
by Nick Zubko, Associate Editor
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Partnering with third-party billing services has allowed some organizations to put their clinical staff to better use

Does your organization have an actual billing department? Or are a few members of your staff simply doing their best to handle the task, despite not having the time, knowledge, or expertise to do it efficiently or with much success? 

Whatever the case, many behavioral health organizations have come to the conclusion that the billing process “strays too far from their core competencies,” notes Joe Viger, vice president of business development for Echo Group.

“It can be really complex,” says Viger. “So it often becomes preferable for an outside group to spend all day creating bills and chasing dollars on their behalf.” As a result, more agencies are turning to third-party billing companies for help.

These services offer a deep knowledge base about payers, payer requirements and clinical necessities-information most treatment centers cannot easily access, according to Zarina Delmarr, president and founder of Florida-based Medivance Billing Service, Inc.

“Billing companies have industry-wide information that can assist you, instead of limiting you to changes within one industry specific to your facility-whether it's billing, insurance or managed care,” Delmarr explains. “You're not limited to your own information.”

Problems inherent in “DIY” billing

Without adequate staff or expertise, the time it takes a mental health or substance abuse treatment facility to be reimbursed climbs dramatically. In some cases, what should be a 60- to 90-day reimbursement cycle can reach six months or more.

“The majority of treatment facilities in this economy simply don't have the ability to wait that long to be reimbursed by the insurance companies,” notes Kenneth Gray, president of California-based A-Fordable Billing Solutions. “That's resulted in quite a few facilities opting to no longer accept insurance.”

An organization's clinical staff is often responsible for collecting insurance information, entering charges into the system, and getting the claims billed out the door. But if a claim comes back and it has been denied, few organizations have the staffing to follow up. So, Gray says the clinical staff ends up picking up the slack.

“Instead of handling clients in clinical care, clinicians are spending a large portion of their days on the phone with insurance companies trying to authorize coverage,” he explains. “It takes away from the quality of care that clients are receiving.”

Of course, clinicians aren't expected to have the expertise to handle these claims. Medical billers are sometimes brought on staff, but they often lack experience with the procedure codes exclusive to behavioral health. And even with dedicated staff, turnover is high in the field and agencies are reluctant to invest the time and resources to hire and train new personnel.

“You really do need a working knowledge of both insurance and behavioral health in order to defend charges and justify them to the payers,” explains Delmarr. “For example, if you know exactly what a day of partial hospitalization entails, you're going to be able to justify being paid more.”

Facilities that run their own billing process also tend to have a more difficult time staying ahead of changes in payer requirements and other industry trends. They are often forced to “wait until it happens to them,” notes Delmarr. And, not all are prepared to handle “it” when the time comes.

“Without a network, you're one treatment center among thousands nationwide,” she explains. “Third-party providers have access to all that information and know, nationally, when changes are coming based on each payer, and how to make sure you're prepared.”

Learning how to “let go”

There are three primary reasons why behavioral health organizations engage third-party billing services, says Julie Plourde, manager of the transactions management billing department for the Echo Group: high receivables, high denial rates, and low cash.

“[Organizations] want someone who can work through all that and help them identify the patterns of why they have so many denials,” says Plourde. “Typically, they don't have sufficient staff to focus on those tasks. That is where things can get out of control.”

Third-party billing services can offer agencies a means of re-establishing control over their billing processes. But clients usually retain a certain “fiduciary responsibility” when it comes to outsourcing due to their status as a non-profit organization.

“Once [an agency] outsources its billing, it doesn't mean they slap their hands together, cut loose from the financing issues, and just let us handle it,” Plourde says. “There's always communication going back and forth. We still need to interact.”

Agency leaders are able to exercise their ongoing fiduciary responsibilities through the “back end” of the billing process. Third-party providers typically offer key agency personnel the ability to access software and run their own reports as part of the service, which allows those individuals to continue to monitor a variety of important metrics as needed.

For example, they can make sure accounts receivable lists are correct, that services being billed are valid, and that their third-party partners are performing as expected. But even with those capabilities, it's still not uncommon for agencies to feel as though they are “losing control” of their financial process.

“Some people do have an issue with letting go of control; they like to know it's in-house and that someone else doesn't control their revenue source,” explains Delmarr. “Really, they just need to understand that they still have control over and access to information. With one e-mail or a phone call, they can know exactly what's going on. And they receive reports that show them.”