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Relying on the experts

October 1, 2008
by Joseph Viger, Karen Milford, and Julie Plourde
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The advantages of technology-assisted contracted billing services

Most behavioral healthcare organizations have spent considerable time and money implementing specialized financial software and developing internal billing departments. This has been a good fit for some, but others are left wondering why they haven't obtained the results they were looking for. This can devolve into a tit for tat between the software vendor and customer, which is unfortunate because such an argument may be missing the real point. Often it just makes more sense to let a specialist take over to create the results a provider is looking for. Contracting with a billing service to expertly create charges, submit bills, and process remittances may be the answer.

Primary care providers already have proven the benefits of this approach. This comment from a primary care customer is typical: “I don't have to deal with patients or insurance company representatives about billing issues. I can focus on providing care and not have extra stress.”

Technology has created a conduit for organizations to take advantage of specialized expertise such as billing services. In fact, many customers are recognizing this approach's benefits as they start telepsychiatry programs. Why not take advantage of a contracted billing expert facilitated by your information system?

This thought may strike fear in the hearts of executives concerned about losing control of their revenue, but it shouldn't. A high level of transparency can be established if the billing service completes its work in your information system through a remote connection. Agency staff can access the information system at any time to understand charges, billings, and remittances. The same reports you use to manage your staff are used to understand the work of your contracted experts. The data your staff enters into the electronic medical record drive the contracted billing staff's work.

Expertise and improved results

Contracting with a billing service can bring your organization unique skills regarding specific types of billing, payer requirements, and process improvement. In many cases this expertise cannot be found locally. Unlike most internal billing departments, billing service staff work billing/remittance processes all day, every day, with no distractions. In addition, the service's payment is based on collections, so naturally the service is looking to maximize your revenue.

Compliance is a parallel priority to revenue. Billing services are accountable to state and federal agencies and standards just like you are. Quality billing services identify concerns related to billing processes by diligently monitoring regulations, error reports, and denials. Performance is analyzed against benchmarks, and the data are communicated back to the customer for quality improvement. We typically see improvements such as:

  • Denial rates decrease 2 to 3%

  • Collection rates increase to 96 to 99% (depending on specialty)

  • Receivables over 90 days drop to less than 20% of total outstanding accounts receivable

One behavioral healthcare organization we work with was challenged with constant staff turnover and insufficient training. Electronic submissions and “best-practice” billing procedures were a struggle. Yet within three months of contracting with the billing service, 835/837 transmissions were implemented along with other process changes. This improved both cash flow and efficiency. The billing service and customer teams meet weekly by phone to discuss issues impacting revenue, such as authorizations, diagnoses, and data-entry problems. These issues often impact clinical care and compliance as well. Management now focuses on enhancing the quality of information and creating improvement plans instead of getting claims out the door.

“Good billing requires expertise in a constantly changing specialty,” notes Glenn Dahlen, vice-president of finance at United Family Services of North Carolina, another customer we work with. “You can do a lot to increase collections but the question remains: Is this a core competency of your staff, or would it be more effective to contract for this expertise?”

Business continuity

Many organizations have significant billing interruptions if a staff person leaves. Inadequate staffing leads to services not being processed, and procedures such as error checking, requirement verification, and reconciliation often are overlooked. This creates liabilities for the organization, which has significant overhead for recruitment, billing procedure training, and software training.

Billing services provide staff redundancy that most organizations can't afford. Contractual terms create stability at your organization, as the service is liable to ensure continuity and quality. Billing services can make an impact quickly, often within 30 days of signing a contract, as the service is using your existing information system and work flow.


Is it right for you?

Here are some tips for assessing if a technology-facilitated contracted billing service is a good fit for your organization. The figure illustrates how a successful arrangement might work.

Evaluate your technical environment. Do you have adequate hardware and bandwidth? Does your system have the proper security configuration, remote access, and required features? If not, can the service vendor offer a solution?