Does My Practice Need a Medical Billing Company
…or a Revenue Cycle Management Company?
And what’s the difference?
Medical billing is a highly competitive industry. Legend has it that a couple of decades ago, in an effort to distinguish themselves from the pack, certain billing companies instead rebranded themselves “Revenue Cycle Management (RCM) Companies.” It made for a good sales pitch and the legend lingers on. The implication is that “RCMs” can work through the entire accounts receivable, while a plain old “medical billing company” handles…well, “just billing” (which sounds like much less).
Both versions offer medical billing services so does it matter which you select?
It definitely matters. Labels aside, there are distinct differences among companies in competence, business philosophy, technology, ethics – and results! It’s also important to review the “beyond billing” scope of the services offered, since that varies too.
Setting Revenue Cycle Expectations
Regardless of how they brand themselves, what should distinguish one company from its (RCM or billing company) competitors?
1. Verified charge capture.
For years, radiologists have questioned whether all the services they provide in hospitals are actually billed out, and the suspicion of revenue loss due to dropped charges is still not uncommon. It’s an excellent question, and they’re correct in the assumption money is left on the table due to unbilled charges—it just varies as to how much.
Modern billing systems match demographic files to radiology reports, providing a level of resolution—but what about the charges that never make it to the billing system for some reason? Unearthing these “lost” charges means comparing billing system data to hospital logs – and that is not a standard practice.
This additional data sweep routinely identifies billable charges and can mean up to double digit percentages of additional revenue – but it also costs more, which is why many companies omit this from the billing services provided.
2. Clean claims processes.
Additional steps are also needed to ensure the submission of clean claims. Hospital data is often inaccurate, and in the past claims with missing or incorrect information were usually filed, rejected, manually researched, corrected and resubmitted before being paid. You want to make sure your billing service offers “data scrubs” at the billing software and clearinghouse levels to reduce rejections and maximize prompt payment. Clean claims noticeably improve cash flow.
3. Productive A/R follow-up.
For a myriad of reasons, not everything gets paid by the insurance companies on the first pass. There may be problems with the accuracy of data submitted (even following robust scrubs), or payors may deny them just because they can. A professional RCM team will actively follow up to determine the reason for the failure, correct it, and resubmit payable claims. Or denials may occur due to a medical policy reason and the claim shifts to patient responsibility.
A billing company relying solely on technology to automatically resubmit denied claims will often fail to resolve the underlying problem, resulting in similar denials and successive failures. In the past, the audit of a well-known billing company revealed a pattern of failed automated resubmissions, with an otherwise payable claim resubmitted seven times and eventually written off. This was not an isolated incident but a recurring process failure for this company, involving hundreds of thousands of dollars in lost revenue for the client practice. Everyone will promise strong accounts receivable follow-up but the quality of the effort varies widely.
4. Client support
For many years, the leading RCM companies invested in highly competent client support staff to guide practices through the choppy waters of healthcare as a business. This client support took the form of a professional level person available to the client practice for problem resolution, planning, and information exchange. The client service person was further supported by colleagues with specific expertise to address a wide range of issues, from responding to a sticky compliance situation to providing feedback regarding industry developments.
As billing companies face more competition and tight margins there is a growing trend to reduce these client services.
Never assume! Ask about the qualifications and experience of your client support team.
5. Value-based payment mechanisms.
Overall, radiologists have probably been too successful in achieving positive results under Medicare’s Merit-based Incentive Payment System (MIPS). Consequently, many radiology measures have been retired, meaning it is increasingly difficult for radiology groups to avoid the growing financial penalties under the MIPS program. However, practices reporting MIPS using a Qualified Clinical Data Registry (QCDR) – rather than a Qualified Registry (QR) – have access to new MIPS measures developed by QCDRs and approved by the Centers for Medicare and Medicaid Services (CMS). MIPS expertise has become a value-added service with a financial impact that makes it a critical part of managing the accounts receivable.
It’s imperative to verify the depth of MIPS services offered by your billing company, which must go beyond merely a “Yes, we submit data” response to a program of meaningful feedback and MIPS strategic planning.
6. Business intelligence (BI).
Business intelligence (BI) has become a catch phrase that has too often translated to “We give you good reporting” (not to diminish good reporting, which is also essential). However, as we dive deeper into the chasm of doing more with less, the need for meaningful, actionable analytics increases. For example, the group hiring a new physician because “We’re all really busy” can make better decisions with comprehensive, data-driven analysis of workloads based on multiple criteria and backed by experts in both radiology and data analysis.
Will you receive good reports, or true business intelligence?
True revenue cycle management requires organizational depth and intelligent involvement in all aspects of the practice workflow. It means hiring and developing the right people and matching them with leading technology. It means a commitment to excellent performance and a program of continuous improvement. And it means understanding how trends just poking their heads over the horizon today are likely to impact revenue in the next year or two—and then preparing for that impact.
Whether branding themselves as billing company or full-fledged revenue cycle management organization, you need to establish a relationship with the one you trust to manage your revenue “beyond billing.”
FACMPE, CRA, FRBMA
Prior to joining MSN Healthcare Solutions as Director of Education and Corporate Communications, Pat Kroken had nearly 30 years of experience in radiology management as both a practice manager and consultant to radiology groups, billing companies, software vendors and hospital radiology departments.
Pat has had more than 200 articles published, is a regular contributor to the Radiology Business Management Association (RBMA) Bulletin and a frequent speaker on practice management topics. She served two terms as President of the RBMA, is Editorial Advisor for the national RBMA publication, The Bulletin, and represented the “business side of radiology” as RBMA Liaison to the Radiological Society of North America (RSNA) Associated Sciences Consortium for 7 years.