Healthcare Insurers generate a lot of paperwork, mainly in the form of EOB’s (explanation of benefits). The EOB’s can be easily disregarded and put in the “to do list” or better yet, forwarded in one big pile to your off-site billing company. “Let them deal with it.” Physicians have a lot more important things to do than to waste time going through paperwork.
But let’s take a serious look at what these EOB’s are telling us:
1). The name of the patients, the dates of the office visits and the total amount remitted for each visit on the EOB
2). The CPT billing codes for the office visits covered by the EOB.
3). The contracted reimbursement rate for each CPT code.
4). The patient responsibilities for payment for the office visit, either through deductibles, non-covered billing codes, co-insurances, lack of out of network benefits, or out of enforcement insurance policies.
The goal for every practice should be to collect 100% of the allowed contracted rate for every CPT code for every visit from every patient that the provider has seen within 30 days of the office visit.
What is the reality of how your practice is billing and collecting?
From the EOB, compare the billing for each of your providers for each patient office visit. Are providers billing the correct and maximum allowable amount for each visit? If your practice offers ancillary services, are all providers within the practice correctly utilizing the services to both the patients’ and practice’s benefit?
Was your staff aware of the patient’s co-pay, co-insurance, and deductible when insurance verification was performed? Did the patient provide the front office with a copy of his or her current insurance card, which matched the insurance information on file? Was information regarding patient past due balances given to the patient at the time of appointment, with payment arrangements being made prior to appointment and were those payment arrangements followed up by front office staff?
What was the billing date, compared to the office visit date, and funds collected date? If the time between the office visit and the collected date is over 45 days, what were the reasons for the delays in either billing or payment?
From your billing company or your billing department, generate a report that details the one year historical collection rate per CPT code for each insurance carrier, compared to the contracted reimbursement rate per CPT code. If there is a difference between what is billed, the allowable contracted rate and what is actually collected, what are the reasons for the discrepancies?
If providers have accurate answers to all of the above questions, then they are a leg up of almost every other independent medical practice in the country. The importance of understanding the key performance indicators of your medical practice and how operational efficiencies increase cash flow substantially is an undisputed first step to the ongoing financial health of your medical practice.
An Explanation: How EOB’s are a report card for your Medical Practice