Outsourcing: Should We?

Credit decisions greatly impact and influence revenues, bad debts and bottom lines. In today’s weak economy many or should I say most bank credit departments have tightened the rains on extending credit. Today, this practice is evidenced in fewer mortgages, personal and business loans applications and approvals.

As a result, many banks and related financial institutions are reducing employee levels by offering early retirements and imposing terminations. It is likely that the current economic conditions will continue for several more years. The housing market is still sluggish and it is having a domino effect on all those businesses which comprise the housing industry: masons, carpenters, roofers, window manufacturers, landscapers and many other related small businesses.

These unfortunate, poor economic times are causing many businesses to rethink how better to control and manage billing and collecting departments. Although there are `ebbs and tides’ in our economy, businesses are re-thinking and re-evaluating the cost-effective attraction of outsourcing some and all these related departments to professionals. There are several clear advantages outsourcing offers; one of which is that the client only pays for results. For example, ABC Bank employs a staff of 20 in the collections department and it costs about $500,000 – $600,000 in salaries and benefits. These fixed expenses remain constant regardless of the level of generated collection revenues.

The company which outsources its collections department only pays for results. That is to say, using the same example, ABC Bank contracts a professional outsource company to conduct the same responsibilities produces about the same level of revenues, yet it would cost the bank about half the amount, but all of the headaches.

There are additional benefits that can result from outsourcing: fewer personnel to supervise, better manage reduce payroll and related expenses, develop new products and services, promotion of personnel to more challenging positions and, more importantly, grow the business.

Finally, businesses and banks are and will be accumulating data and taking decisions on the financial benefits of outsourcing certain or all aspects of collections and credit granting processes. The ideal outsource candidate has in-depth personal and business loan credit and collection experience, performs credit approvals utilizing secure web-based credit bureaus and criminal background checks resources. It’s becoming quite clear that businesses which are on the cutting edge of growth and market penetration will dominate tomorrow’s businesses.

Effectively Preventing Unresolved Charges

Working unresolved charges can be very unnerving and, of course, time consuming and labor intensive. Many medical offices are having to deal with numerous unpaid and denied charges because of a variety of reasons such as: cannot identify patient, procedure and diagnosis codes don’t match, patient not eligible on date of service, no authorization for charges and no referral on file. Sound familiar?

Many of these denials can be minimized or avoided only when medical practices institute and follow specific office policies. Let’s examine the policy most practices follow when a patient makes and appointment. The policy should include asking the patient’s name, date of birth, current medical insurance company and amount of co-pay? When the patient arrives for her appointment, front desk personnel should scan member’s card and call for eligibility. Adhering to this policy should help reduce additional administrative time needed to conduct insurance follow-up.

In cases of surgeries, or other procedures which require special medical treatments, it is absolutely essential front desk personal obtain patients complete medical histories, authorizations and, in some cases, letters of medical necessity. Medical personnel need also to make sure that when obtaining authorizations to accurately indicate to insurance companies all diagnosis codes in correct descending order of seriousness and procedure codes. It is also advisable to record name and contact information of the person who either approves or denies authorizations. Strong adherence to this policy should also help minimize insurance charge denials.

Finally, the URS staff has one sure method of controlling and minimizing future costly insurance follow-up campaigns. The staff resolves most of its denied charges when posting payments and calling insurance companies to ascertain reasons for denials and nonpayment’s, then submitting all necessary corrective measures to insurance companies. Those few claims which cannot be resolved during this process are set aside for appropriate handling.  

 

Deciding the Future of Your Practice, Managing Director, Richard L. Tamburello

Let’s assume the following negative financial consequences: increased taxes, more regulations and reporting requirements, rising indirect and direct employment costs and declining reimbursements. 

Introducing: CMS issues proposed rules impacting reimbursements: http://www.healthcarefinancenews.com/news/cms-issues-proposed-rules-impacting-payment-rates

Should one or a combination of any of these financial burdens directly affect your medical practice, it could experience significant declines in cash flow and profitability. These concerns are present in the minds of both physicians and administrators. Many practices, regardless of size, are not sure which course of action to take or how to overcome and deal with these expected additional rising costs and cash outlays. Some practices might close within the next year or two and some physicians might decide to retire early.

What viable alternatives and solutions should medical practices take? The first step is to objectively assess the efficiency of the office. Do any employee’s responsibilities overlap? Are employees maximizing their talents? Is absenteeism a problem?  Are insurance follow-up, payment postings, charge entries and scrubbing accurately and timely conducted? Should your practice display any of these key operation weak points, revenues, profits and cash flow will negatively impact the bottom line.

Lastly, the ideal way to reduce costs and increase revenues is to utilize the medical billing professionals. “The American Medical Association (AMA) reports that an average of $30,000 from a $300,000 practice is spent annually on in-house billing. This amount can effectively be cut in half, when contracting the expertise of a proven billing service. “ source

There are several professional medical billing services which provide cost effective results-driven A/R management solutions. Outsourcing billing operations can be a viable alternative to medical practices seeking increased revenues, timely charge scrubbing, payment posting and effective insurance follow-up.  A highly functional medical billing service will accomplish these objectives and more. One additional key financial component URS Billing Services, LLC delivers to clients is `Increasing the Value of The Practice’.

   

Bad Debt Syndrome by Richard L. Tamburello, Managing Director

Given the unfortunate economic circumstances for millions of Americans, more and more medical practices are finding it increasingly difficult collecting deductibles and self-pay balances.  This situation is not only impacting cash flow for practices, but negatively affecting bottom lines.  According to a recent study published in the American Journal of Medicine, 2007, “Medical bills are the cause of more than 60% of all bankruptcy filings in the United States…” Many patients ask, “Why aren’t insurance plans covering more of the medical expenses”? As a result, medical practices are now dealing with the uncomfortable task of asking patients for payments after treatments and before they can be seen on the following appointments.

URS recommends the following to minimizing bad debt losses and maximizing cash flow:

1. Inform patients of payment policies prior to being treated. Office policies should include a list of accepted credit cards and a credit agreement which is to be signed by patients/guarantors who do not have insurance or high deductibles (HSA).
2. Select patients for collections using these criteria: Minimum of 3 statements and no contact from patients indicating willingness to arrange payment plans; balances > $49.99; mail is returned.
3. Contact with patients should be geared to `motivating’ patients to pay, not via intimidation tactics.
4. Patients with insurances should have their policies (including secondary insurance) validated prior to the office visit date.
5. Surgical practices need to call insurances for eligibility, authorizations based upon Diagnosis codes presented in ascending order.  This should be completed a minimum of 48 hours prior to the scheduled surgery date.

Keep in mind these are some basic procedures by which medical practices can minimize the Bad Debt Syndrome in today’s economy and in the future.

Efficiency = Increases Cash Flow, Bottom Line & Practice Value

Many medical practices find difficulty identifying inefficiencies or implementing corrective actions identified as inefficiencies. Many medical practices fail to establish `Key Financial Indicators’ (KFI’s) or operations benchmarks for such areas as: Average Revenues/Patient Visit, Revenues to Total Procedures, Fluctuations in Procedure Code Levels, Average Days Revenues (ADR), Days Revenue Outstanding (DRO), Days in A/R and Delinquency Tolerance Ratios (DTRs) and tracking amounts allowed and reimbursement levels by ALL contracted insurance payers.

These critical financial measurements are absent in many practices having 7 and fewer physicians. URS Billing Services provides these and much more key data to all of its clients.  The success of today’s medical practice requires pinpointing weaknesses and taking necessary corrective actions. Measure! Evaluate! Take Action!

Key Operation Benchmarks Which Are Monthly Tracked Per Physician:
-    Charges
-    Revenues
-    Adjustments
-    Net Ending A/R including net change from previous month
-    Percent Revenues to Gross Charges
-    Total Patient Visits
-    Average Revenues Per Visit
-    Establish / Measure Delinquency Tolerance Ratios for A/R
-    Establish / Measure Revenue Sources to Total Revenues
-    Establish / Measure ADR Targets
-    Establish / Measure NDRO Targets
-    Establish / Measure Days in A/R
-    Establish / Measure Revenues For Top 15 CPT Codes
-    Establish Solid Relationships With ALL contracted Insurance Providers

Once these Key Operations benchmarks are established, correctly monitored and managed, along with `alert algorithms’, profits and cash flow will begin to rise. Physicians will be able to draw paychecks the same day as employees.
The URS management team’s principle fiduciary responsibilities to ALL of its customers are not only optimizing revenues and controlling costs but increasing the value of the client’s practice.

The URS management team’s principle fiduciary responsibilities to its customers are not only optimizing revenues but increasing the value of our client’s practice.

Sitting Is Killing You

Via: Medical Billing And Coding

How to Increase the Value of Your Practice, by Managing Director, Richard L. Tamburello

Increase the Value of Your Practice

In today’s economy many physicians are fearful of seeing the value of their practices evaporate. Two primary reasons are stagnate and declining insurance reimbursements.  Other reasons include uncertainty with respect to federal tax policies, mandatory insurance coverage, higher employee payroll taxes, etc.  These can all have a direct effect on valuing your medical practice.

If you were to draw two lines on a graph, one showing gross revenues the other employee costs, the two will likely show trends of moving closer or worse, intersecting, hence impacting cash flow, your bottom-line and the value of your practice.  In past years, the area between the two was likely much greater.

Medical practices should consider and evaluate the financial benefits of contracting with a proven medical billing service organization.  This is the best way to effectively manage and control most billing and collection related costs.  URS Billing Services, LLC has the proven method of ensuring the area between revenues and billing costs never intersect, resulting in improvement in cash flow and profitability. URS takes great pride in servicing its clients medical billing needs and making sure financial goals are met each for each reporting period.