Medical Accounting: Reducing The Costs of Getting Paid For Healthcare

Medical Accounting: Reducing The Costs of Getting Paid 2015

In the United States, healthcare costs are rising at a rate significantly higher than general inflation, and have been doing so for many years. Pressure to cut costs doesn't just exist in one place.

Medical Accounting: Reducing The Costs of Getting Paid For Healthcare 

High healthcare costs put the squeeze on everyone.

As individuals take on more of the costs of healthcare out of pocket, that puts pressure on providers to keep costs down. At the same time, government payers like Medicare and Medicaid can result in negative margins for hospital services.

Medical accounting practices by healthcare providers can be a major determinant of how sustainable a medical practice is. Not only must physicians concern themselves with patient care, they must also pay close attention to the medical accounting side of their business.

Determine Your Current Status

The first step toward identifying and solving medical accounting issues is to assess your current status, including your cost structure and how every organizational department performs in terms of cost and quality. For many facilities, the source of this information is an enterprise data warehouse (EDW) that aggregates clinical and financial data as well as patient satisfaction. It may not be easy reading, but it can provide valuable insight to problems and how to address them.

The success of today's healthcare facility often depends on its willingness to collaborate with payers, perhaps in ways not considered before. Facilities must identify and eliminate waste and operate efficiently based on understanding of the connections between clinical quality and costs of operations.

Avoid Common Mistakes That Leave Money on the Table

Medical accounting mistakes and oversights can leave significant money on the table. Here are some of the more common mistakes facilities make. Fortunately, addressing many of them is straightforward.

• Inaccurate patient information: Patient data may be inaccurate due to insurance changes, data entry errors, or contact information changes. A bill sent to the wrong address, for example, can cause costs to add up quickly if patient data goes uncorrected.
• Billing errors: Up to 80% of medical bills are believed to contain errors. Even a tiny mistake can result in claim rejection, and much time is wasted in correcting and resubmitting claims. This prolongs the revenue cycle and increases costs.
• Inadequate insurance verification: The importance of verifying patient insurance information at the point of service cannot be overstated. Insurance verification software should allow easy edits when inaccuracies are discovered.
• Medical necessity issues: More than half of denials by recovery audit contractors have to do with medical necessity problems. Facilities have to justify medical necessity of each service to avoid these denials.
• Small balance write-offs: Small balances that are not followed up can add up to significant lost revenue. Furthermore, the cost of outsourcing this type of collection can be prohibitive. It's essential to pursue all small balances owed.
• Insufficient up-front collections: Today there are medical accounting tools to help practices determine fair amounts to collect up front. Registrars should have systems that help them determine correct up-front payments and collect them from patients.
• Not paying attention to new rules and regulations: Rules from insurers and the government change frequently, and when medical accounting staff don't keep up, error rates increase and less money may be collected. 

Learn about common medical accounting mistakes so you can avoid them.

Take Steps to Control Costs Related to Billing

To control billing costs, healthcare facilities need to take steps related to medical accounting practices. For one, they should ensure that staffing levels are optimized. Overstaffing is wasteful, particularly when other practice areas go understaffed. Understaffing leads to increased errors, falling behind on collections, and excessive prolonging of the revenue cycle.

Medical accounting leaders and facility executives should also consider the costs of upgrades and customization when bringing in new technology. This is especially important for facilities that integrate with clearinghouses. Software and hardware maintenance are also important costs that must be taken into account, because failure of either can be very expensive.

Automation should be incorporated into medical accounting processes wherever possible. This can prevent errors and speed processing of bills and claims. When claims aren't submitted on time, money is lost. Investing in automation can provide a positive return on investment simply by keeping billing staff from falling behind and missing submission deadlines.

Conclusion

Sound medical accounting practices are more critical than ever in an era of squeezed margins and increasing costs. At Expeditive, we help facilities just like yours identify and address problems with all phases of the healthcare revenue cycle. All our professionals have at least 10 years of experience, so no time is wasted getting people up to speed. To learn more about how Expeditive can help you solve medical accounting issues, please contact us at any time. We look forward to hearing from you and answering your questions.