Walking through an HME company, it is easy to see from the outside in. I first get a lay of the land, looking to find the real personality behind the business. The next thing I do is look for inefficiencies in process.
Once I embrace these issues, I then look for ways to improve. By the end, I work within the company's “persona” to find improvements that result in increased profitability. All the while, I try to protect the mission of most companies, which is to serve their community with quality service and remain profitable in this complex and angst- ridden environment.
Following are some of the routine findings I see in the many HME companies I visit, specifically in the area of billing and collections, along with how to make improvements and create efficiencies.
- Paper
What's Happening Now
Some common findings that I see when visiting the billing department (and many other departments, for that matter) typically include huge mounds of paper on every biller's desk. I'm quite sure that there are also plenty of other papers (patient invoices or remittance advices, perhaps) hiding away in desk drawers or boxes under the desk.
Clearly, to wade through the reams of paper requires an overwhelming amount of patience, organizational skill and focus. It is just as easy to lose track of the mounds, and it is even harder to manage them.
- Chatter
The second most prominent finding is chit chat. I often see a lack of urgency among the staff, especially as they talk among themselves, pouring over a particular patient or insurance.
Here's the Fix
While this might seem work-related (and it is, per se), you are paying five people to talk about one specific encounter with one particular patient. Is this really necessary? If so, the question is why? In some cases, it feels good to enter into a conversation with your peers to gain a sense of belonging and to feel like you are intimately involved in the happenings of the business. After all, it is absolutely true that everyone likes and needs to be needed.
- Manual Process
Most everyone likes to check their work and measure their performance. A common approach I see in many HME companies is the pad of paper with the dates, times and number of events performed, whatever those may be.
If the company is more savvy, they might use an Excel spreadsheet to show their performance and progress. It might later be used as a tickler file.
Fine-Tune for Improvement
In the absence of software, the Excel approach is a phenomenal way to track work performance. In many cases, the billing software actually has all of these operational processes available. In every case, you should be able to rely on software to perform these manual functions.
- Skill Level
Since billing is one of those things that needs to happen immediately and is always a pressure-filled task, there is no time to waste performing ancillary functions. Yet, I often see managers and high-skill-level employees performing menial tasks such as filing, copying, etc. This does not leave them time to perform their more analytical jobs, and they often end up behind in billing.
Further, by doing all of the work themselves — menial or analytical — the other less-skilled staff doesn't learn and grow. Rather, when help is needed, the manager will be hard-pressed to find a trained employee to take over. This can be problematic, to say the least.
- Manual Posting
Medicare has accepted auto-posting for many years now. This means that the receivable can be posted directly to your software, and there is no need to intervene manually except for those amounts that do not match the amount expected. Yet, many companies do not take advantage of this feature.
In fact, some Medicaid programs and other payers are starting to implement auto-posting. Spending days posting receipts is time-consuming and is time that could otherwise be spent collecting accounts receivable.
- Accountability
Many providers apportion the billing and collection tasks by payer. A payer-driven approach is suitable for some HME companies. However, within this segregation, there is not much else done to hold staff accountable.
Quite objectively, you should be able to know the results of each biller and collector's performance. This correlates directly to the amount paid on the claims/bills submitted.
However, many billers simply plug away, working alphabetically on each claim, regardless of the dollar amount in question and the time constraints of each payer. With no real sense of urgency, there are some billers and collectors who submit very little money for reimbursement in a week's time. As long as they are working, they have no worries.
Without accountability measures, it's no wonder they feel aimless. If nobody tells them what and how to do their job, they really have no idea what to do first and why.
As you can see, there are a myriad of issues surrounding the billing department that can easily cause dysfunction. On the other hand, with structure and goals, the billing department should be able to flourish and succeed.
- Paperless Office
The first remedy and possibly the most compelling change any HME company can make (from a cost-benefit perspective) is to go from a paper-infested office to a paperless environment. Invariably, this will impact all departments in the company but it will especially help in billing and collections.
Whether a patient calls about a bill or A/R is worked resulting in a resubmitted claim with additional documentation, there is no need to get up from a desk in search of a misplaced patient file. Instead, images of invoices, claims, remittance advices and medical necessity documents are all where they should be: in the patient's file folder on your computer screen.
Further, in many companies, using internal fax servers, they can fax from and to your computer. This is another big initiative that should render you more efficient and improve your overall internal control. If there is only one change you make this year, (if you are not yet paperless), go to a paperless office. It will pay for itself very quickly and the transition should not be overwhelming.
- Cross-Training
Matching skill level with job responsibility is critical, especially in the billing department. Why have your best analytical thinker work on secondary insurance claims?
As well, it is critical for you to train your staff to be multi-dimensional. In other words, have them learn another payer type or another task so that they can pitch in when necessary. It is true in every company I visit that the inevitable illness or vacation sneaks up and you are often left with billing that has to get out. Why put yourself in that position when you have capable staff that should be able to work other tasks?
Easier said than done, it will take a concerted effort to train your billers to perform the work of their peers. Since they are all on the same team, it would behoove you to take the time now (before the moment of desperation arrives) and teach your staff at least one other person's job. In some cases, depending of the size of your organization, you may have to employ a “floater” whose job is to fill in for absentee staff. This is similar to having a permanent substitute teacher.
Finally, work hard to delineate tasks based on the skill level of the staff member. You should know the difference between an administrative person and a high-level thinker, and they should be given their responsibilities accordingly. The result should provide the right job for the right person. Incidentally, this isn't always known when you first hire someone.
- Error Prevention
When your collector works denials, he or she learns why the claim wasn't paid the first time around. It is imperative to gather this information and work to prevent it from recurring. This means that if customer service took an improper intake, for example, they should be taught how to take orders properly.
Use this information to redirect and retrain staff. Not only should you collect your outstanding balances but you should be able to realize more money from first-time claims.
- Denials
When you receive a denial, your first inclination might be to pull the remittance advice (aka EOB) and start working from there. While this would be fine if you only received a denial here or there — if you want to control the reasons for denial and the resolution process — it would be better to work from a denial tracking report.
This means that your software (or outside software) should summarize your denials by reason, dollars, dates, etc. You should then be able to work like reasons together, e.g., same and similar denials.
This should help you expedite the resubmission process. Be certain that you audit the process for effectiveness. How many/what percentage of your resubmitted claims are actually paid?
It is very easy to point and click to resubmit a claim without conducting research, etc. This, however, is meaningless since you are typically denied for a reason. Research and action should be pursued to ensure that you are paid the second time around. Without an audit of this process, you may not know if your staff is pressing “resubmit” or actually working to get the claim paid.
- Auto-Posting
While this may not seem like a high priority, if you are able to auto-post your receivables, you free up an employee or department to perform other functions. The result might be increased collection opportunities, for example.
As technology continues to advance, so should software capabilities. In the next year or two, auto-posting should become more prevalent among third-party payers, and you should absolutely take advantage of it. Work with your software vendor and payers to meet these needs.
Remember that the software must work to save you time, not cost you time. If it is not ready, don't use it. On the other hand, work to get auto-posting for all of your large payers, and you should save time and gain efficiency.
- Accountability
If you work with your staff to develop core objectives, you should be able to reach achievable goals and, most important, your employees should feel a sense of ownership in their accomplishments.
For example, if you establish that you should collect 85 percent of your billed claims the first time around within a certain period of time (30-day lag time for instance), you should then be able to measure against this goal. Track their progress at least monthly, and meet with each employee to determine if they were able to meet this goal or what percentage of the goal they were able to meet.
This type of concrete measurement will give them structure and opportunity to succeed. If they are collecting old outstanding balances, you should be able to measure by number of claims and dollars resolved and potential for collectibility. Make sure they know to work on high dollar invoices/patients first, bearing in mind that some payers have statutes of limitations that may cause them to work on specific claims before running into timely filing (or refiling) deadlines. Work with the staff to determine goals such as percentage of A/R over 120 days, and then meet regularly to help them reach these goals. After all, success breeds success.
It is far easier to find deficiencies in an organization if you do not work there day after day. Additionally, it is also easy to find imbalance in workload and skill level. It is much harder to be on the inside of an organization looking for ways to improve when you are bogged down in the minutia, working tirelessly on micro matters.
I encourage you to take a look at your billing department from the outside in and attempt to fine-tune processes for maximum improvement. Employ people who are right for the job, eliminate manual functions, become paperless, train towards prevention and hold staff accountable. With these initiatives, you should be able to see a marked difference in the way your operations runs and, optimally, in the amount of money you collect.
After all, in this environment, status quo is certainly not enough! Continue to raise the bar, and you should find that the more you achieve, the more success you will find.
Miriam Lieber is president of Lieber Consulting, Sherman Oaks, Calif., specializing in operations management and reimbursement for the HME industry. She can be reached at 818/789-0670 or by e-mail at miriam@lieberconsulting.com.
