Article Advise

submitted: Sep 1st 2008 | by: CarlMaysII | Total views: 1 | Word Count: 518 | |

Any strong medical billing process and medical billing company must compare insurance payments to your contractual allowables and aggressively pursue underpayments. If this is not happening then most likely 5 to 10% of your practice's revenue is being lost.

Any medical billing process must include features that are specifically designed to counteract the actions taken by payers to withhold money from medical practices and facilities. Examples of these features include: comparing claims to payers adjudication rules before submission, calling on submitted claims that have not been denied or paid, posting all payment information - including denials, pursuing underpayments, and using predictive payment estimates in the patient collection process.

This article focuses on just one of the key elements you need from your medical billing service: pursuit of underpayments. Pursuit of underpayments starts with a critical step: comparison of EOBs to your contractual allowables (the payment your payers have agreed to make for each CPT code). You cannot count on payment posters to catch underpayments with their naked eye; the comparison must be automated and systematic. It goes without saying that if you do billing in-house the comparison still should be done.

The reason that comparison to allowables must be automated is because of the clever and systematic manner in which payers typically underpay claims. These underpayment patterns can be difficult to spot, but one of the advantages a Medical Insurance Billing Service has is that it sees payment information and patterns across many clients for many payers. This allows medical claims billing services that regularly and systematically compare payments to contractual allowables to spot patterns that a single practice might miss.

A pattern that is often seen by billing companies is one where a payer will underpay the same codes across multiple providers by the same dollar amount in month one. Then in month two, the payer will resume paying the code correctly and will begin to underpay a different code (or codes) across multiple clients.

These underpayments are not huge (5 to 10 percent) but they add up quickly to big dollars for a medical practice. The combination of switching the codes being underpaid from month-to-month and keeping the underpayment amount "under the radar" can make the underpayments difficult for an individual practice to spot.

The pattern outlined above is why it is critical that a strategy for pursuing underpayments is not based upon payment posters picking up on the underpayments. Most payment posters will notice a large underpayment, but it is too much to expect them to spot a $5 underpayment.

Identifying and pursuing underpayments can yield big returns for a medical practice (the average practice can increase collections by 7%). Therefore, it is imperative that your billing service is aggressively pursuing these underpayments on your behalf.

Spotting the underpayment is only part of the battle, of course, the billing service also needs to have a systemic process in place for pursuing the underpayments. It is critical to pursue event the small underpayment amounts. Once a payer sees that their resources are being tied up readjudicating claims because of a $5.00 underpayment, the underpayments will often cease to happen.

Copyright 2008 by Carl Mays II

About the Author

Carl Mays II, President of ClaimCare Medical Billing Services, has spent the past 15 years enhancing the financial performance of his clients. To read more about what to look for in Medical Insurance Billing Services subscribe to Carl's blog

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