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Tip of the week: Select a billing service for your hospitalist group

Hospitalist Leadership Connection, July 20, 2011

Billing for a medical practice requires the collection and submission of many specific items in a format that insurers will accept and subsequently pay. In the current state of medical billing, a billing service should provide billing and remittance electronically. Electronic billing is simply a method through secure processes of e-mailing bills to the payers.

The Centers for Medicare & Medicaid Services (CMS) and other payers require a specific format for submitting claims electronically. To provide electronic billing and remittance requires information system capabilities that may not be financially feasible for some programs.

Outsourcing your billing services is often an appropriate alternative. When submitting a claim to an insurer or payer, you must often complete a CMS 1500 form. This form has 33 required entries that must be completed prior to a payer processing a claim. A missing entry will usually result in a rejection from the payer, with the bill returned unpaid. The claim must then be corrected to be resubmitted, which delays receipt of the payment. The most successful billing services are able to submit “clean” claims that are promptly paid without being returned. This is the result of having trained and experience personnel as well as modern information systems. Specialized software programs have been developed to evaluate claims for completeness before submission, a process known as scrubbing. Incomplete claims are identified, completed, and then submitted.

The consequences of this scrubbing process are fewer rejected claims and increased cash flow for the practice. For example, CMS will process correctly submitted electronic claims in 10 to 14 days. A medical practice is very sensitive to variations in cash, and electronic billing helps to manage such variations. When billing CMS electronically, one can query CMS as to the status of claims on a daily basis if desired. This feature allows a billing operation to forecast cash availability.

Receiving remittance electronically is a process whereby the payer—for example, CMS—electronically deposits payments in a bank and electronically provides a remittance advise (the explanation and details of the payments received). Most billing services recommend this approach for its speed and convenience. If the hospitalist practice must challenge a payment, it would follow the same process for disputing a payment made using a printed check.

This week’s tip is from The Hospitalist Program Management Guide, Second Edition.
 

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