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Have you ever had the feeling that some charges were missing, that it seemed like you’ve seen more patients, deployed more procedures or processed more tests than you’ve billed? It just felt like something was missing, but someone pretty much always explains it away. Well, there may be a good reason why you think that way. Frequently, charges are missing. If you think you saw 3,000 patients last month and only 2,500 of those got billed, there’s a good chance that there are some that are missing. Trust your gut!

Salespeople Need to Trust

If you have an organization that’s large enough to have salespeople driving referrals or business into your practice, they may complain. It’s always hard to retain good salespeople. But if your salespeople aren’t getting paid because they perceive claims are not getting billed, then they’re either going to think you’re incompetent or you’re screwing them. 

So if salespeople are complaining and believe that more claims should be getting processed than are, if they believe a referral is sending more tests or more patients, it might be a good idea to dive into the issue and determine any deficiencies.

Besides, whether the salespeople are canaries in the coal mine or whether they are just complainers, either way it’s worth figuring out because effective salespeople are hard to keep. If you can determine what’s been paid, what’s not been paid, made sure that you’ve covered all your bases, it gives your salespeople confidence in the organization, ensuring that you’re neither incompetent nor screwing them.

We’ve seen this situation before. We had a Vice President of Sales engage our team because a large provider organization felt like a significant portion of the tests were disappearing. We went through a discovery process and then performed a charge reconciliation across two billing companies and two clinical systems. Our findings were astonishing. We uncovered several hundred million dollars worth of unbilled charges.

Are systems to blame?

There is a huge difference between samples that didn’t get billed or didn’t get paid and ones that never even got into the billing system. What we’re discussing here today is the answer to this fundamental question: “Did they ever get into the billing system?” Bad collections can always be an issue, but it’s not a black hole.

The most significant issue we have encountered is claims that never got entered. If they got entered and didn’t get paid or even if they got entered but not billed, at least they exist in the billing system and can receive a follow-up by a collector, a biller, or someone with a similar background. On the other hand, if they don’t ever get entered into the billing system, they simply cease to exist and disappear into the void. You’ll never find the claims.

Unfortunately, we see an enormous number of these because it is extremely common. In fact, it is universal.  Invariably, when you’re trying to figure out, “Is there a problem?” or where the quandary resides, anytime you start investigating, frequently you run into the “he said she said” blame game. Someone else is responsible. Somebody says it’s a system glitch or the reports stink.

Perhaps billing might say, “Nope, we’re billing everything we got,” and clinical responds, “We’re sending everything over that we see.” Everybody says everything’s okay or they are doing everything they can, and yet it still seems like things are sucked into a vacuous wormhole.

When billing processes are siloed

Currently, there’s no framework to solve this, especially if there are multiple systems and even if they interface. If there’s no framework to identify and solve a problem, then blame can fester, and morale suffers.

Everyone says, “It’s not me.” Further, executives feel powerless to implement change because there’s no way to get adequate data or know where to find it. Therefore, you can’t establish the nature or size of the problem. In addition, you can’t assign resources, prioritize processes or anything else to resolve the massive issue.

We used to run a billing company. We’re the founders of Apache Health. I’ll acknowledge there were plenty of times that we screwed up, where we didn’t submit something, we lost something, whatever it might be. There were humans involved in the process, of course.

Again, I’d like to believe we were much more efficient than most organizations out there. I think we were, but there were also times that the client didn’t send information to our team. Both scenarios could happen, and both did happen reasonably often, especially with clients not sending the correct data to us. We needed a process to detect missing samples immediately.

How many claims can you afford to lose?

You might say, “Well, are we making a mountain out of a molehill? Is there anything here because everybody’s saying everything’s just fine?” Well, we’ll give you a statistic to go by, which is the average number of missing claims, meaning they never got entered into a billing system and submitted, is 6%. That’s right — 6%. The best we’ve ever seen is 1.1%. That was where all of the information resided in one system, meaning all the clinical data was in one system. They also billed out of that same system.

On average, the rate doubles when you have a separate billing system from a clinical system. As a result, if you’ve got all the claims in one system and you’re losing two, you’ll lose 4% if you have two systems. Besides, there’s a gross rule of thumb: We rarely see less than 5% missing when we have separate clinical systems and billing systems, even if there is an interface.

You might ask then, “Well, isn’t it better to have a billing system or reside within the clinical system?” Another question we’ve encountered is, “Should we bill out of the billing module from the clinical system or to bill out of the EMR, bill out of the RIS, bill out of the practice management system, bill out of whatever that clinical system is?” In short, “You’re essentially shifting problems.” 

While the best case that we’ve ever observed was that 1.1% where that number of claims was missing, it had never been inserted and submitted. Additionally, the same system had more than 10% of the claims that never got billed. So it didn’t have the missing claims problem, but it had another billing problem: The claims never got submitted and never got paid. It had a horrific rate of payment. It was one of the worst we’d ever seen anywhere in our experience. It was the worst case we’ve ever seen. We can come back to it another time.

The point is, just because you solve one problem, it doesn’t mean you don’t create another problem somewhere else. At a high level, dedicated billing systems are ones where it’s chosen for the billing, not for the clinical or operational capability. They tend to do better in billing operations. Clinical systems tend to be more competent in clinical use. Then, you have the problem of integration, getting the data across, and ensuring the inclusion of all necessary data points.

Final thought

Does it take rocket science to solve this dilemma? No, it isn’t rocket science. Nevertheless, the biggest problem is no one is aware of the magnitude of the problem. Therefore, it doesn’t show up on anyone’s radar because they just went, poof! To this extent, no one knows that there’s a problem, and no one knows that something’s gone.

If you’re interested in learning more, we’ll return with another podcast and provide more details about charge reconciliation soon.


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