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This is part two of the quantification of charge reconciliation. In the previous podcast, one of the things we’d mentioned was the original concept behind charge reconciliation, which is to capture charges that essentially got lost and didn’t get entered into a billing system, and, therefore, could never be submitted, followed up on, and so on.
How organizations execute charge reconciliation
Many good billing companies perform charge reconciliation between their billing system and the client’s electronic medical record system, or radiology information system, or whatever the clinical system is that the client of the billing company is using. Again, that may or may not work well, depending upon the organization and how sophisticated they are.
The critical factor that I think most people aren’t focused on automating that process is, “How much labor does that take?” Doing that type of charge reconciliation is pretty complex. It requires a reasonably high-level analytical person. Further, most billing companies don’t have that person in their organization at all. If they do, then it sucks up a relatively large amount of time. Therefore, it’s costly to perform that function even if that person is in India. Why? Well, because not only is there a direct cost, but there’s an opportunity to cost that person’s time.
Time is of the essence
We have a billing company client, and they had given us a quantification of how much time it was saving one of their high-level managers in their organization when we implemented this automated charge reconciliation application, “Charge Recon,” for them. The answer is, drumroll! 8 to 10 hours per week. I could repeat that. For instance, that’s per week in labor saved. That’s like 35 hours per month of work saved.
I want to clarify that it’s for a single client of theirs. That’s for a single provider for that billing company because, in stage one, we just rolled it out for one of their clients. And so, if you extrapolate that across the entire billing company with dozens or hundreds of clients (and this is a pretty decent-sized billing company), the benefit is quite massive.
Mitigate the complexity
If you’re thinking about automating this yourself, consider this. One, it is much more complex than you could imagine. We’re happy to get you in touch with this billing company to have that conversation to find out why it is so complicated and challenging. Part of that, of course, is some of the things we’ve talked about in other podcasts. It’s not just complex from a calculation or an analysis standpoint. It’s problematic from a process standpoint.
Not only do you have to understand medical billing quite well, and software, and analytics, and so on, but you also really have to have the functional requirements capability to be able to extract the information from crucial resources and transform that into sets of rules. That’s very, very hard.
We tend not to see that very often in billing companies. Even billing companies that have hundreds of employees don’t have that capability to do that conditional logic to say, “Okay, this is what we’re doing as the organization. Now, how do we transform this into rules that then can be handed off to a software developer or someone like ourselves, who can then implement that solution?” Therefore, the output doesn’t work particularly well.
We’ve been through that process. Contact us if you’d like help.
Manage charge recon effectively
The other thing is, given the fact that there are massive economies of scale to creating this type of thing, and we’ve already developed it, implemented it, and deployed it to clients, we essentially can do it cheaper than you could do it yourself. We’ve already built it. There are economies of scale. We don’t need to charge the entire development cost for each subsequent implementation. We charge dramatically less than that.
Effectively, you’d be getting something below cost, and you can’t beat that. And that’s assuming you can even build it as well as we have and go through that giant learning curve of implementing this across many different clients and many other clinical and billing systems. Contact us if you want to get our charge reconciliation application. Or, by the way, build it yourself and try to go through all the learning curve pain we did. If you get stuck, then contact us. We’ll come in and save it rather than just reinventing the wheel and doing it all over again.
I hope you guys are manually doing this charge reconciliation in Excel because if somebody is not doing charge reconciliation or a provider is listening to this. Your billing company is not doing charge reconciliation for you. You’re just losing a ton of money. Those claims are not getting captured and are going out the door. So you’re essentially choosing between a bad option, which is a lot of cost in doing that charge reconciliation and much labor. It is pretty complex and a much worse alternative, which is significant amounts of money being lost.
That’s the quantification of charge reconciliation. We estimate that it’s in the range of about 35 hours per month of a high-level analytical resource to do charge reconciliation between a single provider and a billing system.