The Mega-Group: Billing & Collections Overcoming the costs & complexities of centralized billing December 3, 2008 Prepared...
Agenda: <ul><li>Introduction </li></ul><ul><li>Goals </li></ul><ul><li>Complexities </li></ul><ul><li>What to measure </li...
Introduction – Centralized billing and collections <ul><li>Forming a group practice of any size requires centralized billi...
What are the goals? <ul><li>Create a transparent, homogeneous  practice management/medical billing and collections infrast...
What does it take? Relative complexity of B&C:   Month 1-2  Month 3  Month 4  Month 5  Month 6  Corporate Organization & M...
What to expect: Complexities <ul><li>The devil is in the details, and certain aspects of managing the group’s billing and ...
What to measure: Billing and collections KPI’s <ul><li>Billing KPI’s: </li></ul><ul><ul><li>Lag between date-of-service an...
Other revenue cycle measurements: <ul><ul><li>Patient Activity </li></ul></ul><ul><ul><ul><li>Appointments per day per doc...
What are our B&C options? <ul><li>It’s time to make a decision! </li></ul><ul><li>How can we ensure the billing is done cl...
Traditional option: In-house software and staff <ul><li>The in-house model seeks to buy every part of the process (softwar...
A better option: Avisena <ul><li>Robust infrastructure, billing and collections expertise and minimal upfront costs let th...
Avisena architecture and “inheritance”
Our Company and Our Commitment to Excellence <ul><li>Avisena provides its clients with proprietary, Internet-based practic...
Addendum: The reconciliation process Doctors   All payments are received at bank lockbox and come in under a single tax I...
Addendum: The bank reconciliation process <ul><li>Over the counter Reconciliation </li></ul><ul><li>Payments received at t...
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Mega Group Billing And Collections

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Overcoming the costs and complexities of centralized billing and collections for a large medical group practice.

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Mega Group Billing And Collections

  1. 1. The Mega-Group: Billing & Collections Overcoming the costs & complexities of centralized billing December 3, 2008 Prepared by: Brian Foster 786-546-5131 [email_address]
  2. 2. Agenda: <ul><li>Introduction </li></ul><ul><li>Goals </li></ul><ul><li>Complexities </li></ul><ul><li>What to measure </li></ul><ul><li>Options for building centralized B&C </li></ul><ul><li>How inheritance should work and why it is important </li></ul><ul><li>Avisena: Our company and our commitment to excellence </li></ul><ul><li>Addendums: Reconciliation </li></ul>
  3. 3. Introduction – Centralized billing and collections <ul><li>Forming a group practice of any size requires centralized billing and collections: All doctors billing under one Tax ID. </li></ul><ul><li>Depending on what choices you make, the costs—one-time, recurring and intangible—can be significant. </li></ul><ul><li>Centralized billing is very complex—The challenges of coding, payment posting, reconciliation and reporting are increase exponentially with each added doctor and care center. </li></ul><ul><li>Group impact: Nothing short of mission-critical. You can do everything else right, but if you can’t get claims out, if you can’t get reimbursements in, if you can’t get the doctors paid appropriately, the venture will fail. Or worse, if you make bad decisions here during the formation, the group will never get off the ground. </li></ul><ul><li>Impact on individual docs: Huge. If the member physicians don’t have faith in the group’s leadership and their ability to create and manage an efficient billing infrastructure, they will leave, new docs won’t join, etc. </li></ul>
  4. 4. What are the goals? <ul><li>Create a transparent, homogeneous practice management/medical billing and collections infrastructure that can be rolled out to all care centers and all doctors quickly and inexpensively. </li></ul><ul><li>The infrastructure should support, not hinder, the group’s growth. </li></ul><ul><li>Manage the ongoing physician revenue cycle: </li></ul><ul><ul><li>Give care centers tools they need to manage patients and data </li></ul></ul><ul><ul><li>Get claims out cleanly and quickly </li></ul></ul><ul><ul><li>Payments posted quickly, completely, accurately </li></ul></ul><ul><ul><li>Collections efforts are aggressive, efficient </li></ul></ul><ul><li>Allow for robust reporting, transparency, accountability </li></ul><ul><li>Guard against errors, payer oversights, theft </li></ul><ul><li>Allow for ongoing feedback and improvement </li></ul><ul><li>Hold all parties accountable: Payers, staff, patients, vendors, and yes, doctors. </li></ul><ul><li>Create a culture of openness, error reduction and continuous improvement that has quality patient care as its core value. </li></ul>
  5. 5. What does it take? Relative complexity of B&C: Month 1-2 Month 3 Month 4 Month 5 Month 6 Corporate Organization & Membership Structure Critical activities Banking Relationship Setup Clinical Operations Finance & Accounting Requirement & Procedures Go Live Asset Protection Strategy & Implementation Human Resources Credentialing (CMS & Private Payers) Billing & Collections / Technology Establishing the group’s billing & collections infrastructure demands time and effort.
  6. 6. What to expect: Complexities <ul><li>The devil is in the details, and certain aspects of managing the group’s billing and collections process will demand more attention: </li></ul><ul><li>Reconciliation (see addendums): Insurance companies only separate payments by tax ID, so the practice management system must be able to trace the path of all charges back to their origin. Payments will come back intermingled, meaning the EOB will have a payment for a doctor X at care center Y right above the payment for doctor A at care center B. </li></ul><ul><li>The importance of “inheritance”: Every charge should carry all information so that when the payment comes back, your system knows exactly which doctor at which care center it belongs to. This is a crucial step and some &quot;in-house&quot; groups in the past have underestimated its complexity. </li></ul><ul><li>Standard reporting: All software has reporting functions. It is critical that all members of a group be on the “same page” – reports must be standardized, regularly generated and reliable. </li></ul><ul><li>Policies and procedures: Everything from how an office visit is coded, to how a patient gets a receipt for a co-pay to how a new doctor is credentialed must be standardized. </li></ul><ul><li>Coding: When you get a group of doctors together, they will most likely have different ideas about which codes to use. This needs to be standardized. </li></ul><ul><li>Service from vendors: With multiple doctors and multiple office managers, you need a local presence to provide dedicated, reliable service to the group as a whole </li></ul><ul><li>Adding ancillaries: Most Mega-Groups decide they want to take advantage of their new size and add ancillary services to generate additional revenues. Proper coding, billing and reconciliation of these revenues is key. </li></ul>
  7. 7. What to measure: Billing and collections KPI’s <ul><li>Billing KPI’s: </li></ul><ul><ul><li>Lag between date-of-service and date billed, sorted by place of service </li></ul></ul><ul><ul><li>Percentage of claims submitted electronically </li></ul></ul><ul><ul><li>Time-of-data-entry, per encounter </li></ul></ul><ul><ul><li>Billed amount and value, per day per doctor </li></ul></ul><ul><ul><li>Charges/new patients entered into PMS per day by person </li></ul></ul><ul><ul><li>Front desk(s): Percentage of claims denied due to coding errors or oversights, authorization/referral, insurance information or eligibility oversights </li></ul></ul><ul><li>Collections KPI’s: </li></ul><ul><ul><li>Days in A/R </li></ul></ul><ul><ul><li>Percentage of claims denied or no-response overall and by payer </li></ul></ul><ul><ul><li>Average life of denials; average life of no-response incidents </li></ul></ul><ul><ul><li>Retail collections per day </li></ul></ul><ul><ul><li>Average time to collect </li></ul></ul><ul><ul><li>Adjudication quality per payer (underpayments) </li></ul></ul><ul><ul><li>Average collection per encounter </li></ul></ul><ul><ul><li>Net percentage collected (relative to contract values, NOT billed amount) </li></ul></ul><ul><ul><li>First Pass Resolution Rate (FPRR): Percentage of claims paid correctly on first submission </li></ul></ul><ul><ul><li>Denials by category (over time, should be due to payer error and/or request for further info, not due to practice mistakes) </li></ul></ul>
  8. 8. Other revenue cycle measurements: <ul><ul><li>Patient Activity </li></ul></ul><ul><ul><ul><li>Appointments per day per doctor; per location </li></ul></ul></ul><ul><ul><ul><li>Cancellations by reason </li></ul></ul></ul><ul><ul><li>Accounts Receivable </li></ul></ul><ul><ul><ul><li>Receivable days overall and by payer </li></ul></ul></ul><ul><ul><ul><li>Payer mix </li></ul></ul></ul><ul><ul><ul><li>Extra effort required to collect by payer </li></ul></ul></ul><ul><ul><li>Collection Effort </li></ul></ul><ul><ul><ul><li>Outstanding denials by reason and aging since denial </li></ul></ul></ul><ul><ul><ul><li>No-Response claims by payer and aging </li></ul></ul></ul><ul><ul><ul><li>Collector productivity by day </li></ul></ul></ul><ul><ul><ul><li>Average time to respond to collection incident and effectiveness </li></ul></ul></ul><ul><ul><li>Marketing </li></ul></ul><ul><ul><ul><li>Appointment/patient/collection activity by campaign </li></ul></ul></ul><ul><ul><ul><li>Return on investment per campaign </li></ul></ul></ul>
  9. 9. What are our B&C options? <ul><li>It’s time to make a decision! </li></ul><ul><li>How can we ensure the billing is done cleanly, on-time, appropriately? </li></ul><ul><li>How can we build an infrastructure that won’t cost us a fortune? </li></ul><ul><li>How can we ensure collections are aggressive, efficient? </li></ul><ul><li>How can we plan for growth and still manage costs? </li></ul>
  10. 10. Traditional option: In-house software and staff <ul><li>The in-house model seeks to buy every part of the process (software, staff etc) in an effort to maintain control. But costs are very high and control is elusive: </li></ul><ul><li>Purchase: Hardware and network, practice management software </li></ul><ul><li>Hire: Billers, collectors, payment posters, billing manager (MGMA est. 1.1 FTEs per doctor) </li></ul><ul><li>Fees and costs: Benefits and taxes, software maintenance (typically 18% to 28% of purchase price), annual software upgrades, IT, clearinghouse, mailing of patient statements, rent for space to house staff </li></ul><ul><li>Liabilities: Staffing, wrongful termination, harassment, etc. </li></ul><ul><li>Escalating costs: Wage inflation, new licenses if group grows/adds locations or providers, rent, continuing education for billing staff </li></ul><ul><li>Intangible costs: Aggravation, staff turnover, lack of outside support without additional costs </li></ul><ul><li>Other factors: Perceived control, manually intensive, poor reporting, no adoption of best practices, no assistance with changing payer rules. </li></ul><ul><li>At this level, the group practice has created a new, separate “company” complete with all the usual costs, complexities and liabilities. </li></ul>
  11. 11. A better option: Avisena <ul><li>Robust infrastructure, billing and collections expertise and minimal upfront costs let the group focus on growth and patient care. </li></ul><ul><li>Internet-based software: Get the infrastructure and technology needed to bill and collect from day one. </li></ul><ul><li>Minimal upfront costs, no license or maintenance fees, no service contracts, no leases. </li></ul><ul><li>Experienced billing and collections service: Work with a company that has specific, documented experience working with physicians in similar circumstances. </li></ul><ul><li>Decreased costs: No need for expensive office space for back-office staff; avoid wage and benefit inflation, turnover, human resource liabilities. </li></ul><ul><li>Architecture built around “inheritance” ensures all monies are properly distributed </li></ul><ul><li>Online access to your data at a practice or group level at all times. </li></ul><ul><li>Robust reporting infrastructure and ensures easy, uncensored access to practice and business analysis; data views for the enterprise, individual practices, physicians etc. </li></ul><ul><li>Staffs operate according to the needs of your individual practices. </li></ul><ul><li>The “Network Effect”: Join hundreds of physicians in a concentrated area, take advantage of strength in numbers. </li></ul><ul><li>Pay for Performance: Only pay fees based on collections – no fixed costs. </li></ul><ul><li>Local presence: Easy access to service and account management; local knowledge of payer rules etc. </li></ul><ul><li>Minimal disruption physicians/individual care centers. </li></ul>
  12. 12. Avisena architecture and “inheritance”
  13. 13. Our Company and Our Commitment to Excellence <ul><li>Avisena provides its clients with proprietary, Internet-based practice management software combined with comprehensive billing and collections services and dedicated local Account Management. </li></ul><ul><li>Corporate headquarters in Miami </li></ul><ul><li>250+ employees </li></ul><ul><li>400+ clients representing 850+ physicians in all specialties </li></ul><ul><li>More than $756 million in client receivables </li></ul><ul><li>Founded May, 2001 </li></ul><ul><li>Multiple corporate awards and endorsements, www.avisena.com </li></ul>
  14. 14. Addendum: The reconciliation process Doctors  All payments are received at bank lockbox and come in under a single tax ID Distribution instructions are generated weekly to distribute the weekly receipts into the separate Care Centers The Avisena system ensures that as payments are posted, the payment inherits the characteristics of the charge (i.e. the provider of service). In this manner, the person posting does not need to allocate the money to a specific doctor or practice but rather the system determines its allocation through the posting to the appropriate service item. The system provides all the necessary reporting to illustrate how much money belongs to each practice/doctor so that it may be distributed accordingly. Care Center 1 Care Center 2 Mega Group LLC Care Center 3 Care Center X
  15. 15. Addendum: The bank reconciliation process <ul><li>Over the counter Reconciliation </li></ul><ul><li>Payments received at the office are captured in Avisena’s practice management system. These payments are recorded in the individual patient’s account with all relevant payment information. </li></ul><ul><li>At the end of each business day, all payments received over the counter can be reconciled using Avisena’s end of day closing procedures. The end of the day closing within Avisena’s practice management provides a facility to reconcile all of the payments received for each different payment method. The end result is a complete report of all of the items received at the office that provides the basis for a bank deposit instruction. </li></ul><ul><li>Remitted Deposits </li></ul><ul><li>Remitted insurance and patient payments are received at the bank’s lockbox facility. These payments are processed at least once a day and the remittance advices are sent over to Avisena’s processing center for posting. In most cases, the remittance advices are received by Avisena the same date the payments were deposited. </li></ul><ul><li>Once remittance advices are received, they are logged in the Avisena’s Remittance Entry sub-system for posting. Payments are posted against the originating charges for proper financial record. Once all payments are posted for each deposit, we ensure that the amount of payments posted balance against the deposit amount. We commit payments when they are fully reconciled against the deposit total. </li></ul><ul><li>Bank Reconciliation and Distribution Process </li></ul><ul><li>Bank statements are reconciled against all deposits made in the bank account on the daily basis. This reconciliation process includes balancing all deposits shown in the bank statement (remitted, over the counter, EFT) against the payments captured in the Avisena system. </li></ul><ul><li>Once a week, a distribution instruction is generated to distribute the weekly receipts into the separate business offices. Because we reconcile payments at every level, the sum of payments distributed equal the total amount deposited within the reconciliation week. </li></ul>

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