Upfront efforts result in better collections

Verify detailed patient benefits, not just coverage

[Editor's note: This is the second part of a two-part series that looks at results of a nonclinical benchmarking study conducted by the Institute for Quality Improvement (IQI). Last month, we looked at patient scheduling practices, staff costs, use of electronic medical records, and patient satisfaction results. This month, we look at effective billing and collections practices.]

You won't get paid for a procedure until you bill for it. That's why participants in the Ambulatory Surgery Non-Clinical Study for Colonoscopy focus on getting payments upfront and to getting bills out to insurance companies and Medicare quickly. The study was conducted by the Association for Ambulatory Health Care's Institute for Quality Improvement.

Permian Endoscopy Center in Odessa, TX, is a small center that only does about 150 colonoscopies each month, says Alice Jolley, assistant administrator and clinical director. "Our colonoscopies are usually completed in the morning, and we have one person who prepares and sends those bills that same afternoon," she says.

Because she has only five staff members, Jolley relies on cross-training to improve her efficiency in activities including billing. "My recovery room RN had previously worked in a physician's office and has the knowledge and experience to handle billing, so she is also our billing department as well as our recovery room RN," she explains.

Jolley's center did report the quickest turnaround on sending bills out of all 40 organizations participating in the study. The range of days required to send bills was same day to 11, with a median of two days.

Cindy Nichols, patient accounts manager for Lakeland Surgical & Diagnostic Center in Lakeland, FL, knew they would be over the median in this category because they handle all of the billing for two centers in a central office. A separate claims and billing staff is necessary for the center because in addition to a variety of other procedures, Lakeland handles 3,000 colonoscopies annually. "We bill within three to four days of the procedure because we have to get the information following the procedure from the center, and we also double check insurance information and coding before we send the claim," she explains.

The median percentage of bills that were outstanding for more than 90 days for all study participants was 5%. Nichols' center averages 8% for bills that are outstanding more than 60 days and much lower for 90 days, she says. "We handle all of our own billing and collections up to the 90-day point, then we turn the account over to a collections agency," she explains. "We rarely have to turn accounts over."

Tell patients what they will owe

Upfront efforts to collect money are the key to her center's high collection rate, says Nichols. "We collect the patient's copay, coinsurance, and deductible that are owed the day that they come into the center for the procedure," she explains.

This collection can be done by verifying not only insurance coverage prior to the procedure, but also by verifying benefits, Nichols says. They contact the patient's insurance company with information provided by the physician at the time the procedure is scheduled. "We find out what percentage of the procedure the patient's plan will pay, what copay is due, and how much of the patient's deductible has already been met," she says. "Then we calculate the patient's portion of the bill based upon the CPT code for the procedure, and we arrive at a very close estimate of the patient's responsibility for the procedure."

Collect on a case-by-case basis

When collecting deductibles, be sure to review your contract with the insurance company, suggests Nichols. "Some insurance companies do not permit you to collect based on the deductible," she says. None of the insurance companies with whom she has contracts prevents her from collecting deductibles, but Nichols does decide how much to collect on a case-by-case basis. "If the patient has a very small deductible or the patient tells me that he or she has been to the doctor three times in the past month, I usually don't collect it because it is likely that the deductible will be met when I bill the insurance company," she explains.

A letter than explains the costs, expected insurance benefits, and patient's responsibility is sent to the patient at least three days prior to the procedure. "Because patients know what to expect, we almost always collect 100% of the amount due from the patient on the day of the procedure," says Nichols. If there is a true financial need for the patient to pay in installments, Nichols staff will work out a 90-day payment plan, but they do not extend payments beyond that point, she says.

In addition to the upfront preparation, Nichols' staff also gets a copy of the patient's insurance card at the time of the procedure and checks the information on the card against the information used to prepare the financial obligation letter and initial bill. "We occasionally find that physicians' offices have sent outdated information that we didn't discover in our initial contact with the insurance company or that patients have billing addresses or insurance plan changes between the time the procedure is scheduled and the time it occurs," she explains.

By double-checking the card itself, her staff is able to correct errors. "We have very few denials because we double-check everything before we send the claim," Nichols adds. A low claim denial rate is true for most study participants, who reported a denial rate range of 0 to 17%, with a median of 1.5%.

Supply costs per procedure for participants in the colonoscopy study ranged from $5 to $77, with a median of $37. Permian Endoscopy was well below the median at $10 per case because there is only one doctor at the center and he is very cost-conscious, says Jolley. "We don't use intravenous medications for the patients so we don't need IV supplies, and we also don't use sterile gloves," she says. "It is not necessary to spend the money on sterile gloves because our procedure is nonsterile."

The center is a member of a purchasing group because they are small and need the group to obtain discounts on supplies, Jolley says. "We do purchase supplies in volume to take advantage of the best prices," she adds.

Conduct informal comparisons

The best way to improve cost effectiveness and efficiency is to constantly check with peers about how they handle things in their organizations, suggests Nichols. "We were not surprised by any of the results of this study, because we are constantly comparing ourselves informally through conversations with peers at meetings or through a variety of benchmark studies," she says. It is difficult for a large organization to stay efficient because the tendency is to hire more people when you get busier, Nicholas admits. "Benchmark studies let us know where we have room for improvement and help us constantly look for better ways to handle our jobs," she says.


For more tips from participants in the Ambulatory Surgery Non-Clinical Study for Colonoscopy, contact:

  • Alice Jolley, Assistant Administrator and Clinical Director, Permian Endoscopy Center, 315 E. Fifth St., Odessa, TX 79761. Telephone: (432) 335-8300. Fax: (432) 335-8330. E-mail: ajol@cableone.net.
  • Cindy Nichols, Patient Accounts Manager, Lakeland Surgical & Diagnostic Center, 115 S. Missouri Ave., Lakeland, FL 33815. Telephone: (863) 683-2428. Fax: (863) 683-3717. E-mail: cnichols@lsdc.net.