Health Insurance

Medicare Advantage Plans Are Lucrative for Insurance Companies

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In an effort to control Medicare costs, the government few years ago introduced Medicare Advantage plans which are administered by private insurance companies.

Medicare pays the insurance company a fixed amount per enrollee per year to manage the care provided to the beneficiary who enrolled with the insurance company.

These beneficiaries opt out of the traditional Medicare plan administered by the Government. However, they may re-enroll with traditional Medicare during open enrollment.

These plans are aggressively marketed by insurance companies to Medicare beneficiaries. They have proven to be “cash cows” for the insurance industry.

The insurance companies reimburse as per the Medicare rates, however to make them attractive to the average Medicare beneficiary they add extra benefits including health club memberships in some cases.

On the surface the reimbursement per enrollee seems reasonable. However, the government has complex formulas, where for patients with many illnesses the insurance is reimbursed several thousand dollars more to manage these situations.

The New York Times recently had an interesting article where a national insurance company was fined several million dollars by the government for manipulating the diagnosis on such claims to qualify for the extra dollars.

What is the impact for you the physician?

Unlike, traditional Medicare which does not require prior authorization, Medicare Advantage plans operate like any managed care plan. This puts an extra burden on the practice to ensure all the rules imposed by such insurance company are followed prior to rendering care.

The denial rate on claims for these Medicare Advantage plans is much higher than traditional Medicare. This increases the cost to collect from these plans.

As a practice you must be familiar to recognize this pool of patients and follow all the rules and regulations prior to rendering the service.

Cutting Benefits to Medicare Recipients – Boosting Insurance Company’s Profits:

From the initial introduction of these plans, the insurance industry has found how to make these plans very profitable. Since the government has given them flexibility in offering benefits and managing care insurance companies have benefited tremendously from offering these plans. The government has also benefited to some extent in controlling their costs and continue to encourage beneficiaries to opt for these Medicare Advantage plans.

It is evident from the movement in the stock prices of all the large healthcare companies that Obamacare had been a bonanza for the profitability of such companies. All the companies stock prices have increased by over 300% in the past five years. This is all despite many experts saying that the Obamacare laws would be “bad” for the healthcare companies and their stock values.

Who are the losers?

The patient and physician are both disadvantaged with these plans. The patient must make sure that they follow the guidelines for care to ensure the provider is paid for the service and they are not held responsible. The physician has the added cost for billing and getting all the prior authorizations before rendering care or less they will not get reimbursed for the services.

It is a sad commentary, the two most important entities in the healthcare equation: Patient and Physician continue to be victims in the US healthcare system.

If you are seeking advice on how to reduce your losses to Medicare Advantage plans or looking for insight on how to navigate healthcare plans please feel free to contact us. 

Topics: Healthcare ConsultingHealthcare PaymentsHealthcare InsuranceMedicare,Medicare AdvantageInsurance CompaniesObamacare


Analytics Financial Health Financial Monitoring

How to Improve Your Practice’s Financial Health

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If you’ve found that your practice’s financial health isn’t where you’d like it to be, you’re probably wondering if you can do anything to remedy this critical issue.

As we’ve previously discussed, maintaining a financially healthy practice directly affects the quality of service you can provide your patients — though it may not feel that way. It’s common for practices to prioritize delivering high-quality patient care over “running the business,” which makes sense.

Without a reputation for providing excellent care, why would anyone look to you for help? Unfortunately, putting your financial health on the back burner can lead to scenarios which directly affect your patients’ well-being, like lacking the consistent revenue stream to hire more medical professionals to provide care to a growing roster of patients. Providing exceptional patient care and maintaining a financially healthy practice isn’t an either/or proposition; they truly go hand-in-hand.

Fortunately, improving your collections is not a herculean task — providing you use the right tools.

The first step to improving your practice’s financial health is to gain a solid understanding of your revenue data. How can you do this? If you don’t already use a financial analytics dashboard, you should consider implementing one into your billing process. A top of the line system provides information that helps you understand where you’re falling behind and improve your billing.

What is a Financial Analytics Dashboard?

A financial analytics dashboard tracks:

  • All the financial data that comes in to your practice
  • The time it takes to receive the revenue
  • Which insurance companies are efficient in paying you and those that aren’t

A good financial analytics dashboard will take this intel and turn it into actionable analyses and reports. With a dashboard you’ll be able to discover sticking points in your billing practices and understand how to resolve issues causing your practice to lose revenue.

The dashboard allows you to break out of mediocre billing practices. For example, below are some key figures for how practices using our financial analytics dashboard perform in comparison to the industry national averages.

Averages number of days charges are in accounts receivable:

  • Industry: 35 days
  • Currence: 24 days

Percentage of charges in accounts receivable  over 120 days:

  • Industry: 18%
  • Currence: 12%

Percentage of claims paid the first time submitted:

  • Industry: 85%
  • Currence: 97%

As you can see, our dashboard allows practices to get the insight necessary to pinpoint gaps in their billing practices. The reports and analytics we provide help organizations make data-driven decisions, rather than act like a cart on square wheels, trying to desperately increase revenue without employing the right tools for the job.

Click here to learn more about how the right financial analytics dashboard can have a huge impact on your practice.


Medical Billing Uncategorized

5 of the Most Common Medical Billing Errors and How to Fix Them

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Medical billing errors are common, but exactly how common isn’t clear.  Several studies have attempted to quantify the extent of the problem, but each has arrived at a different conclusion.  Among the more startling of these is a 2015 study from Equifax, reported by ABC news:

“A group of auditors hired by insurance companies recently found errors in over 90 percent of the hospital bills they examined. An audit by Equifax found that hospital bills that totaled more than $10,000 contained an average error of $1,300.”

The Cost of Medical Billing Errors Is High

The cost of billing errors to healthcare organizations, even at low-end estimates, is prohibitive.  For example, a write-off rate as low as 1% could cost the average 300-bed hospital as much as $3 million in lost annual revenues.  At 10%, that cost jumps to $30 million.  Those kinds of losses are not sustainable.  To remain financially viable, healthcare providers must become proactive in managing billing claims and implementing safeguards against billing errors.

What Are the Most Common Medical Billing Errors?

There are multiple types billing errors, but, according to the 2013 American Medical Association National Health Insurer Report Card, 5 occur much more frequently than the others. Here they are, along with ways to avoid them:

  1. Missing information:  often, demographic information on claims is missing or incomplete. Fields such as birthdate, or a complete address, can delay the processing of a claim.  In addition, coding errors or usage of outdated codes can cause claims to be denied or delayed. All billing systems should have robust “scrubbing” software to catch common errors prior to the claim being submitted electronically.
  2. Submitting 2 claims for the same service:  these mistakes are often referred to as “duplicates.”  Duplicates occur when a claim is resubmitted for the same service by the same provider on the same date, and for the same beneficiary.  Providers need to train staff to ensure that every submission is new and has not already been submitted.
  3. A service was previously adjudicated:  this happens when providers bundle procedure codes and include benefits for a given service in payments for another service.  To avoid this error, providers should implement a unified process that aligns the team on the adjudicated process.
  4. Services are not covered by the patient’s insurance:  this is among the most common, and most expensive, of medical billing errors.  According to the U.S. Government Office of Accountability, the rate of denials (including those based on medical necessity) nationally because services or procedures were not covered was 19%.  What’s striking about this mistake, especially considering its pervasiveness and cost, is how relatively easy it is to avoid.  Providers simply need to review the details of each patient’s coverage and contact the insurer if they have questions.
  5. Filing medical claims too late:   providers are aware that payers typically impose time limits for the submission of claims.  (This includes a 60-90-day time limit on the initial claim, and, if the claim is denied, an additional 45-day limit to appeal the claim.)  If the initial claim is not filed in a timely manner, there is little a practice can do other than write off the amount.  As with the other mistakes noted here, this one has a relatively simple fix:  providers simply need to create a system in which staff receive automated alerts as medical claims approach their time limit.

Reducing Errors Requires a Team Approach

One thing is certain:  playing the blame game is not going to reduce medical billing errors.  Every member of the team has a role to play, and every team member is ultimately accountable when errors occur.  For example, as a report issued by Health Data Consulting notes, physicians are not without their share of responsibility for billing errors, many of which occur based on inaccurate clinical documentation at the time of care.

It can be challenging for medical providers to bring that degree of introspection to their internal processes.  Often, knowledgeable professionals from the outside can be more effective in identifying the causes of billing errors, and to fix them systemically.  To learn more about the ways our medical coding, accounts receivable recovery and monitoring, analytics, and coding audit services can bring greater efficiency to your healthcare organization, contact us today.

Topics: AnalyticsMedical CodingHealthcare ConsultingMedical BillingAccounts Recievable ManagementClaimsMedical InsuranceFinancial Monitoring


Financial Health Medical Billing

Addressing the Financial Health of Your Medical Practice

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Maintaining a financially healthy medical practice is important for many reasons. 

On the most basic of levels, it allows you to keep the doors open. You can retain employees, keep morale high and remove the headaches associated with worrying about money month to month. Most importantly, though, it allows you to better serve your patients.

How so? A financially healthy practice is able to plan long-term for future needs. With a secure, stable revenue stream, you can do things like hire more employees, improve your facilities, invest in new technology, and offer more development opportunities for staff.

Of course, this revenue is all tied back into the rate at which a practice receives payments from insurance companies. The longer charges stay in accounts receivable, the longer it takes your practice to get paid for the services performed. Ideally, your practice should only have to submit a claim to insurance once for it to then be paid, but this isn’t always the case.

So where does your organization stand? To help you get a better grasp on where your organization stands, look at these key questions and national averages below.

How many days of charges are in accounts receivable?

The average practice has charges in accounts receivable for 35 days. Remember, the higher the number of days, the longer it takes for you to be compensated for your work. If your number is 35 or higher, then you need to begin taking steps right now to lower it. Even if you are below 35, there are most likely opportunities for you to lower your days in accounts receivable to be even fewer.

What percentage of your accounts receivable is over 120 days?

In an average practice, 18% of claims have been in accounts receivable for over 120 days. Claims unpaid after 120 days require additional, urgent attention in order to receive payment, creating more work and slowing down your practice.

What percentage of claims are paid on first submission?

The average first claim pass rate is 85%. If you are regularly resubmitting claims multiple times, then it’s time to pinpoint and rectify the reason insurance keeps refusing payment.