In the first of two articles, Simon Brignall discusses five common themes arising from his conversations with consultants wanting to address their issues around medical billing and collection.
The pandemic has resulted in a backlog of patients who are now seeking to access private healthcare about medical issues that should have been addressed earlier but, for one reason or another, they had deferred.
Many consultants similarly have delayed decisions about private practice. This has included new consultants seeking to start out in private practice or those established independent practitioners who are looking to expand or concentrate fully on private work.
Not all the delays can be attributed to consultants; for example, one UK insurance company was not open to new applicants for nearly six months. This resulted in a bottleneck of new consultants in the first half of the year.
This has meant that I have spent the past few months fielding inquiries from consultants, groups and clinics with questions about medical billing.
I have observed that many of the conversations have tended to focus on the same issues and so I thought it would be beneficial to examine the key ones.
There are ten main billing issues to address in many private practices. I will deal with the first five in this issue of Independent Practitioner Today and the remainder next month.
1. Terms and conditions
This has always been an important area, but it is very rarely managed correctly in a private practice.
With the advent of the Competition and Markets Authority stipulations regarding pricing, Private Healthcare Information Network transparency requirements as well as adherence to the General Data Protection Regulations, this is now even more important than ever.
You need to have your terms and conditions (T&Cs) documented and presented to the patient prior to any treatment taking place.
This would typically take place on a ‘patient registration form’ or as part of the initial correspondence when a patient engages with the practice. Areas covered include pricing, insurance shortfalls and any payment terms applicable, plus consequences if the patient fails to attend their appointment.
It is important to stipulate that the patient is liable for all the costs of their treatment, including any costs that are not covered in full by their private medical insurer.
If the T&Cs are clear, then the payments process is improved and there is a point of reference to resolve any disputes.
I often meet with consultants working in private practice who operate their billing process either manually or on a word processing diary and spreadsheet platform.
I have seen a range of manual solutions including notebooks detailing money owed and all sorts of Kafkaesque filing cabinet solutions.
A few years back, I had a new client where the handover consisted of being passed carrier bags containing invoices, unbilled clinic lists and unreconciled insurance remittances.
Even when these practices use some form of software programme to control their billing system, more often than not these software programmes are run on laptops, notebooks and personal computers which are not backed up.
This is far from ideal from a business recovery perspective, because if the device is lost or the software becomes corrupt or the hardware fails, then the consultant’s record-keeping and finances are put at risk – with all that this entails.
When commencing private practice, one of the first things doctors should do is to ensure their set-up is run on a sound financial basis with the appropriate infrastructure.
A vital element of this would involve having a robust auditable system to facilitate the financial processes of the practice. This should include the ability to:
Employ a robust chase process, including the ability to follow up on outstanding invoices using a range of communication methods.
Irrespective of what system is chosen, it is important to ensure it is backed up daily to provide financial integrity and conform to best practice.
If you are already in private practice, but currently do not have the appropriate infrastructure in place, then I recommend you put it at the top of your list of action points. This is because the risk you run is growing every day that this is not addressed.
I know from experience that pricing has always been the area that appears to give consultants the most stress. The reason for this is that it is a very difficult area, both within the insurance market as well as the self-pay sector.
Firstly, the consultant must decide, where they have the contractual option, whether they are going to adhere to each private medical insurance (PMI) company’s price schedule. Secondly, they must know the individual price schedule for each PMI, as each has their own specific price for each code.
There are over 2,000 codes provided by the Clinical Coding and Schedule Development group (CCSD), and some prices can differ by up to 100% between PMIs.
On top of this, each consultant must decide what rate they are going to charge for their consultation fees. In some cases, the contract the consultant has signed with the insurer will dictate what rate they can charge for both the procedure codes and the consultation fees.
Where the consultant is not contractually restricted, then they need to determine their fee structure and this is also the case for all fees related to self-pay patients.
These decisions are often made with minimal information, as quite often the consultant will find that while their peers will share medical knowledge, they are less likely to share commercial information.
If the consultant gets this area wrong, it can lead to them being incorrectly priced within the market and so they lose patients because their pricing is too high, or worse they lose thousands of pounds due to their pricing being too low.
Our experience is that consultants typically do not set their prices effectively because they have not done enough research when initially conducting this exercise.
Fee structures are often not routinely reviewed. Many consultants who tell me it has been over a decade since they last looked at their fees!
Once a consultant has decided on their pricing policy, they need to ensure they keep abreast of all the CCSD changes to the codes that are applicable to their specialty.
Changes to the coding schedules are implemented monthly. There can be replacement codes, new codes, changes to descriptions and the ability to bill multiple codes together.
All of this can also impact on what can be charged to each insurer. Lack of knowledge in this area can often lead to undercharging for procedures or billing problems with the PMIs that can delay payment.
Continuing to incorrectly invoice insurers can result in punitive action in extreme cases.
It is important that a practice raises their invoices promptly; however, it is not uncommon for the practice to delay this function by weeks and months.
The longest delay I have seen was with a surgeon who had not raised an invoice for over two years and the size of the problem had meant the practice had become paralysed in addressing the issue.
So why does practice invoicing fall behind? There can be a range of reasons:
Consultants who invoice themselves often prioritise seeing patients and other work commitments;
Support staff can find that other administrative tasks get in the way. This can especially be the case in busy practices;
Holiday and sickness absences.
Whatever the reason, this cannot be allowed to happen. Not only does it reflect badly on the practice, which can negatively impact the patients view of their treatment, but it also means the practice’s cash flow suffers.
Remember, the longer the delay in raising an invoice, the greater the risk it results in a bad debt.
Some insurance companies now have strict time limits – typically six months – in which they need to receive an invoice otherwise they will not pay. Effectively, you could end up treating these patients for free.
Another advantage of invoicing promptly is that you will be aware of any issues that may arise, which often improve your chances of these being resolved.
As a good rule of thumb, the practice should set the goal of billing within 24 hours of any treatment carried out, as this will ensure good cash flow and minimise bad debts.
In next month’s article, I will cover the remaining five billing topics. But, in the meantime, you may want to start addressing the billing aspects I have covered here.
But, of course, often the best solution is to contact a medical billing and collection company that has years of experience in this field.
Simon Brignall (right) is director of business development for Medical Billing and Collection