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Billing: Are Hidden Problems Lurking?
By Joe Sansone
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Joe Sansone |
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I once hired a cocky young warehouseman at a pay
rate of $11 per hour. He progressed through the ranks and, with a
year's experience under his belt, asked to assist in the
supervision of the Insurance Department. My obvious response was
that cleaning rental equipment and shipping cast molds and braces
hardly qualified as training to supervise a 20-person Insurance
Department. A similar response to the third and fourth request sent
him reeling, his tail tucked between his legs.
I should have known that this young warehouseman was destined
for greatness in the corporate environment when he solicited the
assistance of my wife. They asked to take me to lunch one Friday.
We discussed the improvements the manager had made in warehouse
operations, and after a few margaritas, they convinced me to at
least allow the fledgling manager the opportunity to investigate
the Insurance Department.
My years of experience in this industry told me that on his
first glance into the intricacies of third-party billing, he
probably would run away screaming in horror. I could then
distribute a patronizing pat on the back, say "I told you so," and
return to business as usual.
I was ready for my predictions to come true, when the next
Monday this warehouse manager asked to meet with me to discuss what
he had discovered in his eight hours of insurance management
experience. While walking through the Insurance Department, he was
asked by one of the billers for an additional four-drawer filing
cabinet, since the old cabinet was full. Upon further inquiry, he
discovered that the filing cabinet was used to store un-filed
claims. Days later, we added up the claims in this filing cabinet,
and they totaled $800,000. These claims were pending for various
reasons, such as no diagnosis code, no patient's date of birth or
Social Security number, etc. When reality set in, we realized that
most of these claims were past the filing deadline, and that the
possibility of collecting these billings was slim. I would be lucky
to collect $100,000 of the $800,000 balance.
How Did This Happen?
Poor managementIt is management's job to make
sure that things like this do not occur. No excusesthe Insurance
Department manager should be held accountable for the insurance
billing. In the aforementioned situation, the Insurance Department
manager had not taken the following steps to ensure that claims
were being mailed out properly:
- There were no policies and procedures in effect spelling out
the specific duties of the employees.
- There was no monitoring of the day-to-day activities of the
employees.
- There was no system of checks and balances to make sure that
the work was being done correctly.
- There was no system to quantify the day-to-day billings, so
that management could verify that the Medicare claims were being
mailed out and not just billed and filed away.
Irresponsible employeesSimply put, the
employees were not adequately performing their daily job duties as
expected by management. During this time period, if employees were
in the process of submitting a claim for a $10,000 BK prosthesis
and lacked a date of injury or the patient's Social Security
number, they did not take the three minutes to place a phone call
and obtain the information; they simply set the claim aside. After
one year of this irresponsible behavior, we had a file cabinet full
of $800,000 of un-filed claims.
OwnershipAs discussed earlier, while it is
management's responsibility to ensure that billing is being done
correctly, it is the facility owner who suffers the most when these
mistakes occur. Just as it is the Insurance Department manager's
responsibility to ensure that the billing is being done properly,
it is the facility owner's responsibility to ensure that the
Insurance Department manager is doing his/her job and that the
billing is being accomplished successfully.
Many facility owners coming from a clinical background often
just bury their heads in the sand and hope that the billing and
management personnel are performing their jobs adequately. This
type of mentality will often doom the practitioner to
disappointment. Facility owners or practitioners are often fighting
like cats and dogs in a day-to-day struggle for referrals. These
efforts are wasted if billing is done improperly, because the
revenues may never be seen.
We have all heard similar nightmare stories from various
practitioners and physicians. In fact, almost everyone has
encountered billing difficulties at some point.
How to Prevent This
How do you know your claims are being mailed? Even more
importantly, how do you know your claims are being sent out
correctly? Do you have the mechanisms in place to assure that all
your systems and processes are sound? And if they are sound, are
these policies and procedures being followed?
In the next article, I will discuss exactly how we conducted the
arduous process of righting the wrongs of our Insurance Department
by:
- Establishing new policies and procedures;
- Ensuring that management was involved in the day-to-day
functions of the Insurance Department;
- Instituting a system of checks and balances; and
- Determining a way to quantify billings.
We were able to increase our collection percentage by 24 percent
in one year. What happened to the young warehouse manager? Four
years later he is now the director of operations. Joe Sansone is chief executive officer of TMC Orthopedic, Houston, Texas. 
Table Of Contents - October 2002
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