Most providers perform a thorough evaluation of various factors when hiring a medical billing company to handle their revenue cycle. Once the company is selected, less effort goes into re-evaluating the company.
It is a mistake! Sure, choosing the right company in the first place is of more importance, keeping an eye on your existing partner has its perks. However, there is a difference between the evaluation process before hiring the company and after you start working with it. The criteria to be considered are vastly different. This article focuses on the evaluation of medical billing companies once hired.
While each healthcare provider has differing requirements, and thus criteria may change depending on the size and range of your operations, the evaluation of your existing medical billing company should entail these very pertinent issues:
1. Difference in Overall Performance
While evaluating can be focused on particular areas as well, the starting point should be to review the overall performance. Evaluating the medical billing companies requires looking at what changed in your major performance factors. You could review the yearly or quarterly revenue growth and see if the growth is the same as before hiring the company, has increased or has fallen after the change. You could evaluate your per period costs and see the comparison similarly. The objective here is to see if your billing company is really making a difference.
2. The Effectiveness of Communication
An important factor in evaluating your partner firm is the judge to level of interaction between your billing company and your staff and patients. Do the company employees listen to your staff or patient’s issues? How soon do they communicate to you if there are any problems? Are they approaching you more than necessary? Are there any complaints from your staff or patients regarding the interactions with your medical billing company? The answers to all these questions would help you ascertain the level of seriousness of your partner firm.
3. Accuracy Rate of Coding and Billing
Another very important factor that goes into evaluation is the accuracy rate of your medical billing company. Errors in coding or billing can result in costly delays in reimbursement or even denials in some cases. A high number of mistakes point towards the lack of skills of your partner company’s staff or the inefficiency of equipment. Not only errors in billing result in lost revenue, this could also result in penalties for being non-HIPAA compliant due to issues in coding.
4. Claim Submission and Follow-Up
Some claims could also be denied by the insurance company due to delayed submission and lack of follow up. You should evaluate if your medical billing company is submitting the claims to the payer in a timely manner, and how active they are in following-up with the claims. Are they checking up with the insurance carrier about the status, and getting back to your staff for reconfirmation of confusing or missing information. If you see your billing company sending you back claims after weeks go by, maybe it’s time to look for an alternate.
5. Days in AR
Days in AR (Accounts Receivable), is another critical factor that goes into evaluating medical billing companies. Days in AR is a ratio that is calculated by dividing the total account receivables by the average daily charges for a stipulated period of time. If your days in AR are less than 30, that means your medical company is performing very well. If on another hand, the ratio goes beyond 60 days, you might need to have a look at the way your medical biller is handling claims, and ask for corrective action.