Some of you may know that I recently took on a project as Manager of a Medical Services Organization (MSO). This organization provides various billing and practice management services to 300 + physicians in various specialties.

Since I've been back in the business I come to realize what many of you may have been experiencing in the past couple of years. Turning receivables into cash is getting more and more difficult and it cost more money to get lesser results.

Many times clients do not appreciate the added effort it takes today to try to collect the dollars that used to just come pouring in back in the good old days.

I've been in this business so long I remember when we used to send out a bill and it was actually paid.

There are some things I've observed over the last few years that has caused our industry to radically change. These changes are so radical that we only have a few options to remain viable:

· Reduce the crushing amount of paper work we must face everyday.
· Increase our prices to our clients.
· Curtail services to unprofitable clients.
· Sell everything and become a hermit.

The last few years I have heard clients complain about the fact that their revenues have been declining. Some of them have expressed the attitude, "If my income drops, your profits must drop." Sort of a share the pain scenario.

Well they may think that is a logical argument however; everyone must be able to enjoy a return on investment. And with today's challenges in the marketplace many are now working harder and longer hours just to try to stay above water.

Many forces are working against billing firms and if the tide doesn't soon change I think that for the first time in the history of our industry many firms will decide to or be forced to "go out of business."

Here are some of the current challenges:

· Government regulations change quicker than programmers can write and test code. No sooner do we pay for programming to make our systems compliant and they change the rules.
· A compliance program will cost firms a minimum of $50,000 a year to implement, train and audit. Plus it's money down the drain unless they remove all the regulatory "gray" areas. We can't even get the same answer twice on the same question from an intermediary.
· Credentialing and enrollment. Many payers systems are created for the sole purpose to get out of paying claims. The plethora of paperwork and ludicrous requirements are put in place to get out of paying claims.
· Attachments! What an administrative waste of time and money. We need to attach a Medicare EOB so we can get $3.23 from the secondary payer. It cost more to send it out the door. If the payer wants a copy they should contact Medicare and receive the information electronically.
· Good news is the economy is booming. Bad news is our hourly rate for clerical employees has jumped a minimum of 2 to 4 dollars per hour.
· Y2K, I'm sure you all put money away for this challenge. Didn't we all set up a college fund for our kids and a Y2K fund for our systems and equipment?

These aren't all the hoops we must jump through these days but some of the most annoying. As the administrative nightmares continue how are we possibly going to maintain any profit levels.

I always heard that we don't have problems we have opportunities. However, some folks who aren't used to thinking outside the box, are going to have problems if they don't dramatically relook at how they are running their business.

I hope as we continue to work together in the HBMA with our committees, government relations department and each other we will be able to start to change the tide. Hopefully decisions will be made with billing firm's challenges in mind or we are going to be "OUT OF BUSINESS".

Remember this monthly feature will address topics of interest to you. I really appreciate your input and suggestions. Please send your questions or ideas on topics that you would like addressed, to: Dave Jakielo, Seminars, Training and Consulting, 86 Hall Avenue, Pittsburgh PA 15205-3214. Phone and Fax number 412-921-0976. Email = dave@davidjakielo.com - http://www.davidjakielo.com - HAPPY HOLIDAYS!