Published - January/February 2020

Data Is Not Enough; Clients Need Information
By Dave Jakielo

There are still some dinosaurs in this wonderful world of Medical Billing (as an example, me!). My career has spanned over five decades, starting in Hospital Patient Accounting -- what it was called before the current term of Revenue Cycle Management. I think the title was changed to help bolster salaries.

As I reflect on the beginning of my career, I remember daily posting hospital charges on an NCR bookkeeping machine (which was just a glorified cash register) to individual paper patient ledger cards.

The hospital UB claim forms were prepared on an IBM Selectric typewriter, which was hi-tech compared to the manual Royal typewriters scattered throughout the office. If you wanted a copy for your records, you better not run out of carbon paper.

We have come a long way in the past 50 years when we look at how we try to obtain reimbursement for medical services. Unfortunately, however, our industry is on a snail's pace, compared to every other industry, when it comes to developing and adopting technology to vastly improve the process.

We may have gone from reports printed on three-part green bar computer paper to now emailing electronic PDF files, but many times, the data remains the same. It's a mountain of numbers jumbled together that may be indecipherable to anyone but a senior actuary.

We should move past the days of just reporting on:

  • Gross charges;
  • Total payments;
  • Amounts written off as a contractual allowance; and
  • Bad debts

Today's practices, to be successful, need information that enables them to maximize their effectiveness and efficiencies. Some ways to accomplish this feat are to proactively track changes in modalities, payer mix, and RVUs.

One example of why it is important to monitor changes in payer mix is what happened in one of the primary care practices I was managing. The largest employer in town decided to switch insurers, which changed the coverage for hundreds of their employees. The practice participated and had agreements with both the previous third party and the new payer providing coverage. Therefore, patients were not impacted by the switch.

Yet, the previous insurer agreement called for payment at 185% of Medicare, while the new insurer's agreement, which had been in place for years, only reimbursed at 130% of Medicare. When the practice originally decided to participate with that insurer, their covered lives in the town were miniscule, so the practice didn't really weigh any economic ramifications, thinking it was such a small amount of covered lives, so no big deal.

However, given the change in reimbursement for many of their patients that went from 185% to 130%, it's the first time I can recall that the doctor was actually right when they said they were working harder and getting paid less.

This fiasco could have been avoided if we were just paying attention to a payer mix report/pie chart each and every month. Shame on me and lesson learned. We eventually lost the confidence of the client, because they figured that if we missed this, we would miss something else, and they moved on. Another important data element that needs to be turned into information is reporting on referring physicians. If you are still in the dark ages and just telling your client how many patients or the total gross charge amount that is coming to their practice from a doctor, you are not helping the practice. You should also include payer mix and dollars collected from those patients.

I've seen an instance in practice where they thought their top referring doctor was a superstar, but when we started reporting payer mix and actual collections, we found that he was only sending a majority of low pay/no pay patients, and his more affluent patients were being referred to his sister-in-law.

If there are multiple providers in a practice, it may be imperative to track individual productivity to ensure the practice is maximizing their resources. You need to account for and report on unused appointment slots, canceled visits, and patients who end up being no-shows.

I realize that many of today's legacy Practice Management systems may not have the capability of reporting on the above-mentioned elements, nor can they produce charts and graphs which are visually easier to interpret versus only numerical representations. For this reason, if your system can't turn data into information, it is mandatory to invest in what is most commonly referred to as BI, or Business Intelligence, software. (To learn more about BI for Medical Billing, just Google it.)

I know you want to provide the best service as possible to your client, so remember that it's not just about data, it's about information.

Dave Jakielo, CHBME, is an international speaker, consultant, executive coach, and author, and is president of Seminars & Consulting. Dave is past president of Healthcare Billing and Management Association and the National Speakers Association Pittsburgh Chapter. Sign up for his FREE weekly Success Tips at Dave can be reached via email; phone 412-921-0976.

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