Why You Shouldn’t Waive Patient Copays

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The past two years have brought financial and emotional hardship for millions of people.  It is natural, as a physician, to want to empathize with patients by providing lenient policies on payments. Especially for those struggling to get by on a limited income or those who are dealing with the financial fallout from the pandemic. Initially, it may seem like a good idea to waive the deductible or copay portion of a medical bill. But hold on – before you do that you need to consider the consequences.

Legal Ramifications of Waiving Copays

Before you go down that road, there are legalities you need to understand. The first is that most physicians have entered into legal contracts with private insurance companies, as well as the federal payers – Medicaid and Medicare. Entering into these contracts makes it an obligation to fulfill the terms and asks that providers collect copays and deductibles, Also, should a provider waive the patient portion consistently, without the payer’s permission, the payer could logically assume that the practitioner’s fees are “x” percent less than originally stated, breaching the contract.  An example of this would be, if the patient has a $10 co-pay, then insurance would pay $90 on a $100 charge. However, if the copay was waived, the patient’s bill is only $90 total, not $100.

This would give a payer grounds to file a suit for fraud. If it is Medicaid or Medicare, you could be charged under the False Claim Act and be found guilty of a felony, owing financial penalties, be permanently barred from participation in government insurance programs, and could also spend time in prison!

Other laws that could also trip you up are the Anti-Kickback Statute (AKS), which pertains specifically to government program patients.  You hear stories all the time about unethical providers or medical suppliers who trade money for referrals of new Medicare patients. But even if the practitioner’s intentions are good, you could still run into trouble with the federal government. It has been made clear in “A Roadmap for New Physicians, Fraud & Abuse Laws” from the HHS’ Office of the Inspector General that consistently failing to collect patient copays in any instance, other than a well-documented case of financial hardship, is illegal.

Also, thanks to the Affordable Cares Act, AKS violations are subject to further penalties under the False Claims Act, as mentioned above, so you can keep getting deeper and deeper in trouble.

If that wasn’t enough, you could also be seen as breaking the Civil Monetary Penalties Law (CMPL), with a Medicare patient, if the arrangement is seen as influencing a patient to order specific services or medical items from your practice or another provider your office has a relationship with. Understanding that multiple laws, both federal and state, govern a practitioner’s engagement with government healthcare programs, as well as private payers, is critical to the health of your practice.

Financial Ramifications of Waiving Copays

In addition to the legal ramifications, there are financial ones. First of all, when you waive copays and deductibles you are undervaluing your services.  With payers paying less and less, not collecting patient copays and deductibles can also have negative consequences on your practice’s cash flow.  With the increase in high deductible healthcare plans, sometimes the payer is paying less than the copay or deductible for a service as the majority of the cost of the visit is the patient’s responsibility.

To compound the loss of revenue, legal fees can run into the thousands or even hundreds of thousands of dollars. And should you lose, the financial penalties can be substantial.

Doing It the Right Way

In order to ensure your revenue stream, make sure you comply with all contractual obligations. Also, make it easier on your staff by establishing a financial policy that clearly spells out provisions for collecting patient copays and deductibles as well as clearly stating your policy on patient discounts and charity policies. Establishing these rules and guidelines with all staff will help protect your practice.

Some other ways to help ensure that your revenue stream stays positive and that you are following all legal rules and contractual guidelines are:

  • Set up a system for establishing and documenting financial hardship in a patient’s chart – It is hard to talk about money but giving your staff the tools and guidance will help ensure this is done correctly. Just having a patient sign a form isn’t enough. You need to have someone on your staff perform due diligence and thoroughly document, in the patient’s file, proof of financial hardship.
  • Ensure you have set a policy for professional courtesy – This used to be a common situation, extending discounts to colleagues as a professional courtesy. But with payer contracts, laws, and guidelines you need to be clear about how to handle these situations so as not to put your practice at risk.
  • Set up payment plans – Work out agreeable terms for patients to pay off their balance in installments.
  • Establish a consistent, fair system for collecting outstanding balances – The industry standard is to send out three statements and if you don’t hear back from the patient, follow up with a phone call or collection letter. If after all of that, you still haven’t received payment, ensure it is documented well in their patient record. If done correctly your practice can then choose what to do including turning it over to collections.

You can certainly help patients struggling with financial hardships, just do it sparingly and make sure you document, in their patient record, that they qualify as a hardship case per your established policy. That is because there are exceptions built into the AKS and CMPL that allow you to forgive copayments providing you can prove the patient’s financial need. But these should be an exception and the rule should be to always collect copays and deductibles.

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Who is Billed Right?

In 2006, two business partners had a vision of creating holistic services that help improve medical billing operations. They started by listening to doctors and building a service model around what doctors need the most. As a result, Billed Right’s Revenue Cycle Management (RCM) model was born. The focus continues to be on solving the problem, rather than selling a product, and hence, Billed Right’s advanced RCM model revolves around personalized service in today’s corporate world, while still cutting costs and improving both patient care and practice revenue.  As a strategic partner, we look to streamline your revenue cycle and operational management thus helping you to grow your healthcare practice.

 

Contact Billed Right to learn more about how we can become your strategic partner.

What could an analysis of your practice reveal?

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A new year offers excellent opportunities to reflect and learn from previous experiences. For a medical office, this could mean analyzing its performance, but when reflecting on the processes used to accomplish this task, it is necessary to drop the simplistic approach to naming what went wrong or good and identify underlying factors that can result in new business opportunities or hindrances to business growth.

One important tool that medical practices can use to create awareness when making a business decision is the SWOT analysis. This planning resource provides a brainstorming framework to identify internal and external elements that can have a positive or negative impact on your business. Created by Albert Humphrey, an American business and management consultant while working for the Stanford Research Institute, this analysis technique explores four strategic areas (Strengths, Weaknesses, Opportunities and Threats) that have a strong effect on the success of a business.

What a SWOT analysis could look for your practice?

Unfortunately, many medical practices struggle in some or all of these negative areas. For this reason, a SWOT analysis is a standard resource we provide our clients. By highlighting their advantages, disadvantages, potential opportunities, or what is likely to cause damage to their medical practices, we empower them with information to improve their decision-making and planning.

Do you want to know more about what we can do to help your practice grow?

Get in touch:
Web: www.billedright.com
Email: info@billedright.com
Phone: (407) 745-1849

DO YOU WANT TO GET PAID FASTER?

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For most companies, the speed of business establishes the critical difference between their survival or operational shutdown. Performing in a culture built for speed requires that businesses become more agile and innovative. The immediacy of communications fuels this turbo-charged culture, and medical practices are not the exception. Today, technology has transformed traditional reimbursement methods allowing electronic claim scrubbing that facilitates submission of cleaner claims and reduces denials or rejections while accelerating reimbursement and overall payment optimization.

Measuring healthcare reimbursement processes is an important way to assess the health of a medical practice, and reducing reimbursement times is crucial to achieve optimal performance. For this reason, reducing the amount of days claims remain unpaid must be the goal at all times. One useful Key Performance Indicator (KPI) consists of calculating the average number of days it takes a medical practice to receive reimbursement from billed charges. This metric is also known as “Days in AR”.

HOW TO CALCULATE “DAYS IN AR”

Although it may be more than one way of calculating it, a common form is to average daily charges for a set amount of months (3, 6, etc.) then, the total accounts receivable is divided by the average of daily charges resulting in the average amount of days it takes a medical practice to receive reimbursement from payers.

Claim adjudication times vary from payer to payer taking an average of 15 to 45 days. Industry standards for “Days in AR” are as follows:

  • 30 days or less – Best Performer.
  • 40-50 days – Average Performer.
  • 60 days or more – Under Performer

HOW TO REDUCE LONG DAYS IN AR

SPEED UP CLAIM SUBMISSIONS
Taking easy steps as to capturing charges electronically, signing up medical notes as soon as possible, and reviewing missing or incorrect data will allow faster coding and eliminate typical reasons for claim submission delays.

SCRUB CLAIMS BEFORE FILING
Scrubbing claims prior to submission will determine whether your claims will go through the clearinghouse without rejections and make it to the payer on first try. Check for mistakes or omissions in patient demographic or insurance data; valid and matching diagnosis and procedures; missing authorizations, etc. In addition to your own scrubbing, your clearinghouse will have their own verification parameters to conduct their own claim review.

DENIAL MANAGEMENT PROCESS
After successful transmission of your claims, monitor their status periodically. Some claims remain unprocessed and you do not want to find out later when you could have addressed it earlier. Resolve any denials or rejections quickly. Appeal processes may take longer to resolve, but keep in mind that your denial rate goal should be under 3%.

WORK AGING AR PROACTIVELY
As claims remain unpaid, they fall in aging time categories, typically 0-30, 31-60, 61-90, 91-120, etc. By overseeing the reasons for non-payment periodically, you can identify potential problems and harmful trends. As a general recommendation, check any unpaid claim even current claims at least once a month.

Improving your accounts receivable turnaround may be hectic, but not difficult. Just as many RCM processes, it requires determination and organization. Is your practice in need of faster reimbursement of outstanding claims?

A proven strategy for the success of any medical practice consists of working with a proactive and organized team that understands challenges, and apply experience to overcome obstacles for faster reimbursement.

Do you want to know more of what we can do for your practice?

Get in touch:
Web: www.billedright.com
Email: info@billedright.com
Phone: (407) 745-1849

Billed Right’s ISO Certification Announcement

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We are pleased to announce that our India Operations Office is now ISO 9001:2015 certified.

Receiving this quality management certification strengthens Billed Right’s commitment to the quality and performance that sets us apart in the Revenue Cycle Management sector. This milestone is the result of a systematic and comprehensive assessment in all areas of our organizational structure, system developments, information and documentation management, employee responsibilities, organizational communications, decision-making, and continuity plans. As we celebrate this achievement, we want to take the opportunity to recognize our employees, clients, and vendors, for their continued commitment and loyalty since 2006.

Our promise still stands, Billed Right will always focus on meeting your expectations. As we continue driving on the path to success, we pledge to place our emphasis on providing the best to our clients, we look forward to bringing more great news in the months and years to come.

Get in touch:
Web: www.billedright.com
Email: info@billedright.com
Phone: (407) 745-1849

Office Patient Scheduling & Workflow Tips

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Are patient scheduling & workflow causing your staff headaches? Managing time in a medical office can be a nightmare, but a few practical tips, can help your staff be better prepared and improve your patient workflow.

  • Value punctuality! Educate your patients about arrival time and your physicians to enter the room on time as well. Any amount of delays will create a ripple effect that will expand across the rest of your day.
  • Make data your best ally. Tracking time is vital to develop a more effective approach to tackle patient traffic. What is the average time physicians are spending with patients? Are new patients filling out office forms prior to their appointment? How much time do patients have to wait before a physician can see them? Identify other timing issues by looking at several weeks of data. This analysis will help you establish the root of issues causing the bottlenecks and workflow problems in your practice.
  • Plan your strategy accordingly. Knowing how many physicians will be available on a particular week, the number of hours they can put in, and how many patients are scheduled each week will help you to better plan your patient flow.
  • Be aware of seasonal trends. For example, in Florida from around October to April, “Snowbirds”, (Northerners that travel South seeking warmer climates) carry travel medical insurance that will typically cover emergency medical services, but no routine, preventive or pre-existing conditions. Also prior to the beginning of the school year, children require medical check-ups and towards the end of the year, some practices see an increase in patients seeking to capitalize on their met deductibles. Many ailments are seasonal in nature with specifics increases during the winter or the summer. Knowing these trends may help plan and better prepare your practice when scheduling.
  • How about Group-Scheduling? Some medical offices have found practical benefits when scheduling patients that share similar conditions on specific days or by age groups. By doing so, the office staff can maintain a steadier pace when processing patients, and doctors find they can apply more mental focus when diagnosing.

Each medical practice is different and the challenges vary by geographic location, specialty, and other variables. However, these and other helpful tips you can pick up along the way can make a favorable impact when managing your patient workflow.

Get in touch:
Web: www.billedright.com
Email: info@billedright.com
Phone: (407) 745-1849