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Diagnosis: Losing Money Hand Over Fist

Curing the Ailing Economics of a Medical Practice

Some medical practices spend most of their time chasing dollars. Gary Janko, president and CEO of Access Partners, Inc., a medical information services and practice management company, says the average medical practice in the Boston area, for example, must deal with upwards of 150 different insurance companies to collect its revenues. Many are losing money hand over fist.

Insurance claims billing and collection is an area that is constantly changing. The reality of the economics is that small medical practices with fewer than 10 doctors (which is 90 percent of U.S. practices) cannot afford to hire people with the expertise to stay on top of that dollar-chasing activity.

Medical practices (as well as community hospitals and academic medical centers) that decide to go the alternative route and outsource those back-office processes and information systems to Access Partners usually see a 25 percent improvement in cycle time for billing and collections turnaround within the first year, Janko states. They also see an increase in revenue and lower costs.

It’s About Expertise as Much as Automation

Access Partners provides integrated business and information systems using its proprietary core technology, AccessSolutions, which it customizes to fit clients’ needs. The systems’ medical claim forms are fairly standard within the payer requirements. But AccessSolutions also includes a comprehensive set of modules for management and administrative tasks, ranging from appointment scheduling and patient registration, to billing and accounts receivable, to referrals and management reports.

“A lot of people think they can just automate these processes, and that will take care of the problem,” says Janko. “Billing and collection is not very sexy stuff. It’s very detailed, very mundane and very much step-by-step. But then they are surprised at the number of things that go wrong. There’s a whole host of issues involved that need to be managed.”

“Where we’re different from our competitors,” explains Janko, “is that we ensure our clients’ workflow and the systems match. The staff and the physicians need to be trained on what they need to do at the front end of the process – otherwise, there’s a disconnect, and the billing process can’t succeed.”

That workflow training includes such matters as obtaining the requisite information from an incoming phone call to schedule an appointment. Whether the caller is a new patient or an existing patient triggers a set of processes that need to happen while the caller is still on the phone. “And if the patient has managed care insurance,” says Janko, “there is a whole host of decisions that must be made in the first 30 seconds of that call. For instance, if you are not the primary care physician, and your staff makes an appointment for that new patient, you are never going to get paid. Or, if you are in a specialty practice and the managed care payer requires referrals, you need to know who made the referral and what it was for. If the referral was for a consult and you do a procedure, you are not going to get paid for doing the procedure.”

Accuracy on the front end is essential for Access Partners, whose compensation includes a percentage of the cash collection for its clients. “If we don’t ensure those front-end business processes are working well, we – along with the doctor – are going to be working for nothing,” states Janko.

Unlike typical billing services, Access Partners gives the medical practice the unique training foundation it needs to be able to run itself properly.

“The question we always ask medical practice managers and physicians when we first meet them is, ‘How do you know that you billed for everything that you did?” Janko continues, “The answer often is that they really have no idea.”

Where necessary, training includes meeting separately with the physicians, away from their staff, to communicate what ever they are doing that interferes with the workflow and successful results. They focus on the problems in a positive manner, without fingerpointing.

It’s Also About Management

Access operates from an open-book approach. “What’s on our desktop is also on our clients’ desktops,” states Janko. They use a private, secure, managed WAN for communications with clients, rather than the Internet.

The open book access gives the medical practices tremendous knowledge and control over what’s happening with their patient accounts, which is an especially attractive management feature. Robin DiDiego is practice administrator at Retina Specialists of Boston and oversees all business functions for the practice’s 13 locations throughout Massachusetts. She explains that the organization had been using a billing system vendor for four years prior to outsourcing to Access but was even considering bringing the billing and collections back in-house in order to get more control.

“We send out thousands and thousands of bills. And I was having to do too much work just trying to figure out what the vendor was doing and what was happening to our patient accounts,” says DiDiego. “I needed more control, especially in the appeals. With Access, we can go online and see exactly what is happening if a patient calls us.”

It’s About Efficiency

As Access Partners grew, it started drowning in its own paperwork in the production of about 15,000 monthly patient statements for its clients. And the number keeps growing.

That billing process is now outsourced from Access to Payformance Corporation, an industry leader in transforming inefficient paper payment processes to automated solutions. The process is secure, adhering to the encryption standards required by law. Where necessary for small payers that have not converted to electronic processes, the outsourcer is working with Access to produce paper statements.

“Instead of the process consuming a lot of our people at Access to print the bills, stuff envelopes, apply postage, and go to the post office, we now have a guy who – while he eats his tuna sandwich – twice a week presses some buttons, and everything goes out the door. End of story,” Janko says. Access employees formerly assigned to patient statements now support more critical core initiatives.

Best of all, the Access clients are happier. “We now have a better-looking statement with more information on it, provided to our clients at the same cost they were already paying,” adds Janko.

Access products and solutions are available nationwide in the U.S. to licensed end users (who also receive training on workflow and business procedures as well as how to support the system). The system and support also are available on an ASP basis for a flat rate (with percentage, where billing/collection processes are turned over to Access). The ASP solution currently is available only in the New England region, but the company is establishing additional regional hubs nationwide this year.

Outsourcing can make a strategic impact on an organization that is far greater than a focus on costs. Access studied the results for improvement in revenue per-patient-encounter at one Access client, with a two-year period showing an increase of 13 percent revenue (with the same volume of business). Of even more significance, though, outsourcing allowed the physicians at that organization to hire a third physician so they could grow the practice.

Lessons from the Outsourcing Journal:

  • Medical practices that outsource their back-office billing and collections processes can realize a significant savings in turnaround time and operational costs, as well as an increase in revenue.
  • A service provider also can outsource to another service provider in order to achieve better capabilities at lower costs to the first outsourcer’s clients.
  • Simply automating a back-office business process may not achieve the desired results unless the office also reengineers the workflow of the front-end processes.

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