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Using Technology to Speed Up Payment

Welcome! This article is part of a Medscape Physician Business Academy course, . Visit the Course Page to take the full course and receive a certificate.

The Most Effective Ways to Get Paid

A Brief History

Technology has come somewhat late to the healthcare industry. Much of that is due to the great number of small medical practices and the prior reluctance of many physicians to embrace technology. Consumers have long been able to go to a retail store, use their credit card, and have their purchase approved immediately, and the funds appear in the store's bank account the next day; in contrast, this is not a common scenario in a medical office.

The technology for instant processing of claims, so that the patient knows what his or her portion of the bill will be and the practice receives the funds the next day, has been possible for the past 15 years at least. However, adoption has been slow. Insurance companies had large, unwieldy systems that often were combined during mergers, among other factors, and they were reluctant to do the necessary overhaul to make the process of paying out claims quicker. They had no incentive to pay out their funds faster when interest rates were higher than 2%.

Physicians, for their part, were largely resistant to electronic health records (EHRs) and billing and did not move to technology in a big way until the government mandated it in 2009. However, the federal financial reward for moving to EHRs is over. We are now entering the period of financial penalty, and the transition to technology is in full swing.

Although the move to technology is not the solution to all collection issues in a medical practice, if a group understands that having procedures and systems in place to support the efficient use of the technology is crucial, they will benefit from increased speed and collections of claims.

The Ideal Practice Management System

The core of a medical office's technology is the practice management system. Any practice management system needs to be able to automate the following tasks:

  • Verification of insurance eligibility and benefit coverage. This process needs to be done in the background several days to 1 week before the patient arrives for the appointment, so that any issues can be resolved before the patient presents in the office.

  • Acceptance and filing of scanned images. The practice management system should be able to access scanned images, such as a patient's driver's license or insurance card, so that information will be available in multiple locations other than a paper record.

  • Charge capture. Billing codes should be communicated directly from the EHR to the practice management system so that the bill is ready to file as soon as the physician completes the chart note. Ideally, this should be done at the completion of the visit either by the physician or by a scribe. The key is to eliminate manual data review by a coder and, ultimately, data entry by a clerk, which slows the process down by days and can cost thousands of dollars of staff time each week in addition to creating opportunities for errors.

Billing codes should be communicated directly from the EHR to the practice management system.
  • Claims clearinghouse. Clearinghouses have become much more of a partner to a physician office and now routinely scrub claims, identifying coding and documentation errors. Many can also offer real-time claims adjudication so that a practice can accurately inform the patient how much their portion of the bill will be and arrange for payment before the patient leaves the office.

  • Contract rate monitoring. As previously discussed, many practice management software systems will produce a report that compares the payment allowed on a claim with the contracted rate. These data support the appeal process, and reports over time provide the practice with valuable data when renegotiating the contract.

  • Electronic remittance posting. More and more payers are paying through electronic data interchange, where the funds are deposited directly in the practice's bank account. The explanation of benefits for each payment is then transmitted electronically and should be able to be uploaded into the practice management system, so that manual data entry of payments is eliminated.

  • Credit card processing. The practice management system should be able to interface with the practice's credit card processing provider, so that payment can be accepted at the desk or over the phone through the practice management system and be posted to the patient's account at the same time.

  • Payment plan processing. The practice management system should be able to store credit cards securely and automatically process payments from those credit cards in accordance with payment plans set up—for example, an agreement that $50 will be charged on a patient's card the 10th of every month until the balance of $500 is paid. This process should be automatic once it is set up in the system and not require staff time other than to monitor payments processed or change agreements when required.

  • Patient portals. While not a part of a practice management system, it's wise to give patients the ability to access your practice's site and their accounts via the Internet. This can help with communication and also give you the ability to provide statement updates electronically.

  • Acceptance of online payments. The practice management system should work with the EHR so that it can be integrated with the patient portal and accept online patient payments from the practice's website.

  • Patient education and notification. The practice management system should work with the EHR so that regular automatic notifications of outstanding balances and copays required for appointments are included in email or text message notifications about upcoming appointments. In addition, patient statements should be able to be sent via email as well as regular mail and be set up to send or print automatically on the basis of a predetermined set of conditions. Incoming questions about billing issues from the patient portal should be attached to the patient's electronic account, and notification that a message was received should be issued to the practice administrator.

Patient statements should be able to be sent via email as well as regular mail.
The Challenge Ahead

Even if your practice has the best practice management system on the market, there are challenges to making it work in the most efficient manner possible. With today's shrinking margins and growing regulation, using technology to your best advantage will be important.

The central challenge to making technology work properly is the efficiency of human interaction with the system. Listed below are some of the issues to consider:

  • Are all data entered into the system correctly? When patients schedule appointments and are registered in the system, are all of the data correct, or were there data entry errors?

  • Are all procedures being followed in a timely manner? When patients reach the office, is there a line at the desk, so that the patient's balance isn't checked and communicated when they check in?

  • Is the physician engaged in the process? Are charts being completed during the visit? Does the physician or his or her assistant code the visit immediately?

  • Is there a means of keeping the process efficient when the physician is out of the office at the hospital or other location?

  • Do exceptions and denials get followed up immediately, or put into a "when I can get to it" stack?

This list is not comprehensive, but the concept works with any technology. Look at what isn't working with the ease intended, and find out where the process is getting stuck. Make sure that each person in the practice is aware of the importance of their function in the practice's ultimate success, and retrain them on the process if necessary.

The final challenge for a medical practice is to stay abreast of changes and improvements in the market. Be open to change. Adopt new technologies as they develop. We are in the middle of the transition to technology for this industry. This decade and the next will bring much more change, and the early adopters generally are the highest collectors.

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Welcome! This article is part of a Medscape Physician Business Academy course, . Visit the Course Page to take the full course and receive a certificate.


Judith N. Aburmishan, MBA, CPA, CHBC

| Disclosures | January 01, 2016

Authors and Disclosures


Judith N. Aburmishan, MBA, CPA, CHBC

Director, FGMK, LLC, Bannockburn, Illinois

Disclosure: Judith N. Aburmishan, MBA, CPA, CHBC, has disclosed no relevant financial relationships.