The sample case study below highlights the challenges of getting paid for healthcare delivery. It also offers a solution to the problem.
Getting Paid for Healthcare Delivery
A Sample Case Study
The hornet’s nest of payment and insurance reimbursement for healthcare offers a lot of ways to get stung. The pain inflicted on Bones & Joints Orthopedists had become unbearable and, after four years in business, was threatening their survival. Searching for relief, the COO turned to Medical Billing Solutions (MBS) for advice.
Founded in 2012, Bones & Joints Orthopedists (B&J) is a privately held company that operates 4 outpatient orthopedic clinics in the Syracuse, NY, area.
Two years ago, the clinics were generating about $15.5M annually with a profit margin of 10% of gross revenue. B&J employs 6 board-certified orthopedists full-time, 8 advanced practice providers (PAs/APRNs) trained in orthopedics, 16 medical assistants full-time and part-time, 5 management-level officers, and a chief medical officer/owner.
The company would like to expand into the Rome/Utica area but has been unable to do so because gross revenue began to decline during the past couple of years.
Google ratings also dropped from a regular 4.7 stars to 3.5; Net Promoter Scores for individual providers remain high at an average of 84 (national average: 73). Patient complaints have risen to the point where they impede the ability of staff to handle day-to-day operations. Most complaints have centered on insurance and billing issues.
When Dan Erskine, the COO, first contacted MBS, he was perplexed about how to describe his problem.
“Our declining revenue does not appear to be associated with patients’ dissatisfaction with their clinical treatment. We’ve known for some time that much of the difficulty stems from our front desk operations. Our people are making too many data entry errors regarding basic patient information and insurance, and that messes up the billing on the other end. Too many claims are declined, and that pushes accounts receivable into the 60-90 day range. I’m at my wit’s end.”
Ken Savage, MBS’s client liaison officer, suggested a few days of site visits to observe operations and to interview key employees. His report revealed the following difficulties:
- Front desk personnel appeared to be overwhelmed and reported high levels of stress and job dissatisfaction. Manual entry of patient information into the electronic health record (EHR) and separately into the insurance clearinghouse database resulted in directly observed clerical errors. Discrepancies were causing claims to be denied by insurance carriers. Intake procedures were rushed to the point that complete insurance information was omitted from patients’ records.
- The high level of phone interruptions involving scheduling of appointments and patient complaints caused breakdowns of basic phone etiquette and personal interactions with patients. Staff couldn’t keep up, and tempers flared.
- On the back end, the billing office was similarly overwhelmed by the number of declined claims that resulted from data entry errors. Correction and resubmission of claims consumed so much time that responding to patient questions and complaints lagged. Unfortunately, merely trying to cope with the situation led to an increasing number of write-offs of pending claims that cost the company in lost revenue. Blaming the front desk didn’t help with staff morale.
MBS proposed measures that would accomplish three major objectives: (1) reduce data entry errors to almost none, (2) professionalize operations so as to improve staff morale and reduce patient complaints, and (3) increase the number of positive patient reviews and gross revenue over time. As Ken remarked to Dan,
“We can help with the billing issues, but that’s just the beginning. Revenue has been declining because of patients’ dissatisfaction due to poor staff morale and deteriorating customer service. We need to address that as well.”
MBS proposed the following actions that J&B accepted and implemented:
- J&B retained a new insurance clearinghouse firm that could interface seamlessly with J&B’s EHR company. This eliminated a second data entry step since patient and claims information could be entered simultaneously in the EHR and the clearinghouse’s databases.
- Similarly, J&B installed different credit/debit card readers that would automatically post payments directly into a patient’s record and the clearinghouse’s database. This eliminated manual entry of payment information.
- J&B accepted MBS’s offer to handle all billing operations, including managing insurance claims, providing alternate ways for patients to pay their bill, credentialing all clinical providers for insurance carriers (including Medicare/Medicaid), and responding to patients’ questions or complaints.
Implementing MBS’s recommendations did not happen overnight or without challenges. Changing insurance clearinghouse and credit/debit card processors took 4 months. Another 3 months were consumed in cleaning up improper or missing provider credentials with insurance carriers.
And finally, moving the billing operation to an outside vendor created staff dislocations.
Nevertheless, as Dan Erskine reported 18 months later,
“MBS was great. They didn’t confine their attention simply to billing issues, but took the time to analyze the big picture. They held our hand at every step. Their training program, for instance, resulted in less stress for our front desk people and boosted morale big time.”
After 18 months, J&B’s patient satisfaction scores improved, earning 4.3 stars on Google. The number of patient complaints plummeted, and annual revenue has increased to $17.2M. Overall, B&J is much healthier and is experiencing much less pain. A success story worth repeating.