The Rx for HME Billing Headaches
Chasing payments is a pain. Billing services can bring relief.
- By Holly J. Wagner
- Oct 01, 2019
You’ve probably helped thousands of people get rid of their headaches. Billing service providers want to help you get rid of yours.
“Nobody got into DME because they really like codes and modifiers,” says Joey Graham, General Manager of Prochant. Michelle Tohill, director of Support & Revenue Cycle Management at Bonafide, cites an American Medical Association survey that estimated medical offices waste about $14,600 a year on rectifying denied claims through appeals, phone calls, and troubleshooting. Add to that any amounts that go uncollected and…Ouch!
Billing services may be the pain reliever you’ve seen on the shelf, but keep walking past and go on with what you’ve been doing. Maybe you think they cost too much, or your pain isn’t really that bad, or it will just go away on its own.
Most likely, none of those things are true: If you’re thinking about it, the pain is that bad. It won’t resolve itself and the cost you fear is probably well worth the benefits.
You just have to hold your nose and take your medicine.
TAKE YOUR BUSINESS TEMPERATURE
What are your symptoms? If the answer is bursting file cabinets, stacks of unpaid invoices, humming FAX machines or business software that’s managing you instead of the other way around – or all of the above – it’s time. Experts cite three main symptoms that tell you to call a professional:
Staff -- Billing tasks are not clearly defined or assigned; or the person managing billing isn’t properly trained or communicating effectively with management; or an in-house billing specialist is just more than you can afford.
Overdue invoices – Your invoices past 30 days are piling up, or blowing past 30 days to 60, 90 or even 120 days; or your insurance payments are current but co-pays are lagging.
Claims Denials – increasing frequency and/or reasons for denied claims; risks to accreditation.
“There’s a lot of different payers out there. Depending on what state they are in or multiple states, depending where
their approvals are coming in, there’s significant
complexities of the documentation requirements.
Those are the front end areas that ensure
clean claims to begin with,” says Phil Socoloff,
senior vice president of Brightree Services. “If
you can address clean claims on the front end,
you will reduce your problems on the back end.”
Maybe you’re so focused on your core
strengths that you trust someone else to do the
egghead stuff, and it may not be getting done
as well as you think.
“Prior to reaching out they think they know, or
that people who are doing it know. When they
aren’t liking what they are seeing, they go back
in time and look at more numbers. Then they
see a problem,” says Terri Minnich, owner of A
Perfect Billing Service.
Your assessment of your business will be the
basis for your early conversations with billing
services. They will also want access to your business
data so they can analyze your workflow and
make specific recommendations.
“We will do an analyzation to see what are
they getting denials on, what are they writing off,
what are they billing, how much are they actually
collecting – whatever they say, we know that
it’s going to be less. They are confusing what
they are billing and what they are collecting,
because there is always a huge variable in those
numbers,” Minnich says. “A lot of times they
have an absolute disconnect. They are relying
on whoever is doing their billing for that information.
They are so busy with what they do and
their world that they are relying, a lot of times,
on people who aren’t watching numbers. They’re
just sending stuff out the door and doing their
best to keep up with the documentation.”
EVALUATE YOUR OPTIONS
Choosing a billing service is a bit like choosing a
medical professional. You don’t go to a surgeon
for an allergy, right? Billing service options range
from small, independent services that work
mainly with small clients to huge corporations
that have the bandwidth to work with large,
regional and national DME providers.
Even the industry can’t agree on specific delineations,
but in general a DME billing less than
$3 million a year is small, $3 million to $8 million
is medium, and over $8 million is large. There’s a
lot of wiggle room in those strata so it’s best to
ask each provider.
“There are services that specialize in different
size DME providers. First find the companies that
work with companies like you,” advises Graham. “There are a lot of small billing companies that
focus on small DMEs. They are a little more
expensive, but very high-touch. They really do a
lot and they are a great fit for those companies.”
There are also services that focus on different
DME categories. In general, Graham says, look
for someone with “a deep understanding of your
payer and product mix.”
Fortunately, the medical billing industry is
a highly networked web of partnerships and
contacts that can help you find the right fit. If you
contact a company that doesn’t serve DMEs your
size, or offer the services you need, or work with
your software, there’s a good chance they can
refer you to someone who does.
“My main partners are the software systems
that provide billing software. Depending what
billing software the provider is using to do their
billing, I will direct them to a billing service
company that is familiar and uses that software,”
says Bruce Gehring, senior vice president of
Business Development at Allegiance Group.
“You have to have a certain amount of expertise
on the software.”
One reason for that is reporting capabilities.
All of the billing providers stress the importance
of using software that lets you pull up a variety of
reports to help flag specific problems and drill in
to your work flows, so you can adjust processes
to be more efficient.
“What we usually see with the small providers,
they come on and they aren’t looking at the data
within their system. A lot of resources and time
tend to be spent getting that claim out the door,
and working that claim maybe the first time,
but they lose sight of all those invoices that are
aging, getting into that 90-day, 120-day range.
They have to keep up with what is coming in
new as well as keeping up with what’s old,” says
Sunil Krishnan, vice president, Global Operations
and Analytics, Revenue Cycle Management at
Brightree Services. “Part of that struggle is just access to data and looking at data the right way. If you are still putting it in
Excel line item by line item, it’s not going to work.“
If you’re running business software you’re happy with, your software
provider is a good place to start looking for billing services. Companies
like Brightree, Bonafide and WellSky offer billing services as well as software,
and their account reps are likely to be most knowledgeable on their
softwares’ capabilities. The system you have may do analytical tricks you
don’t even know about or know how to use.
If you’re looking for new software, that’s also a good time to consider
contracting billing assistance. Many software providers unapologetically
offer business services only to clients running their software.
“We exclusively work within the Brightree system. We believe we bring a
level of expertise in the Brightree system that is difficult to compete with,”
Likewise, “We prefer to work with our software, because there is no
other method that makes it so easy for DME providers to see inside the
billing process and understand exactly what is going on,” says Tohill.
Bonafide provides its software with a minimum level of monthly billed
revenue services, a setup that might be attractive for a DME who’s still
using paper records or is looking for a change in business software. “We
work with new clients to ensure the transition (if necessary) is smooth and
minimally disruptive,” Tohill adds.
There are exceptions, but the billing software providers’ ultimate goal
often is to get you on board with their software. “We feel strongly that
there should be a number of doors where people come into our products
and services, that another way that we can demonstrate value to the
marketplace is by helping them with the revenue cycle,” says Tim Ashe,
WellSky Chief Clinical Officer and Fazzi president. “Over time we strongly
believe our software applications and solutions are best-in-class, so there
is an opportunity to benefit from services and technology.”
That said, WellSky tries to accommodate as much or as little as a client
needs: “There is some real benefit to having an outside set of eyes looking
at the revenue cycle picture,” Ashe says. “Even if they don’t want to
outsource or aren’t in need of outsourcing, there’s a lot of opportunity to
create efficiencies and improve cash flow by seeking some expertise from
someone like WellSky.”
Whether independent or software-aligned, billing services also range
from full-service shops that manage all of your revenue from authorizations
to payments, to more specialized niche providers that focus exclusively
on third-party payers, overdue accounts or patient collections. For large
clients, some even offer call center services.
RX 1: REVENUE CYCLE MANAGEMENT
Not surprisingly, full-service billing services recommend outsourcing when
your business is healthy, not just when you’re feeling pain. There’s a strong
argument for that: much like law, billing takes specialized expertise that
may be difficult to find, train, support or retain on a small DME staff.
Think of Revenue Cycle Management (RCM) as the balm you rub into
your business’ joints every day to keep it moving. You contract with
a service that will manage just about every aspect of your billing and
payments. It’s a continuous treatment that keeps your business healthy by
monitoring and managing critical indicators.
“To ensure cash flow and ongoing profitability, DME providers must
have consistent, high levels of reimbursement. This only happens when
the billing team is submitting claims in a timely manner, following up on
every claim, minimizing claim denials, and never forgetting about a claim,
Tohill says. “This is where we excel. Our service, coupled with our software,
makes it possible for DME providers to maximize their reimbursement
A company that takes over your RCM will want to be involved in billing
from the get-go. Early in your relationship they might have to do some
cleanup on past-dues, but the goal is always to keep claims squeaky clean
and current. That will probably mean changing a few of the front-end
processes. The sooner that starts, the faster you’ll see improvements.
RX 2: THIRD-PARTY ACCOUNTS RECEIVABLE
If you’re comfortable with the day-to-day operation of your business but
need someone else to chase down unpaid or denied claims, there are
services that specialize in A/R from third-party payers. Their services are
like having an in-house claims manager to manage Medicare and insurance
billing and follow up on denials and documentation.
“We outsource DME processes. There’s about 30 different processes,
they run the gamut from working the A/R, working denials, posting the
cash, processing new orders, working the front-end denials,” says Graham.
Prochant, which specializes in third-party billing, also extends advice to
front office processes like intake, eligibility and prior authorization. Sorting
out what ails your business is likely to expose some office process dysfunction
that’s gumming up the works downstream. Working with a billing
provider can force you to establish or formalize processes that may seem
like a mystery today.
The general theory of RCM is doing everything right from the beginning.
One common problem for DMEs is tasks that get set aside for the
mythical light afternoon, creating an endless pile of overdue receivables
and denied claims.
“There is a new thing we are seeing lately with one insurer we’re working
with: They switch up the denial. They are denying for a completely invalid
reason. Once you figure out how to fix that denial, they start creating
a new denial. Nobody knows what that denial is, even at the insurance
company…They’re just trying to delay you getting paid. They won’t offer
you any further advice,” Minnich explains. “If you are a small mom-and-pop
DME and your biller has 20 jobs she has to do in a day, if she calls and
gets that she’ll say, ‘I’ll get back to that later.’ When does she get back to that later? How many claims later are we creating
that? What the insurance company is hoping is
that you won’t get back to it.”
“A lot of what we come across is companies
that do not have finalized escalation procedures.
They have processes that never come to conclusion
if things don’t go right,” Graham says. He
uses the example of a prescription that is out
for signature from the doctor, but after several
efforts it still never arrives. “The provider throws
up their hands and moves on. Nobody ever
wants to pull the trigger on making a decision.”
Like Prochant, WellSky and A Perfect Billing
Service, many billing services do only public
and insurance payer management, so you can
choose a service to manage institutional billing
but deal with your patients personally.
“We process the payment up to the patient,
then the provider handles that. A lot of that is
tied to referral sources and we don’t want to
make any referral sources mad,” says Minnich.
“The patient portion is dealing with a whole
different set of rules – you are basically a collection
agency. The DME provider has the relationship
with the patient. We explain it to the
provider and they explain it to the patient.”
One encouraging hint she offers for dealing
with tardy patient payments: “A lot of times it
improves collections 70 percent to 80 percent
just calling them.”
If you prefer to have a service do patient
collections, services like Allegiance Group focus
exclusively on patient pay, others like Brightree
Services have divisions that do.
RX 3: PATIENT PAY PAINS
This may be a shock treatment. Maybe you
got started in DME in the Golden Commode
era, when you could let a patient co-pay slide,
but now you have to tell longtime customers
to pay up.
‘The whole attitude about ‘don’t worry about
the co-pay’ – now the co-pays are what you
have to collect because of the high deductibles
that are out there,” Gehring says. “Because of
the reimbursements, the reality to the provider
is the profit that they have in that product is in
the patient pay.”
And yet, “Patient pay is probably the last
priority on the list of things to do. [DMEs] are
looking at ‘if I don’t get paid by the insurer,
there’s no business.’ So they are focused on payers and contracts and submitting claims,
getting all that done so they can get the 80
percent covered, then worry about the patient
pay,” Gehring says.
It’s often a difficult conversation, but one your
billing service can help with. “They’ve got to be
able to help the patient almost from a financial
planning standpoint.” Gehring notes. “People
understand that if providers are not getting
paid for the equipment or service they are
providing…they will go out of business.”
At the beginning, you will have to invest a little
time and effort into finding the right billing
provider, getting them access to your records and
transitioning your system and work flows. Often
that means a flurry of activity the beginning, a
break, then another flurry of activity taking the new
Most billing services can be up and running
within 60 days of starting your contract, and
often the startup time is significantly less. Like
everything else, it will depend on the services
you choose and how your software conforms
to the billing provider. You’ll probably have
to update a few processes, but in general the
new procedures will save time and hassles in
the long run. Your business will get more efficient
and have more current and predictable
COST OF TREATMENT
One thing most outsourced billing services
have in common: They don’t get paid until you
get paid. Most work for a percentage of money
collected. “It’s a win-win because the DME has
fewer past-due invoices and improved cash flow
from a system that incentivizes resolving issues,”
There are lots of variations depending on
the services contracted. Some services charge
a small up-front fee (often delayed until the
first service billing), and others offer a flat fee
per invoice collected. The fees will depend on
whether the services are for current or overdue
accounts, the payment source and how long
payments have been outstanding.
“If it goes over 90 days, the likelihood of it
getting collection is about 40 percent,” says
Gehring. That alone should be enough to make
any DME with past-due accounts consider
getting some help, before billing problems
This article originally appeared in the October 2019 issue of HME Business.