This is an excerpt from our ebook, “The Hidden Cost of Payment Variance: How to Stop Underpayments From Undermining Your Practice.” Get the ebook free here.
Keep lost revenue and lost time from compounding.
Once an insurance payer handles your claim, your staff has already invested hours in the billing process—from verifying coverage before treatment to monitoring adjudication after a claim is submitted. Every claim that comes back underpaid represents not only lost revenue but lost time.
Streamline Your Review & Appeals Processes
Because most states give payers 30–45 days to pay claims, you could wait over a month for payment, only to realize you were underpaid. To keep lost revenue and lost time from compounding, it’s critical that you identify and resolve underpayments as quickly as possible.
Here are five ways to streamline your review and appeals processes so you can maximize the speed and accuracy of payments:
1. Set up a cadence for timely review of all payments.
You can’t bill patients for their responsibility until you verify that their insurance company has paid the correct amount. That’s why you need to review all payments as you receive them. To do so, you need automation tools to cross-check the contract terms, fee schedules, and explanation of benefits against every line item in your claims.
2. Convert 835 remittance files into a readable format.
Leverage your automation system to make reviewing your 835 transaction data easier. The 835 (healthcare claim payment and remittance advice) provides an explanation of benefits, including how much was paid, denied, reduced, bundled, split, covered by other payers (including the patient), and how payment was made.
3. Group procedure codes and modifiers that cause underpayment.
Rather than approaching each case of payment variance as a one-off issue, drill down into your claims data to identify patterns. For example, if you find that claims with certain procedure codes or modifiers are frequently underpaid by one payer, check payments from other payers for the same mistakes.
4. Segment payers and monitor their performance.
Prepare, submit, and review claims from each individual payer in batches. That way, you can identify recurring mistakes—such as mis-credentialed providers or old fee schedules. If a payer routinely underpays, contact your rep to request that mistakes be corrected right away. And, when it’s time to renegotiate your contract, leverage this “hassle factor” to make your case for more favorable terms.
5. Submit appeals on time and through the right channels.
Keep track of each payer’s timeline and process for appeals so you can respond quickly when your review process uncovers payment variance. If you take too long to identify an underpayment, you risk losing your chance to appeal—and your cash.
Bill Patients Right the First Time
When payers adjudicate claims incorrectly, your practice and your patients experience a “trickle down effect.” First, the wrong payment is posted to a patient’s account, then the patient is billed for the wrong amount (usually more than they actually owe), then your practice has to send a new bill and explain the mistake.
Even if these errors are corrected quickly, getting multiple billing statements—and learning they were overcharged—can cause confusion, frustration, and dissatisfaction for otherwise happy patients. The best way to avoid this scenario is to identify underpayments and resolve appeals before you bill.
Appeal Before You Bill
From a collections standpoint, it’s best to make billing as simple as possible. Your patients shouldn’t have to understand allowables or payment variance just to pay their bill.
The key reason for identifying and resolving underpayments quickly is so you can bill patients right the first time—after you receive the correct insurance adjudication.
To learn more about how to identify and resolve payment variance, download our ebook, “The Hidden Cost of Payment Variance: How to Stop Underpayments From Undermining Your Practice.”
