CLEARINGHOUSES: CONSIDER "PRICE" VS. "COST"
By Todd C. Woods

Most physician practices rely upon clearinghouses when submitting claims to various payers – Medicare, Medicaid and a wide range of commercial insurers.

And, in the budget-conscious world of healthcare, a large number of practices choose their clearinghouse solely based on its monthly fee schedule. Some opt for free claims submission services that act merely as a pipeline or conduit from practice to payer. While appearing to be an inexpensive option, these services may compound
costs in other areas. One group of 11 physicians, for instance, was forced to retain 17 individuals on its billing staff to work claims, appeals and collections. Other practices award their claims processing to the lowest bidder, sometimes gaining access to limited claims editing or basic archaic reporting functions.

More and more, however, practices are examining these approaches and asking themselves if management of the revenue stream is an area where they want to cut costs. Instead, they are examining the concepts of “price” versus “cost,” and selecting a clearinghouse based on the value it can offer over the long-term.

These forward-thinking practices are discovering that for an extra $50-$100 per month – the cost, typically, of one physician’s monthly cell phone bill – they can subscribe to comprehensive revenue cycle management services that pay for themselves many times over. These options typically check claims against a wide range of payer edits (e.g., national CCI edits, state or regional edits, and payerspecific edits), provide real-time access to claims and payment status, confirm that medical necessity restrictions have been met, accommodate electronic remittance posting, provide secondary claims submission, and support comprehensive analysis and reporting functionality.

The benefits of this extra investment are significant. Scrubbing all claims prior to submission means the practice experiences fewer denials and devotes less time to appeals. Clean claims also move through the payer’s system more quickly, which enhances the revenue stream and reduces the days a claim remains in A/R. One of
our subscribers, for instance, saw its A/R rate drop from 70 days to about 20 days over a period of a few months.

Likewise, the ability to review claims status in real-time gives practices the opportunity to identify potential problems immediately and make corrections – again, ensuring that claims are processed more quickly. In addition, comprehensive reporting tools allow a practice to identify patterns that might be compromising
revenue potential. For instance, a particular provider might be overlooking ICD-9 requirements for a specific procedure, or another might be consistently under-coding E/M services. Claims data analysis draws attention to these trends, and presents an opportunity to redirect providers, coders and billing staff.

Plus, the availability of electronic remittance advice (ERAs) can save substantial amounts of time and money. A practice that currently relies upon four staff members to post remittance, for instance, may be able to eliminate three of these positions (for savings upwards of $100,000) or redeploy these individuals into other areas.

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