No one likes “shrinkage.”
No one wants to be "short changed."
I’m not talking about the classic Seinfeld scene where the term “shrinkage” was coined and George is unfortunately misunderstood. I’m talking about “claims shrinkage.” You send out a claim form, after providing services to your patient, with a healthy reimbursement only to wait months to receive a small portion of the claim. This often leaves us feeling “wanting.”
Here are a few ways to minimize your “claim shrinkage:”
1. Don’t wait! Every day counts.
How long does it take to get your claim submitted after providing service? These delays are 1 for 1 delays on the back end. The faster you can get your “dates of service” processed and claims submitted, the faster you get YOUR MONEY back in YOUR POCKET. This can help you avoid financing charges, build and sustain your business, but more importantly increase your bottom line.
2. Do it right, the first time.
Pay attention to your “FPRR.” Are your claims surviving the claims scrubbing process, clearinghouse, and subsequent payor claim scrubber the first time? Are they getting rejected, just to lose days or weeks while they are re-submitted with fingers crossed? We call this the First Pass Resolution Rate and nothing less than an A+ should be acceptable.
3. Incorrect codes and/or levels of care.
Without a verification of benefits, pre-authorizations, and a clear understanding of client benefits coverage, it can be easy to provide care in excess of the patients umbrella of protection. It can be frustrating to see your RTC service get reduced to a PHP or IOP care, or even worse, denial. It is essential to understand a client benefit coverage and then bill accurately and accordingly. Old codes, accurate e/m codes, medical necessity, modifiers, and missed charges are all potential pitfalls.
4. Inaccurate support documentation.
Is there a track record in the patient medical record for every date of service? Is the service provided appropriate to the level of care and billing code submitted? These are easy red flags for payors to look for in an effort to reduce reimbursement or deny altogether.
5. Claims follow up.
In many cases, a denial is really just a payor’s procedural policy, a request for more information, or an attempt to shirk responsibility. Without consistent and accurate claims follow-up, these kinds of denials can result in delays, “shrinkage,” or even complete loss or re-imbursement. Your staff or your billing party should have a schedule and tracking system for following up on every claim no less than every two weeks.
6. Payment audits.
A regularly occurring practice by payors is to provide payment at a level far below industry, facility, or even their own average reimbursement rate. Too often, this is accepted as payment, the claim is closed and the provider moves on to the next patient. Who is double checking the rate of payment comparison? While this can fluctuate from payor to payor, region to region, and from facility to facility, anything less than an average reimbursement should be questioned if not appealed.
7. Industry reimbursement decline.
“Payors are getting smart and reimbursements are on the decline.” While this may be accurate in some instances, it is certainly an excuse. You either need to push for maximum reimbursement or you need an advocate that will do so for you.
8. Out of Network vs. In Network.
“We are out of network so we just don’t get paid as much.” Again, this may or may not be the case. We actually see cases where out of network providers are reimbursed at higher rates than in network/contract providers. Don’t let this excuse lead to “shrinkage.”
9. Client responsibility / deductibles.
Client responsibility or deductibles can often turn into an accounts receivable nightmare. Accurate verification of benefits prior to service can help support your ability to assess a patient’s ability and willingness to cover their responsibility. While you may want to help everyone you can, your business can not survive without reimbursement and this can put your entire practice at risk.
10. Filing deadlines.
While filing deadlines are often a year, they are consistently 120 days or 6 months, especially for out of network providers. There is no excuse why you should ever have your claims impacted by a filing deadline. This form of “shrinkage” is completely avoidable and when it occurs, total reimbursement goes to zero.
These are all common mistakes that lead to “shrinkage” in reimbursement for top level care provided to your clients for life changing support. Whether you bill in house or with a third party, don’t make these mistakes!
We would be happy to help “Illuminate” any issues you have in your billing processes. For a free and easy needs audit, please reach out soon.
Sincerely, CONTACT NOW!
Curt Neider, CPB
CEO – Illuminate Billing Advocates