Surgeon’s role in the revenue cycle: A blueprint for young surgeons
Whether a physician’s compensation is tied directly to productivity or collections, or is indirectly influenced by the overall financial sustainability of the practice or the hospital, the physician’s paycheck depends on the employer getting paid for the patients who are treated. Surgeons new in practice often do not understand the interrelated aspects of how the practice bills and collects for these services. This article explains how the revenue cycle works and the key areas that require physician involvement. A glossary of common revenue cycle terms is included.
In short, the revenue cycle consists of all the steps required to get the surgeon paid. The diagram herein illustrates these steps.
There are many parties involved in the revenue cycle, not just the billing department. Everyone in the practice has a role to play, including the surgeon. Without collecting the right information prior to a patient appointment, front desk staff will not know whether patients are eligible for coverage or how much to collect. Without the right documentation details, staff cannot accurately bill for the surgeon’s work. And, if the surgeon tells the patient, “Do not worry about the bill,” well, then it has just become harder for the team to collect.
Starts at the front-end
The revenue cycle starts with the patient’s first contact with the practice, which is usually on the phone. Complete and accurate registration is critical. The receptionist or in-take coordinator must capture correct insurance information and enter it into the practice management system (PMS). Then, he or she performs an on-demand eligibility check to confirm the patient’s insurance plan is active. This is an electronic request sent to the insurance payer for plan information. The payer’s response indicates if the insurance plan is active and gives benefit information, such as copay, deductible and co-insurance amounts.
In many practices, the front-end staff have busy, demanding jobs that include constant interruption and distractions. Often, they are thrust into the position with little to no training. Not surprisingly, mistakes happen, which can cause delays in payment or sometimes denials that result in non-payment. Investing in employee training and orientation will reduce costly errors. Modern practices also use front-end errors as teaching opportunities. Front desk staff is required to fix their own errors, guided by the billing team. This identifies training needs and reduces error rates with time.
Time of service collections
It is standard practice to collect copays at check-in, prior to the patient seeing the physician. To do this, patients must be fully registered prior to an appointment. This means staff enters insurance information into the PMS, checks eligibility and then enters benefit information into the patient’s account.
To collect the remainder of the patient’s financial responsibility in the office requires that staff have the current procedural terminology (CPT) codes for the visit for services not covered by a copayment, such as radiographs, injections and arthroscopic procedures. The physician must promptly provide the codes for the visit so the check-out staff can calculate the amount owed using a chart of allowable services and the patient’s benefit information.
Getting a patient set-up for surgery requires considerable coordination. Successful practices have one person manage the entire surgery coordination process from start to finish to avoid fragmenting the process: the surgery coordinator. The surgery coordinator is responsible for scheduling time with the OR, scheduling required preoperative testing and/or clearances, obtaining precertification from the insurance payer and making financial arrangements with the patient. Modern practices collect a presurgical deposit as part of the surgery scheduling process. Given the significant increase in patient payment responsibilities during the last several years, many practices also collect the balance of the patient’s portion or set up an automated payment plan for the balance, before the date of surgery.
To schedule surgeries and obtain precertifications, the surgeon must provide the diagnosis or ICD-10-CM code(s) and the planned procedure or CPT code(s).
One of the most critical components of the revenue cycle is the physician’s documentation of the encounter. It tells the story of what the surgeon did and it must be specific and detailed. Surgeons should learn to dictate operative reports using CPT terminology. Using CPT language makes it easier for billers and for payers to link the service to the CPT code for appropriate reimbursement.
Back-end revenue cycle
After an office visit or a surgery, charges for the services are entered in the PMS and submitted through a clearinghouse to third-party payers. This is known as the back-end of the revenue cycle, which is commonly handled by employees who are considered the billing team. If there is an error with the insurance or other demographic information, the claim will hit an edit in the PMS or at the clearinghouse. The error must be corrected or overridden before the claim gets transmitted to the payer. A claim transmitted without error is referred to as a “clean claim”.
After a clean claim is submitted, the office waits for payment. Medicare statutorily pays on the 14th day. Commercial payers vary when they pay by contract, but a practice should expect payment within 25 days to 30 days. Most payments are now sent to practices via electronic funds transfer (EFT) rather than paying with a paper check. This is basically direct deposit from the insurance company into the practice’s bank account.
Along with the payment, the insurance payer sends an explanation of benefits (EOB) that details the charge the surgeon submitted, payment the insurance payer made, any adjustments applied and the reason for the adjustment. If the payer denies a service, then the EOB gives the reason for denial. Modern practices sign up to receive electronic remittance advice, which allows the EOB detail to automatically post into the PMS. This eliminates the need for an employee to enter the details line-by-line.
Accounts receivables follow-up
The accounts receivables (A/R) are the sum of all outstanding accounts. Some of the A/R is the patient’s responsibility that was not collected at the time of service. Most of the A/R is typically insurance responsibility. Best practice is to have dedicated billing team members work the A/R by payer.
Follow-up on accounts receivable includes contacting payers who did not pay or send an EOB, as well as working denied claims. Much of this can be done electronically through payer websites and portals. In most cases, staff can request claim status online, submit additional documentation when requested and file an appeal electronically, which eliminates the need to make a phone call or send a letter to the payer.
Ways to follow-up on patient-responsibility A/R include sending statements and sending non-paying accounts to collections. A well-managed practice should have minimal patient A/R if it is effectively collecting from patients at the time of service or prior to an elective procedure.
Surgeons should ask for a monthly A/R report and review it, looking for increases in the number of accounts more than 90 days old. Focus on accounts in the 60-day column and ask for details about big accounts. Take an active interest in understanding the A/R. This is particularly important if a portion of the surgeon’s compensation is based on collections.
Physicians impact reimbursement
As described herein, there are key areas in which the physician is critical to a successful revenue cycle.
1. Own the code selection. In an academic setting, surgeons are not always required to select specific ICD-10 and CPT codes for the cases they do. A staff person may do this on their behalf. But, once practicing in a group or hospital-employed setting, if the surgeon does not provide the codes, then the corresponding claim sits. It remains unbilled and the claim risks non-payment due to timely filing limits, which can be as short as 20 days. If a surgeon is uncomfortable with or unsure about coding, he or she can take an American Academy of Orthopaedic Surgeons coding and reimbursement course.
2. Document the encounter using appropriate detail. In today’s ICD-10 environment, it is no longer adequate to state the patient has “joint pain.” The joint and the laterality must be specified. If there is a known cause, it should be included in the documentation. Using detail will enable coding to be as specific as possible and provide an increased likelihood of reimbursement.
3. Review A/R reports and ask questions. There is a saying that, “staff respect what management inspects.” When a surgeon takes an active interest in the billing process, it sends a message to the staff that the surgeon is paying attention to their results.
A successful revenue cycle process involves everyone in the practice, from the receptionist to the surgeon. Recognize how to establish streamlined and efficient front-end and back-end processes and participate in the processes that require surgeon inputs. With attention to the revenue cycle, staff productivity and practice revenue will be optimized.
- For more information:
- Amy Boyer, MBA, is a consultant with KarenZupko & Associates Inc. Amy has 15 years of experience working with physicians in private practice, hospital-based practice, and academic settings. She specializes in practice operations, revenue cycle and the use of technology to improve productivity. She frequently advises residents and young surgeons about employment agreements, compensation and practice start-up issues.
Disclosure: Boyer reports she is a consultant with KarenZupko & Associates Inc., which develops and delivers CPT Coding and Practice Management workshops presented by the American Academy of Orthopaedic Surgeons in conjunction with KarenZupko & Associates Inc.