“An integrated connection from an EMR to billing and collections services is crucial,” says Tom McBride, president and CEO of ProSperus, a Milwaukee-based practice management solution provider. As billing becomes a tangled web of CMS mandates, regulations, and payer rules, “submitting and tracking claims has become an increasing complex process,” McBride adds. Although about 80 percent of physicians handle their own billing and collections, increasingly, practices are outsourcing this crucial part of their financial operations. “If you have someone with focused expertise, using the right technology, billing and revenue cycle management can be done in-house,” says Chris George, president of Think First, a Boston area healthcare and consulting company. “The problem is, it’s hard to maintain qualified staff and keep up with all of the technology changes.”

The process of maximizing revenues from patient care is known as “revenue cycle management” (RCM), encompassing everything from collecting co-payments to managing accounts receivable. It is estimated that billing errors can lead to loss rates of up to 10 percent of a physician practice group’s revenue, but outside services—whether a simple billing company or a Web-based software that enables automated scheduling, billing, and record keeping—can “allow physicians to spend more time with patients, and less time focusing on the billing system and how to capture the revenue,” says George. Rosalind Franklin, a 16-physician healthcare group in Chicago, for example, found that co-payments rose from 20 to 92 percent after using an e-eligibility feature that checked insurance information and acted as a co-pay reminder system.

A solid EMR system allows for clinical integration of electronic coding, promoting the creation of accurate documents to ensure that more claims are paid with fewer denials. Add a solid practice management system (software that oversees the daily operations of a medical practice) that is integrated with an EMR, and “cost savings will be immediate and abundant,” says Mary Anne Irwin, a consultant with Vermont-based Global Works Systems, Inc. Whether you decide to manage your revenue cycle in-house or out, “keep in mind that the same tools that are available to a billing service are also available to physician practices,” says Irwin. Solutions include automated insurance verification, claims submission and inquiry, payment posting, denial management, and appeals. “Technology investment can help a practice utilize staff more efficiently and run its business office more efficiently,” says Irwin.

For practices that want to streamline their billing and accounting processes, John Adams, president and CEO of Global Health Alliance, a Houston-based medical billing service company, offers these tips:

• Review workflow and staff; centralizing resources may be more cost-effective and less drastic than outsourcing.
• Compare expenses, such as wages, benefits, office space, staff hiring, equipment and technology costs when deciding whether or not to outsource.
• Consider whether your staff is correctly coding bills to receive charges, payments, adjustments and denials. An automated system can help eliminate the many errors that may cause lost revenue. Use a software system designed to “scrub” claims.
• Incorporate a system that provides for submitting claims and payments electronically.

When it comes to RCM management, there is no one-size-fits-all solution, says Brian Morton of Ohio-based Halley Consulting group, which provides fiscal management advice for healthcare firms. “A simple error such as a reversed insurance number can lead to weeks of delayed payment if it isn’t corrected before the claim is submitted,” says Morton. “So the decision you make about the type of billing and accounting system you use is crucial.”