In this post, we’ll thoroughly explore a crucial element of revenue cycle management: the billing flow, with a specific emphasis on pre-payment billing.

The billing flow represents the full spectrum of activities involved in creating and submitting medical bills. This encompasses the entire billing cycle, from creating invoices to collecting payments. Due to concerns around security, complex agreements among stakeholders, and continuously changing regulations, this process often becomes intricate and frustrating, leaving both patients and providers feeling short-changed and in the dark.

This process spans everything from patient registration to coding and billing. Medical billers play a crucial role in preparing and submitting accurate medical bills. It begins even before a patient enters the healthcare facility and continues well beyond their treatment. Given the numerous steps involved, a single error can have a cascading effect, leading to significant revenue issues that are challenging to trace and resolve. The importance of accuracy and efficiency in the medical billing process cannot be overstated.

Why Billing Flow Errors and Claim Denials Are Costly

It’s estimated that 80 percent of medical bills contain errors. These billing mistakes not only slow down the reimbursement process but also lead to denied claims, where payers refuse to reimburse providers. In contrast, an accepted claim is processed for reimbursement according to established agreements. High-dollar claims are particularly concerning, as they often demand a more resource-intensive corrective approach.

The Solution: Pre-Payment Billing Processes

To minimize billing errors, each step of the pre-billing process must be treated as essential, requiring best practices and meticulous attention to detail. A medical coder plays a crucial role in this process by translating medical reports into diagnosis and procedure codes after patient check-out.

Accurate medical coding is vital in preventing DNFB (Discharged Not Final Billed) issues, ensuring that all services are billed correctly and in compliance with insurance requirements.

Preparing accurate medical claims is essential for achieving high clean claim rates. This involves ensuring compliance with coding standards and detailing the adjudication process where claims are evaluated for validity and reimbursement amounts.

Coordination of Benefits (COB)

For instance, Coordination of Benefits (COB) denials can be easily prevented by accurately gathering, verifying, and recording patient insurance details. While these tasks may seem simple, they become more complex due to regulatory and economic factors as patients experience changes in their insurance coverage. Therefore, precision and vigilance in COB and other pre-billing processes are critical.

Discharge Not Final Billed (DNFB) Ratio

Another crucial yet often overlooked metric is the Discharged-Not-Final-Billed (DNFB) ratio, which tracks the number of accounts awaiting billing. Incomplete documentation and coding during care can significantly delay the completion of patient charts, coding, and abstraction. Thus, accurately recording the patient's status and place of service is vital for generating precise bills and ensuring your facility receives all the revenue it is owed.

Clean Claim Rate, First Pass Yield, or Real Revenue?

Achieving high clean claim rates (CCR) is often emphasized, with RCM consultants targeting rates above 90 percent and clearinghouses promoting percentages over 95 percent. However, it’s important to understand that while a high CCR indicates claims accepted by payors, it doesn’t necessarily correlate to low denial and underpaid claim rates.

A more meaningful metric to consider is the first pass yield, which reflects the percentage of claims that are fully paid upon initial submission. Achieving high first pass yield rates is crucial for securing proper reimbursement, as it ensures that claims are processed accurately and efficiently, reducing the likelihood of denials and underpayments.

MEDTEAM Revenue Cycle Management Services

Reducing claim denials and maximizing timely and complete reimbursements requires pre-billing processes that include comprehensive performance monitoring and insights at every stage for healthcare providers.

By focusing on operational efficiency, analytics, and performance monitoring, MEDTEAM can help you improve your revenue cycle management, including managing patient payments. Contact us at inquiry@medteamsolutions.com or call 1.844.615.1803 to learn more.