Last week ago, I was checking what was happening with shortfalls and excess since the start of the year. Using a single private consultant surgeon as an example:
Week ending Friday, September 6th, 2019: out of 15 consultations 4 came back with excess/shortfall deductions. The total £575.
So for a total of £2,500 worth of outpatient consultations £575 or 23% came back short.
Looking back to the same week in 2018, the number of shortfalls/excess was considerably less.
The question as to why this is happening is not the immediate concern although I will blog about that next week if anyone wants me to?
The concern is what you should do about it.
If 23% of submitted invoice values continue to come back as shortfall or excess, the downside and potential loss to a consultant surgeon is significant.
What to do about it?
The very first thing to do is to make sure the patient has been invoiced for the amount due immediately. If payment is not received within a week then there is only one subsequent single course of action.
Phone the patient.
Once I have the patient on the phone I take payment via a debit or credit card.
Sure you can write letters and even email but nothing gets a response like a ringing telephone.
Most patients are unaware of the issue (yes I know when they open their policy they are made aware of excess values) but some think this is an issue between them and their insurance company.
In other words, the patient thinks they need to pay the insurance company because the consultant gets paid in full by the insurance company.
There are variations on this but the crucial point for the consultant is not to establish why. The point is to ensure he recovers the shortfall/excess efficiently.
That means speaking to the patient.
But if telephoning the patient is the most efficient way to tackle the issue, it does not automatically follow its the easiest.
It has to be done professionally and with care.
This is not a debtor I’m talking to on the telephone.
It is a PATIENT!
The long-suffering med-sec really won’t have the time to do this as professional and caring as she undoubtedly is.
The majority of medical secretaries won’t want to phone patients for money and will be thinking this is the least enjoyable part of her job.
What if the consultant doesn’t employ someone to tackle this? What if they don’t do anything?
Assume it’s not £575 or 23% a week or £27,600 a year (£575 multiplied by 48 – not 52 weeks as you will have 4 weeks off a year).
Assume instead its 10% for 24 weeks (i.e. roughly half) and allows for some patients paying without being contacted.
That’s still £13,800 per annum.
What’s significant is that when speaking to a group of private consultant surgeons I asked what they considered the biggest threat to their practice(s).
Most popular is the anticipated further reduction in fees paid by private medical insurance companies.
There is little if anything that can be done about that.
The second concern, however, is the number of shortfalls and excess. It’s becoming a big challenge. A challenge that will get bigger in my view.
At this point, empirical evidence suggests its potentially leaving the back door wide open and enduring £13,800 worth of potential losses right off the bottom line.
I’d be really interested to hear from anyone who is seeing an increase in shortfalls etc.
pete@medicalhealthcaremanagement.co.uk
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One of the most often asked questions is “how as a private consultant surgeon can I improve or increase my cash flow”.
The answer, as regards medical invoicing, is very simple to answer:
But what does that mean in reality?
It means taking all the items that should be done and turning them into a MUST be done.
For example, I took a phone call from a consultant’s secretary this morning who wanted a favour. She was struggling to get an invoice posted electronically. She was trying to invoice BUPA.
Simple enough you may think but despite having a policy number, she could not process the invoice.
So how did it take me approximately 3 seconds to work out precisely WHY she couldn’t process the invoice?
She told me the policy number began BI-6000 etc.
That told me the policy number was not a BUPA policy number; it was a BUPA INTERNATIONAL policy number.
She was trying to invoice the wrong insurance company. A quick fix to process the invoice, again online, to BUPA International and it sailed through. Sorted.
If standards had been raised to ensure that every single patient registration form had been completed correctly, this problem would not have occurred.
The invoice would have been processed the same day and payment made when required. Instead, a shortcut had been attempted and the patient’s insurance company detailed incorrectly. If standards had been raised to ensure this was checked and spotted the invoice would have been immediately processed.
There are no shortcuts if you want to get paid.
As it happens in this case the issue was already a week old before I took the phone call.
Thus an increase in cash flow – the outcome desired by the private consultant – was not being reached.
However, if you stop to think there are two questions:
When the patient was registered, why wasn’t the check performed to ensure the right insurance company was recorded because it should have.
What should have happened was the standards had been set too low.
If it becomes a case of the patient MUST be asked i.e standards are raised then this specific problem is never allowed to arise.
And that’s what I mean by raising your standards.
So why is this even more crucial as we work our way through 2019?
Because more and more private medical insurance companies are insisting invoices be submitted electronically.
The issue is not one of is that the right thing for them to do or not. The real issue is that it is happening and standards must be raised to ensure you CAN invoice electronically.
In other words, if you don’t have all the right details it is much, much harder to process an invoice electronically. You will instead have to re-contact the patient and get the right details.
Therefore it makes more sense to say you MUST get the details upfront and you must RAISE YOUR STANDARDS to the point of saying – the correct details MUST be obtained and checked.
I’ve even witnessed where an invoice can’t be processed because the postcode has been recorded as W01 (numeric) when it should say W01 (alpha).
Many times I’ve said insurance companies are not the enemy.
Even if I frequently disagree – I do on a daily basis sometimes – with some of their fees plus other items they do which are seriously irritating, all insurance companies will pay a private consultant IF (and only if) ALL the details are correct.
In other words, invoices must be raised to the correct standard.
If you want to increase or improve your cash flow, the very first thing to do is to raise your standards in the area of invoicing.
pete@medicalhealthcaremanagement.co.uk
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I argue with medical insurance companies all the time.
Let me, however, be very specific about when and why I argue with them. I argue with them when I think they are wrong or when I think they have made a mistake.
A real example will illustrate why and when to argue with an insurance company.
MHM has a client who performs a specific test at a consultation with a patient. He has done so on more than one occasion obviously and with patients holding cover provided by all the major insurance companies, I’ve invoiced for him many, many times. Per normal MHM won’t reveal who the client is, his specialism or indeed the true value of his charges. For the purposes of this example please assume the charge is £125 for the consultation and £75 for the test.
The invoice was raised and sent electronically to the insurance company. It detailed all the correct details i.e. patient’s name, complete address, date of birth, policy number, pre-authorisation number. The correct CCSD code for both the consultation and the test were used. It also indicated the correct price for each and a total value for the combination involved. In other words xxxx (the consultation) = £125. The yyyy (test) = £75. Total value = £200.
Surprisingly, when the remittance arrived electronically from the insurance, only the consultation had been paid. A note appeared on the remittance advice stating it was not possible to charge for a consultation and that particular test at the same time.
Except, you can.
Before picking the phone up to call the insurance company concerned I first visited the insurance company’s website. The codes were correct. The fees for each code were correct. There was no indication that the combination could not be charged alongside each other whatsoever. I was pretty certain even before I’d checked that I was right but it doesn’t hurt to check. I could have been wrong. More likely it could have been that the rules had been changed.
Establishing the facts is vital when raising invoices for medical billing. Actually its true of all commercial situations but is dependant on what is deemed to be a fact. What some claim to be facts turn out to be anything but sometimes. In this case, though the facts were as I thought them to be. It was perfectly acceptable to charge the two codes together. Only then did I call the insurance company.
Having passed the normal Data Protection requirements i..e patient identifiers, etc, I asked WHY this particular charge had been reduced? It was explained to me that the combination was invalid. It was unbundled as they say. Except I insist it was valid, was not unbundled and further, the insurance companies OWN website said the combination was permissible. The phone went quiet for a while and then I was told the insurance company was wrong and I was right. The £75 would immediately be paid to the consultant involved.
Despite what you may think it is not unusual for an insurance company to make a mistake, admit they have made a mistake and then rectify it straight away.
Don’t, however, call an insurance company and twist the facts. By that I mean don’t call them and say their fee isn’t right and should be much higher. That is not a fact, it is an opinion. When faced with a combination of codes that can’t be charged together do NOT separate them into two invoices one being sent on a Monday and one on a Tuesday. Don’t unbundle in other words. Insurance companies may make mistakes but they aren’t stupid.
Its very much a case of “picking your arguments” and challenging an insurance company in the right way and on the right subject.
But is also very, very much a case of noticing that the insurance company have made a mistake and asking them to rectify it. The number one statement made to me by private consultant surgeons is that fees are too low (I agree for what its worth) and that insurance companies are really, really difficult to deal with. They are not.
As regards fees, however, if you want to increase your fees the first port of call is actually to check you have a) charged the right amount to begin with and then b) making sure you ARE ACTUALLY PAID the right amount. In the example above the £75 wasn’t lost, it was paid to the medical professional concerned.
Look at it this way. His total charge was £175. If I hadn’t noticed the £75 had been deducted in error, he would have received 43% less than he was perfectly entitled to be paid!
pete@medicalhealthcaremanagement.co.uk
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To successfully perform medical invoicing or medical billing there has to be a degree of focus on the task itself.
In fact, there has to be a total concentration on the expected outcome. But what is the outcome
The outcome is always the same. Getting an invoice paid. The total focus must be applied to this outcome. Making sure the private consultant surgeon is paid is the task. The total focus must be on that. The problem arises when total focus is not possible.
For example: in the middle of invoicing for 12 consultations and 4 medical episodes the telephone rings. Worse than that the person responsible for medical billing decides, as they don’t really enjoy doing that specific task, to do something else instead.
A major distraction from focus is other people’s demands.
MHM once had a client who called 8 times within 35 minutes. He afterward complained his billing wasn’t being done quick enough. It didn’t take a genius to work out that the 8 phone calls were actually the total distraction themselves.
It doesn’t really matter what the distraction is even though with modern technology advancing so much over the years, the likelihood of distractions has increased ten-fold. For example, I may be in the middle of a task and my mobile pings to say an email has arrived. A phone may also ping because a text has arrived. The opportunity for distraction(s) is enormous.
Yet these distractions can remove focus from the planned outcome.
They can stop processing an invoice correctly, resolving an issue that is preventing an invoice getting paid or they can even stop an invoice being raised in the first place.
Modern technology is great. It enables MHM to communicate with its clients speedily and efficiently. Clients can provide data to MHM equally efficiently. It also enables MHM to raise invoices electronically and deliver them at the push of a button. But it can also be a blessing in disguise if MHM were to let it distract from the job in hand.
Thus it is worth repeating that the planned out is for the private medical professional to get paid.
That is what MHM is there for; nothing else.
If the technology on occasion stops that, then remove the technology for a while.
This may sound revolutionary but in the real world, ignoring technology when the technology actually prevents achieving the planned outcome is not as silly as it sounds.
For example: when I’m raising medical invoices for a client – every single morning invoices are processed at MHM – I switch my email off. Thus there are no distractions caused by emails arriving. Before anyone raises the question of an email being important, may I suggest that in reality whilst emails may be important seldom are they time critical?
They are normally requests for data or asking a question.
All three examples are important but they are not, despite what people may claim, time-critical.
My favourite example of this is the person who was tasked with locating new premises for MHM. She emailed me one-morning last year but when I didn’t immediately respond, telephoned to confirm if I had received her email. This despite the instruction to email details to me and being advised I would respond later that week.
As she couldn’t even follow that instruction, she immediately lost the opportunity of finding new offices!
The world will not end and a private medical practice won’t immediately collapse if an email, a phone call or even a text are not immediately responded to.
That is not to say a patient inquiry should not be immediately answered. In the case of a patient calling then absolutely they should. Have someone designated to answer the phone. It looks awful if a patient calls and the phone isn’t answered.
But don’t have the same person responsible for medical billing AT THE SAME TIME for if you do the phone calls and/emails will provide the distraction to caused the planned outcome to be missed.
Medical billing is not the easiest thing to do in the world. It requires concentration and attention to detail. If the outcome is expected to be prompt payment of an invoice for medical services, the focus should be directed to just that. You know what happens if I switch my email off during the morning or I have the text alert set to silent?
Nothing.
Except I raise numerous invoices for clients, resolve issues with insurance companies and make sure MHM clients are paid.
pete@medicalhealthcaremanagement.co.u
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The patient arrives for the consultation. He hasn’t obtained a pre-authorisation.
Yes, of course, you should. Patient care must come first.
But the patient does not have a pre-authorisation! It does happen. It shouldn’t but in the real world, it does.
How should this be handled? Ask the patient to immediately ring their insurance company.
If say the consultation was on August 28th and the patient calls the insurance company on August 30th, the patient should make sure the insurance company know when it took place.
In this example, the patient did not tell the insurance company it was two days earlier. When MHM tried to invoice, it was declined. The consultation was before the date upon which the pre-authorisation was issued.
If the patient holds an insurance policy, which will not allow the backdating of a pre-authorisation you’ll have even more difficulties.
This is not the insurance companies being unreasonable.
The patient has incurred a liability on behalf of the insurance company yet the insurance company knows nothing about.
Ultimately the patient is liable for the consultation fee of course so an invoice is sent to the patient.
The patient rings up (normally quite upset) and points out they are insured and are covered for consultations.
Numerous phone calls between the patient, the insurance company later, the issue is finally resolved.
The invoice is submitted to the insurance company and its paid in full.
It would have been paid without the hassle IF the patient had been asked by the consultant to tell their insurance company when the consultation was for.
If this is happening to you, it’s an issue you can address. Otherwise you may spend 15 – 30 mins just sorting this out!!
pete@medicalhealthcaremanagement.co.uk
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Working for a consultant surgeon is fun.
However, since one particular private medical insurance company decided to outsource their help desk or their “advisors” late last year, there has been a marked reduction in their level of customer service from it.
Considering the people calling them are either consultant surgeons or calling on behalf of a consultant surgeon, that is pretty bad.
Indeed the average time on hold for this particular insurance company, for example, is now well over 30 minutes. That’s pretty awful considering it used to be less than a minute.
What is ironic however is that now I have a choice of music to listen to. For example: would I like to listen to classical music, pop music, jazz or rock music? I decided on classical as it happens and am currently listening to Bach. I like Bach.
But it has got me thinking…
Isn’t being given the option of what to listen to missing the point entirely? This is an even worse option than being told my “call is important to us” and then the call is unanswered. Shouldn’t the aim be to answer the phone call rather than offering a choice of music to listen to?
All private consultant surgeons sooner or later will need to speak to an insurance company.
Whether this is at the point they are attempting to gain recognition or to check a fee is correct is not relevant.
Sooner or later – particularly if you are billing an insurance company – you have no choice but to speak to them. But is it absolutely necessary to call?
That is my favourite question to ask.
The first port of call so to speak is always to consider if an action is necessary.
In other words, what is causing that action to be necessary and can anything be done to prevent the necessity of the action? In the case of speaking to a medical insurance company, in theory, many of the calls should not be necessary.
If an invoice is raised and submitted correctly for example then payment should – again in theory – just flow through.
Reducing the necessity of speaking to an insurance company is always a good aim. It is the very reason I check remittance advice sent by an insurance company most carefully.
They record many of the details as to why an invoice, for example, hasn’t been paid either in full or partially. For example: if a partial payment has been made the reason why will be detailed on the remittance advice.
Thus the number of calls required to a private medical insurance company will be reduced.
Nonetheless, the fact remains there will ALWAYS be an occasion to call an insurance company. It may be, for example, that the fee has been reduced and you don’t know why. The point is there may be genuine reasons why it IS necessary to speak to an insurance company.
Contrast this however with another insurance company I’ve spoken to this morning. I called them and was told I was on hold, was caller number 3 and the estimated hold time was 4 minutes. Fine; I can live with that. It is up to me whether I’m prepared to wait in line or call back.
Having formally complained to the medical insurance company in the first example that their customer service is not good four times so far in 2019, I did consider WHY they had outsourced? It would appear the reason is financial.
It’s cheaper.
It was once said by an extremely wealthy man that price is what you pay and value is what you get.
I agree wholeheartedly.
Cheaper isn’t always the best.
And time is money too. I’ve actually written this blog whilst being on hold and listening to Bach. So I’ve used the time to do other things too.
What would happen, however, if I was a private consultant surgeon with an already overworked medical secretary who had letters to type or worse still was on hold so patients couldn’t ring her?
That would reflect badly on my practice.
I’m all in favour of outsourcing. I would say that though because my business is intrinsically the provider of an outsourced facility to private consultant surgeons.
Even so, I get seriously frustrated at being told either my call is important – well answer it then – or I’m offered a choice of music to listen to. I don’t actually want either to hear either.
I want my issue resolved quickly and efficiently.
Cheaper and slower shouldn’t be an option.
pete@medicalhealthcaremanagement.co.uk
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There a few things I hear that automatically set alarm bells ringing when I look at the billing process of a medical practice.
“I’ll take a look at it next week”
“I’ll get round to it in a bit”
“I’ve been meaning to look at that”
The final of those items was said to me last week.
I was sitting on a panel facing an audience of medical professionals.
In amongst the various questions was one relating to how to monitor the invoicing efficiency of a medical practice.
To me the answer is simple. Before you can measure any part of a business, you must first establish a standard to measure against. Which is what I said to the questioner. I asked if he knew how many invoices he had raised last month and the total value of them. Sadly he didn’t know either.
But, I continued, to improve the performance of your practice you must know how you are performing against whatever standard you decide is appropriate.
Now consider the issue of invoicing with a real MHM example. One of my guys – a private consultant surgeon – saw 25 patients between Monday, August 20thth, and August 24th. Therefore I should see 25 invoices. That is an ultra-simple which makes sure everything is invoiced.
If I only have 23 invoices I have a problem!
But it also means of course at the end of August I can add up the number of invoices and also tell the client how many patients he has seen during August. Then we can compare that number with the number the previous year and see if it is higher or lower. The introduction of such a basic, basic, basic management control isn’t a nicety. It is an absolute necessity if you are going to manage the invoicing process effectively.
The audience member agreed fully but then the alarm bells went off when he said “I’ve been meaning to look at that for a while now” He hadn’t because there always seemed to be some other problem to deal with.
That tells me his management controls aren’t as robust as they should be. It also tells me he is suffering from one of the worst and easily avoidable causes of business failures out there:
Procrastination is even worse than having a backlog of invoices to raise because it diverts you from identifying a backlog is building up.
Procrastination is even worse than having no cash because it distracts you from raising the invoices and thereby getting paid.
Procrastination is the cause of the problem he has because various insurance companies have declined his invoices for treatment as the consultation was more than 6 months ago.
Set time aside every single week to make sure, you DO invoice and to make sure you review what is happening with YOUR money!
pete@medicalhealthcaremanagement.co.uk
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Two different MHM clients – both consultant surgeons – have been advised by a specific insurance company that the fees for their initial and follow up consultations are being reduced.
They are not amused, to say the least.
But what can they do about it? Nothing.
Actually, that’s not strictly true. In a perfect world, there is much they can do. But we don’t live in a perfect world. We live in this one.
In a perfect world they can, for example, pass any reduction in fees on to their patients.
Save of course their recognition agreement with the insurance company forbids them to do so. If they do they are at risk of de-recognition. Ah came the reply, the insurance company won’t find out. Yes, they will.
Or they can stop seeing patients referred to them by that specific insurance company.
In both cases during the last half of 2018 that is over £10,000 worth of referrals.
Both would suffer double percentage digit drops in private practice turnover. That is not good.
Both of these consultants, however, are by no means stupid.
Neither of them just react.
An immediate reaction is potentially the worst thing to do. Indeed many years ago MHM worked with one consultant who did just that when denied a fee by an insurance company. He even went so far as to tell the insurance company concerned unless they immediately put his consultation fees back up he would forgo his recognition with them and refuse to see their insured patients.
They didn’t so he did.
And immediately saw a 23% drop in the private practice turnover. Do NOT react.
What is required is a considered response of all the options.
In the case of the MHM clients, I calculated what the drop in consultation fees would mean over a six month period against an assumption that the lack of referrals would lead to 25%, 50% or a 100% drop in patients from that specific insurance company.
In all cases, for obvious reasons, there was a loss. But at least that loss was now quantified.
It is worth noting that the drop in consultation fees would not impact in a drop of surgical fees because surgical fees were excluded from the reduction.
That said a refusal to see patients from the specific insurance company concerned due to consultation fee reduction would automatically lead to a 100% drop in surgical fees as clearly if a consultant does not see a patient, it is extremely unlikely he’ll take that patient into theatre.
Sadly there are only two options in reality: accept the reduction or don’t accept the reduction.
I’m afraid the insurance company really are in the driving seat when it comes to setting their fees and there is little a private consultant surgeon can do about it.
Many years ago a private consultant surgeon could charge what they liked and to a certain extent with a self-funding patient, they still can. However, with insured patients, those days are long gone.
Rightly or wrongly, those days are over.
So what should the private consultant surgeon do?
MHM suggests an analysis of how the reduction will impact on the private practice should be undertaken.
That will at least quantify how the reduction will impact on the private consultant surgeon in actual financial terms. All the data will be contained on a sales ledger and with the aid of an excel spreadsheet, it’s relatively easy to perform the analysis.
Such an analysis also confirms how the reduction will impact on MHM for MHM charges a percentage of what is actually paid to the consultant. If that figure is lower then the MHM fee will also be lower. In other words, the pain is shared.
Thus I don’t like it any more than the private consultant surgeon but I can’t do a lot about it either.
The bottom line remains to accept the fee reduction or reject the fee reduction.
That I’m afraid is the reality.
pete@medicalhealthcaremanagement.co.uk
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It is depressing the number of times I hear potential clients criticising insurance companies.
In my experience the reasons normally cited are incorrect. Far from it.
I’ve lost track how often I’ve been told an insurance company won’t pay for something. Yet when I ask if the insurance company have actually been asked IF they will accept a charge, the answer comes back that they have not.
I have all the private medical insurance companies on speed dial. They need to be as I speak to most of them every single day of the week. There are many, many things I’m already aware of. There are also some things that I don’t know or more importantly, that may have CHANGED.
I ask them all sorts. For example – I ask them to confirm a patient’s policy number. I ask them to confirm why an invoice has only been partially paid. Sometimes I ask them if I can or cannot charge for a certain medical episode. Which brings me neatly to the W9040 code.
I was invoicing for an orthopaedic consultant surgeon recently. His specialism was knees and during a follow-up consultation, he administered a W9040. This particular CCSD code represents an injection into a joint or soft tissue.
The question arose if I could charge a particular insurance company for a follow-up consultation fee AND a fee for the injection. So I called them. The answer came back yes I could. I could charge £120 for the consultation and £50 for the injection i.e. £170. The insurance company would happily pay such an invoice.
Compare and contrast that with work I was performing for a dermatologist recently.
This time the question arose of an S5210 (an Injection into subcutaneous tissue). I’ve only recently started invoicing for this client and thus it was important to establish what could and could not be charged for. More specifically, would the insurance company accept an invoice for the follow-up consultation AND the injection? Yes, they would. £125 for the consultation and £108 for the injection i.e. £233.
Remember however that I had asked ONE specific insurance company. When I asked others the same question, some would NOT allow the separate charge.
What was concerning was previously the dermatologist had not been charging for the S5210 at all. I actually asked his practice manager why this was so. The answer came back that the question had been asked of an insurance company before and the answer was no. The problem was that whilst the insurance company concerned did not (and still don’t) allow a charge, other insurance companies DID allow a separate charge. But nobody had asked the other companies. Instead, it was assumed the decision covered ALL insurance companies.
Thus on numerous occasions, insurance companies are wrongly blamed for their actions.
It was only by speaking with the individual insurance companies that I identified which ones would accept the charge and which ones would NOT accept the charge.
Insurance companies are NOT the enemy. If you call them, you may be surprised at what you are told. That is not to say you will always obtain a positive response but you may be pleasantly surprised.
pete@medicalhealthcaremanagement.co.uk
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In terms of medical billing, this perhaps is one of the statements I hear from private consultant surgeons more frequently than others.
The following example illustrates that despite the rejection of the fee how the fee was established confirms there is little the consultant can do about it.
The consultant surgeon concerned had applied to be recognised by private medical insurance. MHM had spoken to the consultant and pointed out fees should be confirmed when recognition was being arranged. The consultant was well qualified, had held a substantial NHS post for a number of years and his/her specialism was in high demand. The private medical insurance company was keen to offer recognition. Thus recognition was granted.
Yet despite the warning by MHM fees had not been checked.
MHM was subsequently asked to handle the medical billing side. In order to do so, we need to know how much consultation fees were. The medical professional, however, did not know what the consultation fees were. Thus alarm bells immediately started ringing.
Consultation fees would have agreed to and would have been detailed in the pack supplied to them by the insurance company concerned as we had advised. So we called the insurance company and quoted the newly acquired provider number.
As usual, the insurance company was keen to point put the consultant had agreed to adhere to the published fees.
It is always amusing when “fair and reasonable” is quoted to me because it depends on what the consultant thinks is “fair and reasonable”. More specifically what happens if the thinking differs between the two parties concerned. And that is precisely what happened in this example.
The insurance company deemed that £130 was a fair and reasonable fee for a consultation.
The medical professional deemed that £175 was a fair and reasonable fee.
And thus the consultant instructed MHM to charge consultation at £175.
MHM pointed out that it would indeed charge £175 as instructed. All that would happen, however, is the insurance company would reduce the value of the invoice down to the £130 originally agreed.
And that is precisely what did happen.
Despite the medical professional objecting strongly to a consultation fee of £100 and insisting a “fair and reasonable” fee was £175, the invoices were reduced in value.
It mattered little to the insurance company that the MHM client had colleagues who were both charging and getting paid £175.
Even before I asked the question I knew this was to be true. It mattered even less to the insurance company that a second colleague was paid even more than £175. This was so because the second colleague was in a completely different specialism!
Sadly the MHM client had based their practice business plan on a consultation fee of £175. They had done so because they had asked colleagues how much they were paid. Then they had assumed such fees would equally apply to them.
MHM, per normal, had no issue calling the insurance company concerned and arguing the case on behalf of the medical professional.
That said it was an argument that it was never going to be won. The simple reason remained that at the point of recognition the MHM client had accepted the fees.
Sure enough, the insurance company stood firmly behind its agreement with the consultant.
ASSUMPTION LEADS TO PROBLEMS.
The moral of this sorry tale is best summed up by the above heading. I’m not suggesting you shouldn’t challenge fees for consultations or indeed a surgical episode but don’t put yourself on the back foot by accepting fees and then challenging them afterward.
As painful as it is for the MHM client, it really is as simple as that.
Check your fees before you agree to them!
pete@medicalhealthcaremanagement.co.uk
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A couple of examples recently where consultants have tried to base their fees on the best rate available. Take the consultant who realises that PMI company Num 1 pay £300 for a procedure. PMI company 2, however, pay £400.
He decrees he will charge PMI Company 1 the PMI Company 2 rate.
Great idea.
Right up to the point PMI company 1 receives the invoice for the higher amount.
They will decline to pay that fee.
Most likely they will shortfall it. But, replies the Consultant, no problem. The patient is ultimately liable for any shortfall.
I know of one consultant who even puts on his website “we use PMI Company 2 rates to calculate our fees and therefore there may be a shortfall which you will have to pay”
Yes, the patient is liable for a shortfall BUT not when the consultant is fee assured he isn’t.
Most likely a letter addressed to the Consultant will arrive sooner or later from PMI Company 1 pointing out that such “inappropriate billing” is not acceptable.
Carry on doing it and your recognition is at risk.
It’s incredibly similar to unbundling.
Continue doing it over a number of months and for sure eyebrows will be raised. Even if there is no “fee assured” status PMI Company 1 will be well aware of regular and consistent charges that are in excess of their published fee schedule.
Notwithstanding the above, of course, consultants want the best possible fee for a procedure but attempting to obtain the same by “inappropriate billing” is not the smartest way to go about it.
pete@medicalhealthcaremanagement.co.uk
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A question asked at the recent presentation.
Insurance companies use medical coding to identify and detail a medical procedure.
For example: if you are an Orthopaedic surgeon you will understand precisely what a Multiple arthroscopic operation on the knee (including meniscectomy, chondroplasty, drilling or microfracture) is.
That is an awful lot to put on an invoice every time!
The code W8500 will specifically identify the procedure.
Put this code on the invoice instead.
Codes can be located on the CCSD website:
The Clinical Coding and Schedule Development Group (CCSD) consists of representatives from the five major healthcare insurers.
The CCSD Group’s purpose is to maintain a common standard of procedure codes.
A CCSD code is imperative IF a surgical episode is required.
The patient will need to quote the code to his or her insurance company when pre-authorisation is being requested anyway.
However, be warned.
The example above of W8500 will be recognized but a CCSD code does not come with a suggested fee.
The rate for each code is up to the individual insurance company. You need to contact each insurance company to discover what fee they will pay for each.
When an invoice is sent to the insurance company, the code should appear on the invoice. It will reconcile to that expected by the insurance company.
If you do NOT use CCSD codes payment will be delayed if made at all!
Without a CCSD code, you will not be able to invoice electronically anyway!
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There is always a reason why you aren’t getting paid. And the number one reason is that no invoice has been sent.
Take, for example, the consultant surgeon I was working with recently. The issue as he saw it was that his cash flow seemed to be totally uneven and much less than he expected.
Something causes it to happen.
If you leave invoicing until later it is very easy not to invoice at all. It can happen also if you leave invoicing until “tomorrow”.
Many times, I’ve been called in to examine and review the billing process of private medical practice and discovered an issue with invoicing frequency. So why is “tomorrow” “Friday” or “when I get the chance” the worst possible words for me to hear? Normally they are a big clue as to the reason why the practice is not getting paid as much as it should.
If you want to ensure your practice is paid promptly, the first place to start is raising an invoice.
Once a week is not helpful. In one extreme example, a practice was invoicing at the end of each month. No wonder there was a problem.
The danger in invoicing only on a set day a week is if something happens that day – for example, the consultant needs a clinic booking urgently or a patient needs a letter immediately, then the invoicing gets left behind. And that is normally the cause of the problems.
If invoices are raised daily should something happen to delay that ONE day’s invoicing, it is corrected the very next day.
Let me give you a real-life example.
Wednesday, September 30th a consultant ran an outpatient clinic and saw five patients. Three follow-ups and two initial consultations. £850 worth of consultations. Yet invoices were not produced for this work until Tuesday, October 13th – one day short of two weeks later!
Is it any wonder the consultant was extremely dissatisfied with the practice cash flow?
It didn’t take long for me to identify that on twice previous occasions over the previous few months one entire clinic list had NOT been invoiced (worth £725) and three initial consultations (worth £600) had also not been invoiced. In the case of the initial consultations, insufficient insurance details had been obtained at the point of registration.
In all £1,325 worth of invoicing had been missed.
But before we go any further do NOT blame the medical secretary. She has enough to do. The phone rings. Patients arrive. She has numerous letters to type. She has to book clinics. Theatre slots need to be arranged. That is precisely what she should be doing. She is there to ensure the “front of house” runs smoothly.
The error, if you will, is then expecting her to fit invoicing in around all that or, as was suggested to me, in her “spare time” WHAT SPARE TIME? She hasn’t got any.
In the above example, the solution was obvious. Either get someone in to process all the invoices and the cash receipts or outsource it.
A private medical practice is a business.
It must be managed as a business.
Without putting too fine a point on it, failure to ensure the invoicing and accounts process is not 100% efficient is pretty much guaranteed to lead to the business having cash flow issues.
pete@medicalhealthcaremanagement.co.uk
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I was at a medical conference recently and one of the speakers – a well-established consultant surgeon and an incredibly safe pair of hands – stated during his presentation that a private surgeon could not charge for inpatient care.
He may well be a safe pair of hands but on that point he was wrong.
After the conference, I had a word and said he was incorrect. It IS possible to charge for inpatient care.
I couldn’t help but suggest to him that the mere fact there was a separate code for inpatient care indicated it could be charged.
Obviously, it may well depend on the insurance company concerned. In principle, however, it is possible to charge. I knew I was right because I’d actually charged for inpatient care for an MHM client a few weeks earlier. And the invoice had been paid.
But he wouldn’t budge.
He was right.
I was wrong.
Skip forward a few weeks and I received an email from my consultant surgeon friend confirming that I had been right all along and he had been wrong.
Why is it sad that I had been right?
Because my consultant surgeon friend has been in private practice for well over a decade and he’d NEVER charged for inpatient care.
More significantly though, my friend had not checked each month what could and could not be charged for.
That also begged the question if the fees he was charging had been checked with the same frequency too. He hadn’t so as a favour I checked for him.
The good news is that only 3 of his fees had altered.
The bad news is that one of them had gone up £107 five months earlier yet he was charging the old and lower fee.
Thus it is important not only does a Private Consultant Surgeon need to establish what he can or can’t charge for, it is just as important to check HOW MUCH you can charge for!
pete@medicalhalthcaremanagement.co.uk
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All MHM clients are very dedicated individuals. Having spent approximately 15 years of training and finally becoming a consultant surgeon, they go on to work incredibly long hours.
All at some point, however, have taken the decision to start a private practice. It’s unlikely they would be my clients otherwise if you think about it. They start a private practice because they wish to make more money.
To have any other objective is either (a) silly or (b) engaging in self-delusion.
There is no shame in admitting you start a private practice to make money.
At that point however your private practice becomes a business.
As I’ve blogged many times previously, it must be run as a business. A business with more than a little social conscience but nonetheless still a business. Yet, sadly, many consultant surgeons make the mistake of believing their practice will grow.
It will make them rich if they continue doing what they love they do.
Sadly that is not true.
That means, as much as you love being a Private Consultant Surgeon, you must measure the performance of your business. This is the point the private consultant learns to understand financial numbers. It’s not all that complicated.
Supplying data to your accountant every year isn’t the same as understanding the numbers behind your practice though.
Let me give you a real example. I was contacted recently by an established private surgeon. He claimed to be working all the hours God sends but said he was always broke.
It didn’t take long to work out why.
The first indicator was a complete lack of financial analysis other than a tax report a little over one-year-old. No debtors ledger was available. So the surgeon didn’t have any real idea how much he was owed.
It transpired both patients and insurance companies were only invoiced monthly.
So I took the last six months worth of clinic lists and checked how many had not been invoiced. Quite a lot had not. I did the same with surgical episodes with the same result.
This was followed by an investigation into how much had not been paid even if invoiced.
But it was also a simple case of adding up the total revenue generated for each month, calculating the total costs (room rental, monthly indemnity insurance premiums, secretarial costs, etc) and subtracting one from the other.
Even if any type of provision was made for tax liability was ignored the results were not encouraging.
The really bad news is that the consultant looked very blank when I asked which percentage of patients were referred to him from which source i.e. how many GP referrals, private referrals, recommendations from previous patients, insurance company referrals, etc.
It was clear this particular consultant had no real idea of how his practice or business was performing.
pete@medicalhealthcaremanagement.co.uk
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A question we were asked very recently. One, in fact, we are asked frequently. But what is the problem?
There are a few very simple reasons why online invoices are not being accepted. The details being submitted are incomplete and/or the details being submitted are wrong.
MHM is a big fan of electronic invoicing. But electronic invoicing does depend totally on one item. Having the correct data. For example: if you try and invoice electronically you will need the patient’s date of birth and the patient’s postcode. If either is incorrect then you will NOT be able to invoice.
This goes back to a consistent requirement of making sure you the details are correct.
The first and ONLY place to start is the patient’s registration form.
If this form is not completed or there are errors, the problem will manifest itself in the fact an invoice can’t be raised electronically.
MHM was asked to review the billing of a large medical practice recently. The issue was the practice was owed significant amounts of money and could not get paid by one specific insurance company. MHM reviewed 100 invoices all of which had failed to be accepted.
In over 60% of the cases either the patient’s, policy number was missing or date of birth was missing or the patient’s postcode was wrong.
The practice manager responsible for this had, to resolve the problem, decreed the invoices should be sent in paper form instead. A clear case of mistaking movement for action!
The insurance company concerned, remember, had stated invoices should be sent electronically and ONLY electronically.
There is no such thing as a quick fix. A quick fix – such as sending invoices in paper form – often leads to more problems as it does not resolve the cause of the issue. Many insurance companies will no longer not accept paper invoices anyway so you might as well get it right up front.
MHM suggested going forward ALL patient details were captured correctly and the data verified with NO exceptions. We then took the “old” invoices and corrected/completed the data.
Within 4 months the average monthly cash flow into the practice had increased from around £120k a month to £260k a month.
pete@medicalhealthcaremanagement.co.uk
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One of the most common mistakes made by a private consultant surgeon when invoicing is undercharging for their work. This is alarming when considered against the question most asked by a private consultant surgeon.
This always spins off into a debate concerning how private medical insurance companies are the enemy. Fees are always being reduced with the private surgeon being paid less and less it is claimed. That may be true sometimes but is not the right place to start.
The right place to start is to make sure the private consultant surgeon is charging the correct fee. Such fee may be less than the surgeon wants of course but, many times, be more than he thought he was entitled to.
Take the example of an orthopaedic surgeon who contacted MHM to process her medical invoices recently. She was of the opinion her consultation fees were too low. That also may be correct. But that was the consultation fee the insurance company were prepared to pay.
In reality the orthopaedic surgeon was unaware some of the insurance companies were prepared to pay a fee for minor procedures carried out at a consultation. They would pay a procedure fee together with a fee for the consultation. Whilst some insurance companies weren’t prepared to pay both fees, some were. Instead the consultant had been charging ONLY for the minor procedure. She had not been charging for a consultation as well.
The same situation was equally applicable to a private dermatologist just as it was applicable to a GI surgeon. It is not therefore applicable solely to orthopaedic surgeons. It is applicable to many specialisms. The issue therefore becomes one of: am I charging the right fee?
To confirm the fee is correct a review of procedure codes and the fee for the procedure code should be undertaken. Both may then be compared against the fee structure of the private medical insurance company concerned. Each code and combination of codes must be checked against the fee schedule of the private medical insurance company. The often stated assumption that all insurance companies pay the same fee for the same procedure code should be rejected.
Take the example of a repair of the primary repair of achilles tendon. Insurance company A pay a fee of £336 whereas insurance company B pay £405 – £69 more! The orthopaedic surgeon concerned was of the belief insurance companies paid out the same fee. She had UNDERCHARGED by £69 as a result.
To return to the original issue of charging a consultation fee alongside a fee for a minor procedure, take a look at injection into soft tissue. The same insurance company paid a fee of £108. The orthopaedic surgeon in question was unaware that a follow up consultation could be charged in ADDITION to the fee for the injection. Another £150 on top of the £108! Thus the correct charge was not £108. It was in fact £258
To further illustrate the point a dermatologist may charge the very same insurance company, £91 for a curettage of skin or lesion. He or she may ALSO charge a follow-up consultation fee in addition. If the follow-up consultation fee is £100 (and it is for the MHM client concerned) the fee for the WHOLE event has doubled!
Thus the most common mistake in medical invoicing is not realising that fees can and do differ between insurance companies and also that some, not all but some, private medical insurance companies will actually and quite happily pay MORE for your work than you may be aware of.
pete@medicalhealthcaremanagement.co.uk
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It is depressing the number of times I hear potential clients criticising insurance companies.
In my experience the reasons normally cited are incorrect. Far from it.
I’ve lost track how often I’ve been told an insurance company won’t pay for something. Yet when I ask if the insurance company have actually been asked IF they will accept a charge, the answer comes back that they have not.
I have all the private medical insurance companies on speed dial. They need to be as I speak to most of them every single day of the week. There are many, many things I’m already aware of. There are also some things that I don’t know or more importantly that may have CHANGED.
I ask them all sorts. For example – I ask them to confirm a patient’s policy number. I ask them to confirm why an invoice has only been partially paid. Sometimes I ask them if I can or cannot charge for a certain medical episode. Which brings me neatly to the W9040 code.
I was invoicing for an orthopaedic consultant surgeon recently. His specialism was knees and during a follow-up consultation he administered a W9040. This particular CCSD code represents an injection into a joint or soft tissue.
The question arose if I could charge a particular insurance company for a follow-up consultation fee AND a fee for the injection. So I called them. The answer came back yes I could. I could charge £120 for the consultation and £50 for the injection i.e. £170. The insurance company would happily pay such an invoice.
Compare and contrast that with work I was performing for a dermatologist recently.
This time the question arose of a S5210 (an Injection into subcutaneous tissue). I’ve only recently started invoicing for this client and thus it was important to establish what could and could not be charged for. More specifically, would the insurance company accept an invoice for the follow-up consultation AND the injection? Yes they would. £125 for the consultation and £108 for the injection i.e. £233.
Remember however that I had asked ONE specific insurance company. When I asked others the same question, some would NOT allow the separate charge.
What was concerning was previously the dermatologist had not been charging for the S5210 at all. I actually asked his practise manager why this was so. The answer came back that the question had been asked of an insurance company before and the answer was no. The problem was that whilst the insurance company concerned did not (and still don’t) allow a charge, other insurance companies DID allow a separate charge. But nobody had asked the other companies. Instead it was assumed the decision covered ALL insurance companies.
Thus on numerous occasions insurance companies are wrongly blamed for their actions.
It was only by speaking with the individual insurance companies that I identified which ones would accept the charge and which ones would NOT accept the charge.
Insurance companies are NOT the enemy. If you call them, you may be surprised at what you are told. That is not to say you will always obtain a positive response but you may be pleasantly surprised.
pete@medicalhealthcaremanagement.co.uk
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I’m a contractor.
I provide an outsourced service for my clients.
I run my business to generate an income for me.
Notice all three of those sentences started with the word “I”?
But when I (sic) go and see a potential new client or even an existing one, I always remember it’s not what I want that is important. The word ‘I” e.g. generating an income for me, is the last thing of interest to the potential client.
What is important is to never forget the potential or existing client is much more interested in what I can do for THEM.
It is truly surprising the number of businesses and indeed individuals who forget the person to whom they are speaking is interested primarily in one thing THEMSELVES.
Whilst this does not mean the entire world is full of totally selfish people, it does mean that people are much more interested in what I can do for them than what having them as a client can do for me.
All of my clients are medical professionals.
Without stating the obvious, they all have their patient’s well-being at heart.
But that does not mean they have my wellbeing at heart because (a) I’m not a patient (b) I need to produce results for them.
If I were a patient it’s pretty much guaranteed they would have my interests at heart.
But I’m not.
I need to produce results for my clients otherwise I’m history.
Recently I blogged about a potential supplier who didn’t return phone calls to me. During the final conversation and in a desperate attempt to secure my business he came out with the classic:
“But Pete your order really IS important to me!”
That had the opposite impact than he desired for I’m not in the slightest bit interested if it’s important to him.
I’m only interested in what giving my business to him can do for ME.
Think about it. You don’t walk into Starbucks for coffee because you are interested in them.
You walk in because you want a coffee.
By all means, Starbucks will satisfy your thirst in pleasant surroundings too but never will they think you’ve gone in just to help them sell coffee.
It is just the same as my clients are only interested in what I can do for them.
And I never forget it.
Is that such an obvious question to ask? Really? No, it is not!
The patient comes to see you for two reasons and only two reasons.
They want you to cure or fix them.
They want to see you much quicker than if they saw another consultant but on the NHS. In other words, they don’t want to wait.
It literally is as simple as that!
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Many times I’m asked how and why MHM clients achieve their practice aims with apparently so little effort. How do they take the island?
MHM does not allow its clients to define their private work as a practice: it is a BUSINESS.
Private consultants refer to it as a practice; I call it a business.
What seems like a mere play on words, is anything but. The whole of the business is geared towards making a sufficient financial return for the effort that is required.
Whilst this is absolutely NOT at the expense of providing 1st class 100% professional medical care for the patients, it does mean that patients aside, everything else is geared towards obtaining a financial return.
If the business does not generate a financial return, what is the point?
That’s why MHM negotiated a fee increase for two separate clients in respect of surgical episodes (both were increased by 40%) last week.
The consultants concerned did extra work and were therefore entitled to charge more. It is, after all, a business.
The question then arises of how they achieve their business aims with “so little effort”.
This may be summed up very simply: it’s NOT true.
But let’s be clear. I’m not talking about the consultant’s professional skills and abilities. I’m talking about the divorce between their professional skills and the amount of effort put in to run the business as a business.
All MHM clients are smart enough to outsource the management of their business; they themselves rarely get involved for they realise they are in a different world than they are used to.
Let me illustrate this by comparison with an NHS patient and a private patient.
All MHM clients have NHS commitments.
They see numerous patients all the time. But these patients are delivered without much effort on the part of the consultant. That is absolutely not the case with a private patient.
The consultant must go out and advertise himself by whatsoever means to attract patients to him.
Then he must make sure, unlike his NHS patient in respect of which he’ll be paid his NHS salary regardless, that the private patient or insurance company pay for the consultation, etc.
So what does “burn the boats” mean?
Burn the boats means that everything the private consultant does to support his business MUST be 100% organised and efficient.
A private medical practice – a BUSINESS – cannot be run in a half-hearted manner.
It takes – like any other business – considerable time and effort to get it right. Burn the boats means there is no way off the island.
Of course, a private consultant can choose to close his private practice/business and leave the island but the mindset when you start private work is that it has got to succeed for the boats have been burned.
pete@medicalhealthcaremanagement.co.uk
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