Banks are desperate to phase out cheques.
This is due to the cost of processing a cheque from the bank’s point of view.
Yet the decision was taken not to, as planned, phase out cheques completely by 2018.
It just is not going to happen. Cheques it would appear are here to stay.
But still, a number of consultants are reluctant to accept debit/credit cards.
Many MHM clients have endured problems with obtaining payment from self-funders and/or payment in respect of shortfalls and excess payments.
Even when a cheque has arrived, it must still be taken to a bank and paid in. And that is precisely why MHM has always advocated that a consultant must be able to take payment over the telephone.
In certain cases, dependant on the size of the practice, they should also be able to take payments online.
Yet this presents a dilemma for the consultant who believes rightly or wrongly that he/she cannot afford to accept payments over the telephone.
To MHM this is a false economy because frankly, we’d rather meet the cost of processing a debit or credit card payment ourselves than the client not get paid at all.
That is precisely what we did.
And it’s why MHM clients have a low number of outstanding self-funding patients and a low number of outstanding shortfall/excess amounts.
Just imagine the situation when the patient calls and offers to pay the account only to be told the consultant can only accept a cheque or a BACS payment?
In this scenario we are, at that precise point, actually refusing the offer of payment from a patient.
That cannot be a sensible approach for private medical practice, as a business, to take.
If the private practice is a business (of course it is) then it must conduct its business in an efficient manner.
To do otherwise leads to inefficiency and thereby a reduction of maximum profit available. As long as the payment methods are not to the detriment of the patient.
We once infamously advised a potential client, we were NOT prepared to charge the patient an extra 5% if paying by card.
The answer to the question is a resounding yes!
Indeed, whilst writing this blog I looked at my own cheque book. I’ve written out ONE cheque since October 22nd, 2014. All payments made by MHM have been by BACS, standing order or debit card.
Yet I must have processed hundreds of debit cards and credit card payments over the telephone on behalf of MHM clients in respect of self-funding invoices and/or shortfalls and excess amounts.
Do you need to take card payments over the telephone?
Well, we do it for our clients anyway!
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Recently I was reading an article in a business management magazine.
The article highlighted some of the challenges faced by small business owners when they start.
But it could also have been written about a consultant surgeon starting a medical practice.
The article illustrated how many small business owners attempted to start their business without assistance.
It is therefore common subsequently for the business to struggle with, for example, a lack of customers or a lack of cash.
This is normal for a consultant surgeon starting a private practice too.
It is not easy to start a private practice. There is a huge amount to be considered.
The basic rule is that if it can go wrong it will go wrong.
It happened when I formed MHM too.
Despite 35 years worth of managerial experience in running a business for various employers, I was used to ringing IT and having them install a new computer.
As a small business, ALL of that had to be done by myself. I soon realised, even though it cost, it was much better to go out and find someone who DID know what to do.
The first item in the article stated the first challenge facing a new small business is a lack of clients.
The same situation a newly established private medical practice faces too.
The second item was the lack of cash.
When I go meet a prospective client both are mentioned. Regarding the second point, the amount of cash generated by the small number of patients is nowhere near what was expected.
Yet I recollect when speaking to a colleague who specialised in marketing for consultant surgeons, most practices do not have a process in place to utilise the positive experience enjoyed by existing patients.
Their lack of new patients could be helped by using testimonials from current patients. The new practice does not have the right marketing strategies (both online and offline) to attract patients consistently.
Instead, marketing is left to drift.
My colleague is an expert at medical marketing yet she suffers from consultants believing she is too expensive to engage.
Alternatively, the new private consultant surgeon has a conversation with a colleague who has an established practice.
Hopefully, this pays dividends but it does suppose the established surgeon is maximizing his own marketing efforts.
Precisely the same happens when the subject turns to medical invoicing.
Many newly established private medical practices assume the invoicing – the “accounts bit” – is just as easy as marketing.
It will sort itself out in the end. If it doesn’t they ask a colleague how they do it.
Once again it assumes the colleague is managing his billing correctly.
Sadly he may not be.
The paradox, therefore, is that many consultant surgeons when they start out, make the same mistake as I did with my IT requirements when I started.
Two weeks and a few hundred YouTube videos later, I bit the bullet and called someone who DID know.
It cost me £150 but within ONE day I had all the systems up, running and working very efficiently.
The old adage of “if you think hiring a professional is expensive, try hiring an amateur” springs to mind.
Yet many private surgeons, by attempting to manage their own medical invoicing or asking their medical secretary to do the billing to an expert standard, make precisely the same mistake.
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There are numerous occasions when a consultant can charge for follow-up consultation and a minor surgical episode.
But it is important to understand which private medical insurance companies will allow such a combination and which won’t.
Otherwise, you may well be missing out on a fee.
Take CCSD Code W9040 – an injection into soft tissue – as an example.
Insurance company A says a W9040 attracts a fee of £50 and will allow it to be charged alongside a £150 follow-up consultation.
Insurance Company B says a W9040 attracts a fee of £108. However, it will NOT allow it to be charged alongside a follow-up consultation.
The total charge for W9040 with Insurance Company A = £200
The total charge for W9040 with Insurance Company B = £108
If the consultant surgeon does not realise Insurance Company A will allow a charge for the follow-up as well and only charge the W9040 fee of £50 they will immediately be £150 out of pocket.
Don’t expect the Insurance company to correct your error.
They won’t. Why should they? After all, it’s your job to ensure your invoices are correct. Nobody else.
Another example: CCSD Code S0820 – a curettage of lesions
Insurance Company A says an S0820 attracts a fee of £325 but will NOT allow it to be charged alongside a follow-up consultation
Insurance Company B says an S0820 attracts a fee of £107 and WILL allow it to be charged alongside a £150 follow-up consultation
The total charge for S0820 with Insurance Company A = £325
The total charge for S0820 with Insurance Company B = £257
Once again, if the consultant surgeon does not charge Insurance Company B for the follow-up AND the episode he or she will immediately be £150 out of pocket.
To further complicate matters, and using the S0820 as the example, note that Insurance Company A set the fee for the S0820 only to be £325. Insurance Company B set the charge at £257.
If in error, the Consultant Surgeon charges Insurance Company A with £257 (insurance company B’s fee) then the consultant surgeon will undercharge and only be paid £257.
That is what they have asked for and that is what Insurance Company A will pay.
Thus it is vital if a consultant surgeon is to maximize the revenue generated by his practice that he understands at all times what he or she can and cannot charge for.
He or she must also understand fees can and do differ between insurance companies.
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A group of surgeons I know is having problems getting paid by insurance companies.
Not just an individual insurance company but all insurance companies.
The practice manager claimed there were many invoices unpaid by insurance companies 3 months after the consultation or episode date.
This was all the fault of the insurance companies who simply do not want to pay.
I found this odd as in my experience ALL the insurance companies I deal with pay well before 3 months have elapsed.
The practice manager therefore altered the patient’s terms and conditions to read “patients will be asked to pay anything not settled after three months”.
This is, in his words “a long stop” and would prevent the issue arising.
I’m not convinced however putting such a plaster over the wound is the correct action to take.
I’m definitely not convinced a “long stop” will prevent the problem because it will allow the invoices to become three months old and then do something about them.
I raised the following two points with the consultants and their Practice Manager:
It’s this second point that is the more relevant of the two.
Insurance companies are NOT the enemy.
Of course, I disagree with many of their fee reductions.
I also disagree when they decree certain multi procedures are now deemed to be part and parcel of each other.
The reason for my disagreement is obvious. I’m here to get the maximum amount of revenue for my clients.
Anything that reduces such revenue is not good.
Nonetheless, insurance companies should not be treated as if they are the enemy.
Insurance companies WILL settle a claim within 3 months. I can honestly say I don’t have a single invoice for one of my clients sent to an insurance company still unpaid after three months.
So why are the group of surgeons referred to earlier having problems and introducing the “three-month” rule?
Without even drilling too far down into how and when the surgeons were invoicing, I can tell you the probable cause and why they subsequently feel the rule is necessary.
That is why the invoices are not being paid earlier than the consultants are currently experiencing.
It is all about getting it right the first time.
The first means having a clinic list or a theatre list invoiced promptly with all the details required by the insurance company appearing correctly on the invoice.
Putting the effort in upfront always generates the best results. It may be tiresome and it may be an inconvenience to have to stop, make a phone call so you DO have the correct details but it pays in the long run.
Its also all about 30 days after the invoice has been transmitted to an insurance company if it is still unpaid, getting them on the phone and asking if there is a problem.
If there is, it gets sorted immediately.
In other words, the invoice is not allowed to be dated more than three months from the episode or consultation date.
Consider it this way.
If you invoice quickly and invoice correctly, the number of potential issues that may delay payment reduces considerably.
You simply must make it easy for a private medical insurance company to deal with your invoices. I actually said that to a consultant surgeon recently who wasn’t sure he agreed until I asked him if he liked money or not?
Obviously, he said he did.
Therefore, my statement was correct.
As regards the consultants who have now introduced the “three-month rule” the rule itself should be entirely unnecessary.
The cause of the problem should be examined and steps are taken to prevent the invoices from becoming more than three months old.
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It is common in my world to be presented with a number of unpaid invoices. The remit is to go get paid for them. That I can do.
If they were raised in the first place that is.
If they have NOT been raised it is much more difficult.
I’ve done it many times. It’s not without its difficulties though.
Self-funding patients normally express amazement that they haven’t been invoiced.
More than a few have put forward the view they thought they would have been invoiced ages ago.
Some have even said they’ve called the consultant surgeon’s secretary to ask where the invoice was and still nothing has arrived.
There is a very simple remedy to this problem.
Send the invoice.
What is much more problematic is the same issue with a private medical insurance company.
This is especially true where, as part of the consultant’s recognition criteria, the insurance company insist all invoices are submitted within 6 months of the episode date.
It matters not one jot whether the episode was surgical or a consultation.
The invoice must be submitted within 6 months of the date.
This is precisely the situation I faced late last year when reviewing the billing process of a northeast based ENT surgeon.
She had just over £4,250 worth of invoices for a single insurance company that had NOT been invoiced.
They were all way over six months old.
Worse still they added up to just over £4,250.
The wrong solution to this is to ask the insurance – politely or forcefully – to accept the invoices even though they are so “old”.
Most likely the private medical insurance company won’t agree to even look at them.
It is irrelevant to blame the insurance company.
A complete waste of time.
The correct solution is to consider HOW this situation had been allowed to happen.
In other words, be much more concerned there is not another £4,250 worth of surgical episode or consultation that hasn’t been invoiced. Hopefully, the value will be less but you need to check.
In most cases, there will be uninvoiced outpatient appointments. Sometimes entire surgical procedures have not been invoiced. In all cases, you need to find out.
You should also make sure a robust process is in place to prevent this from happening again. How?
The simplest of daily or weekly routines. The sanity check.
Using one of my current clients as an example, I know he holds two outpatient clinics per week and is in theatre once a week.
Therefore I should see two clinic lists and a theatre list every week.
If I don’t, I call his secretary.
Sometimes, I’ve only received one clinic list because there was only one clinic. Other times though, there were TWO clinics but she has forgotten to send me the 2nd clinic list.
Sometimes he hasn’t returned the clinic list.
The important point is that we know about it and make sure the discrepancy is sorted.
A very simple sanity check will prevent a build-up of uninvoiced appointments or surgical episodes. But do not think this is a “should” check.
hen each week, ALL MHM client’s get a spreadsheet. ONE document. All they have to do is check, the clinics have been invoiced. Surgical episodes are on there too.
This is very much a “MUST” check.
If you don’t, it is so easy to end up with £4,250 worth or surgical episodes or outpatient appointments that you can charge for but will almost certainly be refused for payment by the insurance company.
Then you may have to contact your patient and explain due to your own poor administration the patient must settle your bill.
I have no issue doing this even for we are where we are. I have to say in most cases the patient is not at all impressed!
It’s so much easier not to put yourself in the position in the first place by performing a sanity check each week.
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Most excess charges are between £75 or £100. Sometimes they can be higher or even lower but often they are £75 or £100.
This in itself is not a problem. It’s just as easy to send an EXCESS INVOICE out for £75 as it is for £100. The problem arises though when the patient either pays by BACS or sends a cheque in.
It’s not unusual at all to see the same values on the client’s bank account statement with no details against them.
Thus when you come to do a bank reconciliation how do you know who has paid what?
The simple answer is when you raise an invoice for an excess charge make sure you ask the patient to quote a reference.
The reference must be unique as it always should be for an ordinary invoice anyway. Then you will be able to identify who has paid.
But do patients really pay without quoting the details? Don’t they always put the invoice number with their BACS payment?
Reality check – no they sometimes don’t.
If you don’t ask them to in any event you are fairly certain to end up with un-identified payments on the practice bank statement. And that is bad news!
Its bad news because it leads to excess invoices being paid and not being recorded as such. Many times MHM has been called in to chase old debt i.e. debt over a year old and in doing so receives numerous phone calls and emails from patients who claim to have already paid. Indeed they have.
So the reality of the situation is for the client to believe they are owed thousands of pounds from say 2 years ago when they are not. All this can be easily averted if when a payment is made for excess it is correctly recorded on the ledger. If the payment cannot be identified it should be shown as such on the ledger also.
It is very easy to do this.
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I’m used to insurance companies declining to pay a consultation charge for an Orthopaedic Surgeon within 10 days of surgery.
The reality is that this does not impact only on Orthopods.
I’ve seen it happen with GI Surgeons. And I’ve seen it with ENT clients.
It’s the very reason before I invoice consultations within 10 days of treatment, I ask if the consultation was “routine”. Or if there were additional medical reasons.
But it is only the consultant surgeon who knows why the consultation took place.
If routine, a post-surgical follow-up within 10 days, might not get paid.
If on the other hand there were medical reasons, then it is possible.
Call the insurance company and provide evidence on WHY the consultation was necessary.
Nine out of ten times you will get paid.
The insurance company is NOT the enemy.
But what does throw me is when it is an initial consultation that has been declined because:
“Under the patient’s policy benefit is only payable when treatment is related to an eligible in-patient or day-patient stay within six months.”
How can an initial consultation be refused under such conditions?
What I’m actually being told is the consultation is not covered under the terms of the policy.
That is different.
I did suggest to the insurance company it amended the wording to read: “initial consultations are not covered under your patient’s scheme”
Where I have the problem is asking an unnecessary question. If the insurance company had made it clear WHY the consultation was declined there is no reason to call.
In the time I’ve taken to resolve the query I could have called the patient and I could have obtained payment for the declined consultation for one thing.
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Flip the question on its head.
Would you pass over your debit card details without knowing how much is going to be charged to it?
99.9% of people would say NO.
That’s today’s blog over then.
Or is it?
Because how do you know how much you can charge anyway?
In the case of self-funders, you can charge whatever you want.
Contrary to popular belief there is nothing to force you to charge as little or as much as you want.
Whether you’ll get paid as much as you want is a different matter for the self-funder has a choice.
He or she can either agree to pay the fee you quote or they can decide not to.
It’s that simple.
So, consider the following. You are a GI Surgeon and want to charge £250 for an initial consultation. But your colleague GI Surgeon down the road only charges £150.
Which is the right amount?
They both are.
It’s up to the patient which one they accept.
I’ve actually known some patients pay a higher fee because a particular consultant saw their neighbour last year and “he was lovely”.
Conversely, I’ve also known as patient decline to go see a surgeon because they said the fee was too high compared to those of another surgeon.
The original question however remains. Should you publish your fees?
In the case of self-funders, you should.
In the case of insured patients, you should state – or publish – that your fees will be in line with those stated by the patient’s insurance company.
I once debated this point with a consultant surgeon who forcefully stated it was wrong to publish fees.
Because, in his view, it might put the patients off.
That seriously worried me.
More specifically, the thinking behind it worried me.
If your patient isn’t told how much the fee is before the consultation and then decides, realises or even claims they can’t afford that much what position does that leave you in? Not a very nice one in my view.
Patients do not, however, base the decision to see a certain consultant only on price.
There are a whole host of reasons why they chose to see one private consultant surgeon over another. Recommendation. Geography. On-Line reviews. They are just three of many different reasons. An additional reason is of course cost.
But it’s not the only reason.
Therefore, tell your patients how much you charge.
After all, would you buy something without knowing how much it cost?
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After a recent presentation, a private consultant surgeon telephoned me. He wanted all his fees checked.
He heard about the MHM fee checker from a colleague who had attended the presentation so he wanted to commission a full review of his fees.
But he wasn’t so much a colleague of an MHM client. More he was married to one!
The standard charge for doing this is £100; sometimes it takes a few hours, sometimes it takes a whole day.
But as the husband of a current client, he got a freebie
To do it accurately however, you literally have to shut the door and have a “do not disturb” sign also.
You first need to know precisely where to look!
Especially with this surgeon as I calculated he had 204 separate fees to check.
It is very much a case of paying attention to the detail relating to each fee. This one took me about 6 hours and was emailed to the consultant on the same day.
During those 6 hours, I identified 2 fees that were wrong.
Save the fees published by the two insurance companies concerned were actually HIGHER than the consultant had been charging.
He had undercharged for his services.
In one case he had undercharged by £150 (21%)
In the second case, he had undercharged by £21 (16%)
So he immediately amended his fees and started to charge the correct amount.
He called me this morning; the last working day of the month.
So far and by using the correct fees he had charged and been paid an additional £513.
Of course, fees can go down as well. Sometimes the consultant’s fees are absolutely correct too.
But if they go UP you are literally undercharging for your services. What made it worse for the consultant concerned is that the fees had gone up at the end of September so he estimates he has missed out on around £1,800.
Look at it this way and work the maths out. He has earned an additional £513 this month. Less the £100 it should have cost him (my fee) he is still £413 better off.
I should have charged him after all. Nah!
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In one single sentence the cornerstones of how a private consultant surgeon can achieve the financial reward for all his efforts.
Every single time you perform an outpatient clinic the details are passed on.
Invoices can then be raised and sent to either an insurance company or a self-funding patient for payment.
Every single time.
Do NOT make the mistake of collecting them ready for “later in the month” because “later” never comes. Or at the very least you are risking an issue coming up which will either delay or cause invoices not to be raised at all.
Instead after every outpatient clinic, the details are passed over for invoicing. I’ve got some clients who actually take a photograph of their clinic list on their smartphones and send it to me securely. It’s a ritual with them.
Is it any surprise such private consultant surgeons get paid quickly? Other MHM clients have the clinic list (s) sent over every Friday afternoon without fail. They get paid quickly too.
It’s a ritual for them.
Contrast that with another MHM client who sends all the data over infrequently. Sometimes at the end of each month or more often than not every couple of months or so.
This client does not get paid as frequently as the others. The reasons are somewhat obvious.
Ritual is also applicable when dealing with excess or shortfall payments. The moment you are notified, you MUST action them for the longer they are left unattended the danger of non-payment increases.
I check every single remittance advise a private medical insurance company sends in. Any and all shortfalls/excess deductions are actioned the very same day.
It is a ritual.
Religiously – MHM check every single piece of data BEFORE an invoice is submitted for payment.
The policy number is checked to see if it has changed.
The patient’s date of birth and postcode is checked to see if that has altered.
The CCSD code is checked and the fee also checked against the appropriate insurance company’s fee schedule.
If there is a discrepancy, it is corrected.
Then – and only then – is the invoice submitted for payment. Religiously.
So how does just doing these two things contribute so much to a private consultant surgeon achieving his rewards?
Both cut down the opportunities for payment to be delayed, queried or not made substantially.
The crazy thing is the one piece of “equipment” used more often than any other at MHM to ensure both are achieved with the minimum amount of distress both to MHM and its clients?
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What follows is absolutely real and why medical invoicing can be more troublesome than it need be.
One of my guys ran an outpatient clinic last Thursday
The clinic list arrived with me on the following Monday. There were 8 patients: 3 initials and 5 follow-ups.
Within 30 minutes 7 invoices had been produced and delivered to the various insurance companies. But that final EIGHTH invoice caused significant issues. Why?
The patient’s insurance details had not been recorded correctly.
So I rang my client’s medical secretary and ask if she knew what they were. The FIRST phone call – I’m told the patient is with insurance company A but did not know his policy number. Length of the phone call: 5 mins
A SECOND phone call was necessary. This time to the insurance company. I was on hold for 11 minutes to this particular insurance company which is about normal for an insurance company. Some are 4 – 5 minutes. With some, you are on hold for considerably longer.
Once I got through however despite having the correct name, date of birth and postcode I was informed the patient’s policy had lapsed.
Length of the phone call: 11 minutes plus 5 minutes = 16 minutes.
A THIRD phone call was made. This time to the patient. Answer machine so I left a message to call me back. He did. The patient confirmed it was totally the wrong insurance company. He told me the correct insurance company but did not know his policy number!
Length of phone call(s) 5 minutes
A FOURTH phone call to the other insurance company. Placed on hold for TWENTY-THREE minutes! Finally, get through and I’m advised the correct policy number, etc. Invoice raised.
The total length of phone calls: 49 – FORTY-NINE MINUTES!!
There is no problem with spending 49 minutes on the phone; none whatsoever.
But just consider the problem if the medical secretary at the same time as that had patients trying to speak to her? Or she had correspondence to get out? Or she had clinics to book?
She would have struggled for sure.
Finally, consider how much easier it would have been if the patient had been asked to bring a copy of their insurance details with them when they registered.
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Don’t say – “all the details should be obtained”.
Say “all the details MUST be obtained”.
In other words, turn “should” into a must. But why is this so important? And why must you do it every day?
Many clients have asked why mhm obtains payment so quickly from insurance companies or from a self-funding patient.
The number one reason is that I don’t use the word “should”.
I use the word must.
And that is why it is so important – the consultant surgeon gets paid quicker. When I work alongside a medical secretary – the most underappreciated person in any medical practice normally – I emphasise the absolute need to get all the patient’s details.
For example: make sure the details are correct, make sure the patient’s policy number is correct, make sure the patient’s date of birth and postcode are correct.
When should this be done? NOW. It should be done every single time you have a patient in front of you or are reviewing a patient’s details.
Once all the details are correct – as they must be – the chances of getting paid increase dramatically.
This isn’t done in an aggressive manner at all. Far from it. In fact, 99.9% of all med-secs understand the reasons why and are only too glad to help. Most likely because most med-secs do not like “accounts” or “having to chase for money”
In other words, it is a state of mind.
It is a state of mind supported by very strict adherence to a number of routines.
Actually the word routine itself is not strong enough.
It’s a discipline.
It is the discipline to make sure all the details are obtained when the patient registers. It’s the discipline to make sure the clinic list is sent down to me every single week.
And finally, it’s a discipline to make sure all the invoices are raised, checked and delivered either to an insurance company or direct to a self-funding patient.
And that’s why mhm clients get paid so quickly.
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I’ve been asked to revisit why coding is such a big part of medical invoicing.
It is integral because without the correct code the chances of getting paid decrease. It is unlikely if you wish to invoice electronically you will be able to invoice without a code anyway.
Insurance companies use medical coding to identify and detail a procedure. For example, an Orthopaedic surgeon will understand precisely what a Multiple arthroscopic operation on the knee is.
But that’s a lot to put on an invoice. Plus there may be variations in the episode.
Instead, use the code W8500. That will specifically identify the surgery you have done.
If you are planning to invoice electronically you won’t be able to input the whole description anyway.
So where do you find the code?
CCSD codes can be located on the CCSD website.
The Clinical Coding and Schedule Development Group (CCSD) consists of the five major healthcare insurers – Aviva, AXA-PPP, BUPA, Simply Health and Vitality Health.
Its main purpose is to maintain a common standard of procedure codes. Such codes reflect current medical practice within the private healthcare sector. They are published as the CCSD Schedule of codes.
The various insurance companies will, therefore, recognise the majority of codes.
However, a word of caution.
Whilst the example above of W8500 will be recognised, a CCSD code does not come with a suggested fee rate.
The fee rate for each code is up to the individual insurance company concerned. To find the correct fee for the code, you will need to check with that insurance company.
For example, the W8500 mentioned earlier carries a fee of £615 for one insurance company. For a different insurance company, the fee may be £550. If you charge £550 instead of £615 by mistake, you will NOT have your fee increased.
If however, you charge £615 when it should be £550, your fee will be reduced.
Whilst not so important for consultations, a CCSD code is imperative IF a surgical episode is required. The patient must quote the code to his or her insurance company when pre-authorisation is being requested.
When an invoice is sent to the insurance company, the code should appear on the invoice, This will reconcile to that expected by the insurance company.
If alternatively, you do NOT use CCSD codes payment will be substantially delayed if made at all!
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I’ve been reading a really interesting book.
The book goes into some detail on how decisions are made.
What the process is?
Which factors are included?
Why are some factors excluded?
When is a decision made?
Why has a decision been made?
I could read about things like that all day. Probably because I’m sad.
The book reminded me though of a group of surgeons who commissioned a review of their practice recently. The issue concerning them was the amount of money they were owed and the ineffectiveness of the attempts to reduce it.
Consequently, I spent a couple of hours looking, listening, probing and establishing the CAUSE of the issue.
Or as my old mentor and teacher used to say to me every single time I was given a project: ESTABLISH THE FACTS.
In the case of the group of surgeons mentioned earlier, this itself was problematic.
Whilst it was very easy to establish the practice was owed huge amounts of money, it was not so easy to establish WHY. That is until I witnessed how the practice was being run.
In one single month, there were 36 separate consultations worth £4,500 which could not be invoiced. Why?
Because the senior consultant surgeon had instructed the medical secretaries not to ensure the patient’s details were correctly obtained at the point of registration.
It was more important, in his view, that the patients were registered quickly and professionally.
No argument from me on that point. However, that one single decision taken without thought as to the full consequences was the cause of numerous issues.
The consultant surgeon concerned took great pride in his ability to take instant decisions.
It never occurred to him though that you don’t always have to take an instant decision. Indeed most of the time it is better not to.
Notwithstanding that, when I spoke to the senior consultant he would not accept the need for the correct details to be obtained.
In his view the details being obtained were sufficient. That is fine IF his view is correct. Sadly it is not correct. His view, very respectfully, was not the one that mattered.
The view that did matter was the one held by the various insurance companies to whom an invoice would be sent.
They held power. In other words, if their standards were not being met then they would refuse to accept an invoice let alone consider paying it.
In the case of the group of surgeons I was working with, the invoices could not be raised because much of the mandatory data needed was missing.
Many times I’ve argued with an insurance company. Not one single insurance company but all of them at one point or another.
My job is to ensure my clients get the very maximum they can for their work.
If an insurance company make a mistake – it actually happened last week with one of my guys when the insurance company rejected an invoice as being a duplicate of another invoice (it wasn’t) – then I go into bat and argue the case.
Normally I win too.
But I will never object to an insurance company insisting medical invoicing is done correctly.
There are no excuses for doing it incorrectly.
The only outcome if a consultant surgeon does not ensure that his or her invoicing is done correctly is simple: the insurance company won’t pay.
Returning to the group of surgeons mentioned earlier, it was clear WHY they were not getting paid. They were not invoicing correctly.
And that is the one topic I’ve always driven right at.
Instead, the consultant surgeon concerned was issuing immediate instructions at the medical secretaries in the practice when faced with an invoicing problem to “ring such and such straightway” or “go to reception and get this done before anything else” or “immediately do this instead”
But the decisions he was taking were themselves causing subsequent issues.
He had forgotten or was ignoring the necessity to get things right the first time. For example: when the patient registers with the practice make sure you get ALL the patient’s details correct.
“That is only a small item so can’t be that important” came the response from the Consultant Surgeon concerned.
To his credit, he agreed to stop firefighting and concentrate on getting the details right first time
In the first month, the number of episodes which couldn’t be invoiced fell to 1. The value which could not be invoiced fell to £125.
Cash input into the practice shot up an amazing 756%
All because instant decision making has stopped.
All because the invoicing was now being done correctly.
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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 was 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.
It’s very much a case of “picking your arguments” and challenging an insurance company in the right way and on the right subject.
But it is also very, very much a case of noticing that the insurance company has 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!
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Having analyzed where the private practice is both in terms of outstanding accounts, it is important to have a structured and rational action plan.
Why do it this way though?
On numerous occasions, MHM has been called in when previous attempts to resolve an accounts issue have failed. The number one cause of this failure is the tendency to mistake movement for action.
For example, one group of surgeons had previously ordered all outstanding invoices be resent to insurance companies and self-funders. This was always doomed to fail.
It didn’t take much to work out that if invoices hadn’t been paid in the first place as they were wrong, sending them out again wouldn’t achieve anything. It didn’t.
If you wish to reduce the amount of money you are owed, the first thing you should do is to ensure the amount does not get higher!
It was no mistake that the four blogs published this week appeared in a specific order. This was no accident. They appeared that way by design.
If you do not know precisely where you are now, you will NEVER reach your destination. Do not think you know where you are. Make sure your core data is robust, up to date and accurate. Then keep it that way! Otherwise, over time you will go backward.
You MUST ensure your invoices are completely accurate. INVOICE RIGHT = GET PAID RIGHT! This means checking your CCSD codes, checking the fee for each code across all insurance companies, checking you’ve got all the right patient details, etc. INVOICE RIGHT = GET PAID RIGHT!
There is simply no excuse for not posting payments to your debtor’s ledger.
If you do not, then very rapidly your data will become useless. Recently, a consultant surgeon claimed to me posting payments to a sales ledger was not as important as chasing invoices for he was in his words “more interested in what hadn’t been paid than what had”.
This almost certainly was the origin of £’000 worth of unpaid excess and shortfalls which he was horrified to discover existed but that he was completely unaware of.
If payments are monitored then identification of excess/shortfalls is quicker. It was also put your practice in the position of being able to do something about them. That must mean contacting the patient and having a robust process to ensure excess and shortfalls are collected. Failure to do so WILL cause all sorts of problems for you.
Do not mistake movement for action.
It literally is similar to building a house. If the foundations are not solid, the chances are the house will collapse. Yet some consultants make the mistake of “actioning” an accounts issue without establishing what really is the cause. Do not become one of them!
The bad news is whilst the original identification and investigation of each step should be allowed sufficient time to be completed correctly, as they impact on each other so much, implementation of an action plan, should be done all at the same time.
The ultimate management challenge – how to change but stand still all at the same time!
If you know what to look for and have devised action plans before, this whole process can take around two weeks. If you do NOT know what to look for and devote enough dedicated resources (and there are many, many more points than have been covered in four blog posts) allow for about 3 months worth of trial and error.
Most likely if you are experiencing issues with getting paid, not devoting enough dedicated resources caused the issue in the first place.
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Excess and shortfalls are the biggest headaches any private medical practice will face. You will not stop them despite what you may think so you MUST have a process in place to identify them and action them.
What are excess and shortfalls?
Just like your own car insurance when a patient takes out medical cover, the policy will have an excess. For example, the patient is liable for the first £100 or £250. The value of the excess will be dependant on the precise details of the policy.
Normally, lower insurance premiums are accompanied by higher excess amounts and vice versa. You may, of course, ask the patient what excess his/her policy has and that will help. But that will NOT stop you from having excess deductions made against any payment for your services made to you.
Each private medical policy will have its own maximum entitlement figure. This is known as the benefit payable.
For example, the total benefit that may be paid out under a policy says £12,000 in any one year (just an example to illustrate the point).
That seems fine until you realise the average cost of a hip replacement in the UK is currently around £11,500. If the patient requires additional consultations (say £500 worth) and additional costs appear (another £350 for example) then the total cost will soon exceed the total benefit of £12,000 i.e. the total medical fees of £12,350 is greater than the benefit payable.
Thus the shortfall (the patient’s liability) in this example is £350.
If there is already a £100 excess on the policy and a £350 shortfall, the patient’s personal liability to you will be £450.
This may be an extreme example but it is the principle that is important to understand.
In reality shortfalls and excess payments are normally around the £75 to £100 mark respectively. That doesn’t seem a lot but have 10 shortfalls/excess a month and over that one month, you will be owed £750 by your patients personally.
Over a year you will be owed £9,000.
That is why excess/shortfalls are one of the biggest problems faced by a private consultant surgeon.
Once shortfalls/excess have been identified (preferably as they are actually deducted from payments made to you), you must have a robust process in place to manage them. That can only be done one way.
You MUST CONTACT THE PATIENT, there is simply no alternative.
The first thing to do is to send your patient an invoice for the excess or shortfall.
This should include how much to pay and how to pay it. If this invoice is ignored by your patient then the best solution is to telephone the patient and ask for payment. The longer an invoice for excess or shortfall remains outstanding, the likelihood of it being paid reduces.
You must act quickly: preferably every single week.
Whatever you do, therefore, do NOT under any and all circumstances leave excess and shortfall amounts unattended.
Excess and shortfalls can simply build up and up to the point where you realise you are owed thousands and thousands of pounds with little chance of getting paid.
Consider it this way.
You cannot prevent excess and shortfalls from happening.
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Yesterday we established how to find precisely where your private practice is as regards debtors. Now we need to look at the invoicing process.
But Do NOT react to a high level of outstanding invoices by immediately sending hundreds of copies out.
Step back instead and consider if the problem may not be external.
For example, one group of surgeons in a knee jerk reaction when faced with outstanding invoices sent thousands of copies out.
Almost immediately the switchboard lit up. Some callers claimed the original invoice had not been received. Others said it had already been paid or the invoice should have been sent to an insurance company.
Fine. It got a reaction. Sadly, however, only a small percentage of payments were received as a result.
Hence the need to step back and consider the CAUSE of the problem.
Start with how the invoice is delivered to the patient’s insurance company or directly to your patient.
If you haven’t delivered your invoices electronically (by EDI) to an insurance company, you are on the back foot straight away.
EDI is pretty much guaranteed to deliver an invoice to an insurance company.
But if you have already sent the invoices by EDI and they still haven’t been paid it is a good indication your invoices are incorrect.
Contrary to the claims made by some, insurance companies are not the enemy. They will and not willfully withhold payment to a provider. I’ve never known it.
If your invoice is wrong, however – incorrect fee, wrong CCSD code, incomplete patient details, etc – then your invoice will be rejected by an insurance company.
Thus it is most likely an INTERNAL reason why you are not getting paid:
The most common internal reason an invoice is not paid, if you haven’t made sure you have all the right details on your invoice.
How many times have I written: INVOICE RIGHT = GET PAID RIGHT?
This is a must. There is no way around it. It is mandatory. You must tackle it.
Having ensured you are invoicing insurance companies electronically & the data on the invoice is correct, the next item then is an invoice to a self-funding patient.
Invoices to a self-funding patient require pretty much the same amount of detail as those to an insurance company save they need two additional pieces of data on them:
Where they should be paid (your bank details in other words)
and the statement:
“this amount was not covered by any debit/credit card details taken at your hospital”
That last sentence helps to overcome the single most quoted reason a patient calls and claims he/she has already paid for a consultant’s services.
So by now, you know your invoices both to an insurance company or a self-funder are correct and are being delivered.
In other words, you have by attacking the problem put your practice in the position that it may, very soon, start to attack the level of outstanding or overdue debt.
If the amount of debt is high and/or has been outstanding for a while another day won’t hurt. Next, you need to consider if, when and how you’ve already been paid!
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It was the classic environment where chaos reigned supreme.
There was a serious amount of money outstanding.
It didn’t take long to work out why.
The problem was the practice principal.
He insisted everything had to be done immediately.
And therein lay the problem.
Resolving every problem immediately didn’t allow sufficient thought as to what the problem really was. Nor did it consider the cause nor allow time to consider the options.
Instead, the problem was receiving less than a minutes attention.
The cause of the problem was ignored.
Any and all businesses require a plan.
Without one it is difficult to track where the business is going. Simple said the practice principal. The plan is to see as more patients.
It never occurred to him that practice management is important.
It should not be subject to a stream of quick-fix solutions and absolutely not when the cause of the problem hasn’t been established either.
Once the plan and goals were actually defined, the functions of the practice need to be split in two.
Primary and secondary.
The identification of primary productive areas and secondary non-productive areas is done by using a value chain. Devised in the mid-’80s by Prof Michael Porter it is one of the simplest management tools. So, what is primary? What is secondary?
Primary: anything directly focused on your patients.
Secondary: anything not patient-focused.
Anything secondary should be outsourced.
Thus practice staff will be free to concentrate on their primary area: patients.
The extra time generated will allow the practice to speak to MORE patients.
It’s a case of concentrating on what the practice is there for. If you measure your practice against a value chain, you’ll discover the primary values are supported by secondary values.
Outsource secondary values and the practice will become more profitable.
Yet numerous private practices make the mistake of not distinguishing between primary and secondary functions.
With the result, chaos reigns supreme.
The practice doesn’t work as well as it should. For example, numerous patients were complaining the practice telephone wasn’t getting answered. And they didn’t care.
They telephoned another consultant instead.
The practice principal totally disagreed. Secondary “non-productive” areas should be ignored. Concentration on “primary productive” areas would take precedence. More patients. Always more patients.
He still insisted on solving problems immediately.
Sadly his only answer was to blame everyone else.
His 150 miles an hour approach might explain why the practice had gone through 4 practice managers in just over 32 months.
The above happened just over 2 years ago. The practice principal called me last week. Sadly it appears I was right all along.
He hadn’t avoided the CHAOS FIELD.
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Not getting paid doesn’t happen by accident.
Something causes it to happen. There is ALWAYS A CAUSE.
If you leave invoicing until later (Friday for instance) it is very easy not to invoice at all. It can happen also if, for whatsoever reason, you leave invoicing until “tomorrow”.
Tomorrow turns into never.
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?
Nine out of ten times such an approach is a big clue as to the reason why the practice is not enjoying the level and frequency of cash it should be.
If you want to ensure your practice is paid promptly, the very first place to start is raising an invoice. It is crucial. And invoices should be raised DAILY!
Once a week is not helpful.
The danger in invoicing on a Friday or a Monday or only on any 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. There is no backlog.
Let me give you a real-life example.
Tuesday, November 5th 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 Monday, November 18th, – 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 and remedy had been left until “later”!
In all £1,325 worth of invoicing had been missed.
No wonder cash flow was poor.
But before we go any further do NOT blame the medical secretary. She has enough to do. The phone rings or she has to meet and greet the patients. She has numerous letters to type.
That is precisely what she should be doing for 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 and nor should she.
In the above example, the solution was obvious. Either get someone in to process all the invoices and the cash receipts or outsource it.
Private medical practice is a business. It must be managed as a business; end of.
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.
DON’T LEAVE IT UNTIL FRIDAY – DO IT NOW!!
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