Do you know that more than $10,000 hospital bills contain errors of around $1,300? This was revealed in an audit conducted by Equifax. The common challenges that the practices face in medical billing are errors, denials, and difficulties in compliance. Consequently, practices are left with costly penalties and fines. Hence, an effective understanding of frequently occurring errors and challenges in practice is of the utmost importance so that you may figure out strategies to control issues and improve your practice for the best efficiency. Here’s a detailed guide, enlightening the way how to tackle commonly occurring challenges in medical billing and strategies of optimization for the practice’s lasting success and improved patient care. Explore the top ten challenges and strategies to overcome challenges in medical billing.
- Accuracy in Coding and Compliance Issues
Inaccurate coding poses a great risk to healthcare providers, including claim denials, underpayments, and audits, which result in financial losses and increased administrative workload. Studies show that coding errors account for up to 30% of claim rejections, directly affecting revenue cycles. So, efficiency is the core of ensuring a safe practice, specifically in coding and documentation. In healthcare terms, the accuracy of practice means all the billing steps must ensure adherence to the regular updates from patient registration to claim submission and final receipt of reimbursement. Efficiency will lead professionals to experience fewer risks and error-free frictionless reimbursement. Plus, accuracy and correctness in coding and billing will yield fewer compliance issues.
Solutions to overcome
The solutions to these accuracy challenges include practices such as initiating the process with education and training. Medical billers and coders must be trained enough to handle ever-changing billing updates. Periodic training helps reduce errors that cause claim denial or underpayment. Coding audits and quality assurance processes can help detect errors before claims are submitted, thus enhancing accuracy. The use of real-time coding software with compliance checks helps support this effort. Collaboration between the billers, coders, and clinical staff helps ensure complete and accurate documentation of services delivered for timely reimbursements. Researchers show that coding error can minimize claims rejection to a level as low as 30%, therefore optimising the entire revenue cycle efficiency.
- Claims Submission Delays
Late submission of claims is another significant challenge recorded by recent research. One of the 2024 surveys reports that 73% of healthcare providers report the rate of claim denials is on the rise. On the other hand, 38% of providers have denial rates of 10% or more. When a practice faces denials, it doesn’t mean only the stretch of payments but also that administrative costs are doubled. Meeting timely deadlines and filing claims for recovery cost more than earlier operations. In 2022, only providers spent $20 billion on addressing delays and denials for all types of payers. However, around $10.6 billion of those were “wasted” on claims that should have originally been paid. The provider should, therefore, invest in efficient claims processing systems and ensure that the claim submissions are timely and accurate to avoid denial and maintain healthy cash flow.
Solutions to overcome
- Use automated systems for real-time claim submissions.
- Set internal deadlines to ensure timely filing.
- Staff should be trained on how to code accurately.
- Efficient integration of EHR/PM systems that will help ease the operation.
- Regularly track the claim status and progress for coding accuracy and submission.
- Consider outsourcing as an all-inclusive option.
- Keep yourself and your staff updated on payer-specific updates on deadlines.
- Ensure your practice ensures regular audits that will help identify the problems and ways to improve.
3. Management of Denials
A big challenge to healthcare providers claims denials affect revenue and increase administrative costs. It is reported that 20-30% of the claims are denied at the first attempt, which involves a considerable amount of time and resources for the process of appeal and resubmission. This causes delays in reimbursement but also increases workloads for the practising staff. On the other hand, effective denial management and effective measures can only reduce the denial risks. Moreover, effective management will also increase the practice’s cash flow and operational efficiency. As a result, professionals will experience a decrease in denial rates by up to 30%.
Solutions to overcome
- Effective measures for tracking a denial management system are included.
- Analyzing and evaluating the trends that cause denials to trace out the improvement strategy.
- Staff training and education to handle re-submission and appeals error-free.
- Communicating effectively with payers to resolve denial issues.
- Automation integration for denial alerts and quick workflows.
- Using data analytics that help in predictions to address the causes earlier.
4. Compliance with HIPAA Regulations
Compliance with regulatory policies is the backbone of every practice, and medical billing is no exception. These authoritative laws guide and govern the billing operations of healthcare bodies so that the practices prevent potential risks. In the context of medical billing, ensuring compliance with HIPAA, ACA, state laws, and Medicare/Medicaid guidelines is the top priority of healthcare professionals. In contrast, non-compliance may cause issues of legal repercussions, penalties, and lost revenue. Plus, you will lose your practice reputation to attract more patients. However, adhering effectively to these guidelines is much more challenging due to the changing nature of these rules. Hence, professionals need to maintain their expertise or invest in resources to maintain up-to-date knowledge of relevant laws in billing and optimize reimbursement.
Solutions to overcome
- Regular reviews are more crucial than anything when it comes to staying compliant with standards.
- Periodic internal audits by the in-house practice can help adhere to regulations.
- Keep yourself aware of the changes in HIPAA and ACA, as well as the guidelines from Medicare/Medicaid.
- Ensure ethical billing practices while training and preparing your staff.
- Automation and tech support can help with accuracy and efficiency billing.
- Clarification of documents is of utmost importance for all claims to assist audits.
- Collaborate with legal advisors to address compliance risks.
- Use real-time compliance checks to prevent violations before submission.
5. Benefits Verification and Patient’s Eligibility Checks
Failure to verify patient eligibility and benefits correctly can lead to claim denials, which puts patients in an unexpected financial situation. Correct checks of patient insurance and coverage are crucial to help patients manage their budgets and avoid additional out-of-pocket. Plus, your practice may be at ease while knowing exactly how much the patient’s insurance can cover. Inappropriateness in verifications may also lead to compliance issues and late payments from insurance. Not only that, but you may also lose patient trust and satisfaction with your practice. When verification is errorless, your practice will expense fewer denials and additional administrative tasks.
Solutions to overcome
- Make a strategic plan and approach to verify patients’ benefits before treatment.
- Real -time verification tools may help significantly in crucial checks.
- Staff education and training are of core importance during the intake process.
- Patients must be communicated and informed earlier.
- Update and reconcile the details of patient insurance regularly.
- Cross-check eligibility with both primary and secondary insurers.
- Develop a protocol for re-verifying coverage before high-cost procedures.
- Integrate automated alerts for expired or inactive insurance plans.
6. Collection Delays
The high processing time, the sheer volume of claims, and inefficiencies in administrative procedures are the reasons healthcare providers face a lot of delays in the reimbursement of claims. According to one study, for Medicaid-paid visits, the median delay to payment was 59 days, with a range of 12 to 478 days.
The median reimbursement period for patients with private insurance is 63 days. Such protracted intervals may result in increasing overhead expenses and cash flow loss, which could have a domino impact on the healthcare revenue cycle.
Solutions to overcome
- Your investments in billing and claims software are worthy.
- Reduce efforts and increase efficiency in the billing process with tech support.
- When internal processes are smoothly handled, submissions can be expedited.
- Prepare clear timelines for when to follow up and track claims.
- Electronic remittance advice (ERA) will speed up payment processing.
- Dedicated experts like the MedsNexus team will handle your collections quickly.
- Checking and monitoring payer timelines will help.
7. Using Outdated Software and Technology in Billing
Make sure the practice uses the updated software in billing and coding to avoid attracting risks. Outdated software significantly lacks recent data on changing policies since these systems align with and are compliant with regulatory guidelines such as HIPAA. Outdated software may ultimately lead to costly errors and fines. One of the current studies found that 63% of healthcare organizations encounter challenges while staying compliant because their systems are outdated in practice. Moreover, outdated software usage may attract the risk of data breaches and billing discrepancies. As a result, the professionals face improper Claims, late payments from insurance, and audit issues. Practitioners must keep billing software up to date before practising billing so that they can prevent risks and ensure the smooth functioning of the billing and the entire revenue cycle.
Solutions to overcome
- Make sure your software is HIPAA-compliant and is capable of securing patient data.
- Make a schedule earlier to adapt to changing regulations.
- Staff training is crucial for upgrading billing systems to ensure accurate results.
- Integrate with software; however, ensure you are compliant while detecting errors.
- Regular checks should be made on how these software are working.
- Ensure you are opting for cloud-based systems that ensure scalability and updated features.
- Make a recovery plan in advance to prevent data breaches.
8. Duplicate Billing
Duplicate billing is defined as billing a patient for the same service two or more times. It results from human mistakes or system breakdowns. In fact, about 1 in 10 claims are denied due to this error, thus risking fraud investigation. The way to avoid these errors is for healthcare providers to establish an efficient tracking mechanism that checks every claim for at least one cross-checking before billing a service. Regular audits on billing processes identify and resolve problems with duplicate billings before large financial losses are incurred and violations are reported.
Solutions to overcome
- Implement a tracking system to cross-check claims pre-submission.
- Conduct audits regularly to address duplicate billing issues.
- Using billing software and tech support will lead to fewer errors.
- You must ensure alerts and notifications to detect duplication.
- Collaborate and communicate with insurance payers to resolve the issues.
- Make sure the documentation contains each and every detail.
9. Management of Payer Contract Terms
Different insurance payers have varying requirements in terms of billing, insurance, and claim provision. Managing these varying requirements also poses a challenge for providers due to the differences. Issues usually occur in managing fee schedules, reimbursement rates, and multiple-payer contracts.
Healthcare providers should thus develop strong contract management systems, which standardize and automate the tracking of payer agreements. Auditing and staff education should be undertaken periodically to prevent any form of billing practice inaccuracy and lack of compliance. All these steps help the providers optimize revenue cycle management and avoid possible underpayment or overpayment issues.
Solutions to overcome
- A centralized system can help resolve multiple-payer contract issues.
- Make regular audits for compliance and accuracy.
- Contract tracking can also be automated to ease the extra workload.
- Payer terms must be known to every partner of practice for agreements.
- Staff must be trained on varying details of the payer contract.
- Review reimbursement rates regularly to help adjust billing.
- Communicate contract terms with the insurance provider using performance data.
- Effective integration of tech-supporting tools will ensure compliance while identifying issues earlier.
10. Optimization of Revenue Cycle Management (RCM)
Inefficient RCM processes for healthcare providers present a significant challenge in terms of delayed payments, increased claim denials, and a decline in financial performance. The Healthcare Financial Management Association claims that healthcare organizations lose about 30% of potential revenue because of RCM inefficiencies. Navicure’s study shows that 40% of healthcare providers cry for denials as a major practice concern. However, a streamlined RCM process can address these challenges by using the latest technology. Automating billing workflows also ensures smooth staff training and fewer errors in practice.
Solutions to overcome
- Practices must follow the advanced technology for revenue cycle management (RCM).
- Regular assessment is key to success in billing.
- Detailed staff training is important for RCM best practices.
- Real-time claim tracking is also important in the reduction of errors.
- Monitoring key performance indicators (KPIs) also helps in evaluating RCM efficiency.
- Leveraging data analytics also helps identify issues causing delays.
- Enhance communication ways between billing, coding, and clinical staff.
- Regular audits for RCM help adjust data based on performance.
The End Words!
Meet MedsNexus, the top medical billing and coding services provider in the US. They will personalize solutions to address commonly occurring challenges to help practices with the best efficiency. We have a team of billing experts that ensure compliance with HIPAA and ACA. With the crucial assistance of our dedicated partners and effective tech support, we ensure that practices deliver high-quality care and generate more revenue. Connect with us and learn how we can strategize your billing for an error-free process and the best efficiency.
