What Is Clean Claim Submission? 10 Key Reasons It’s Crucial for the Success of Your Practice
In the United States, the process of submitting medical insurance claims is widely recognized for its complexity and susceptibility to errors, leading to billions of dollars in expenses for healthcare providers annually. It is noteworthy that approximately 15% of all claims presented to private payers are initially rejected. In 2022, hospitals faced an estimated financial burden of $19.7 billion due to the costs associated with appealing and rectifying denied claims. Furthermore, industry statistics indicate that up to 60% of claims that are returned are never resubmitted, resulting in lost revenue that practices are unable to recover. By ensuring that claims are submitted cleanly (i.e., free of errors and complete) from the outset, providers can enhance their overall revenue cycle and evade the expensive penalties, denials, and the appeal process for rejections. Submitting clean claims on the first attempt is often recognized as the most effective strategy to boost payment rates and reduce the length of the revenue cycle. What is Clean Claim Submission? A clean claim denotes a health insurance claim that is both complete and accurate at the time of its initial submission. In other words, the claim is devoid of errors, missing information, or any issues that could postpone payment. An official definition indicates that a clean claim is submitted free of any errors or issues (including missing documentation) that could impede prompt payment. This signifies that all required information is both present and accurate. For example, a well-organized claim precisely includes the patient’s information, the provider’s details, the service dates, the procedure codes, the diagnosis codes, and any necessary documentation. The insurance company can process it without needing to return to the provider for corrections. If a claim contains an error (such as an incorrect code or a missing patient birthdate), it is not considered clean; it may be rejected or denied until rectified. It is akin to submitting a flawless homework assignment that the teacher (insurer) accepts immediately. To elucidate the notion of clean claim submission, it is essential to ensure that all the following criteria are met. Accurate Provider and Facility Information: This specifies the provider (and facility, if applicable) along with all essential identifiers (e.g., NPI). Complete Patient and Insurance Information: Patient demographics and insurance policy details must be thorough and validated (confirming coverage eligibility). Correct Dates and Service Codes: This encompasses the accurate date and location of service, in addition to properly coded procedures (CPT, HCPCS, ICD-10), all of which must be included under the patient’s plan. Medical Necessity and Documentation: Services must be deemed medically necessary and substantiated by suitable documentation (attach notes, test results, prior authorization references as necessary). Compliance with Payer Regulations: Compliance with any payer-specific guidelines (correct modifiers, forms, etc.) is mandatory, and submissions must be made within the designated filing period (e.g., within 90 days to 6 months of service, depending on the insurer). Absence of Technical Errors: All mandatory fields must be filled out with the correct formatting, accurate IDs/codes, and no duplicate claims for the same service. The objective of submitting a claim that fulfills all these criteria is fundamentally aligned with the best practices of clean claims medical billing; in other words, it is about “getting it right the first time.” This approach to clean claim submission enhances the process by averting unnecessary complications such as rejections or requests for additional information, extra documentation, or any other paperwork. By concentrating on every phase of the claim processing within an efficient medical billing system, ranging from patient intake and insurance verification to coding and final review, a healthcare practice can achieve a significant rate of clean claims submissions. Now that we comprehend the significance of submitting clean claims, let us delve into ten essential reasons why clean claim submission in medical billing is crucial for the financial and operational well-being of your medical practice. 10 Reasons Why Submitting Clean Claims Is Essential for Your Practice Faster Reimbursements and Improved Cash Flow Utilizing clean claims in medical billing facilitates quicker payments from insurers, thereby enhancing your practice’s cash flow. Their auto-adjudication process can approve it without unnecessary back-and-forth or 277 correction messages. Numerous states have prompt-pay regulations that require insurers to issue an ERA and EFT within 30–45 days once a claim is clean, so ensuring accuracy from the outset guarantees timely cash flow. This consistent revenue covers daily expenses and allows for the purchase of new laboratory equipment. Swift and precise claims maintain your practice’s stability and readiness for growth. Comparative Impact of Claim Quality on Revenue Velocity Revenue-Cycle Scenario Average Days-to-Payment Denial / Rework Rate Net Collection Rate Month-End Cash Position Streamlined Express Lane (Clean Claim Submission) 14 days 2% 98 % of total charges USD 200,000 Delayed Congested Lane (Error-Prone Submissions) 45 days 12% 85 % of total charges USD 140,000 The comparison illustrates that submitting clean claims is similar to maintaining revenue in an express lane, which guarantees predictable, swift, and maximized cash flow for the practice. Higher First-Pass Approval Rates (Fewer Denials) A significant reason for utilizing clean claims medical billing is its ability to significantly reduce claim denials. Experts indicate that 85–90% of denials could be prevented if the initial processes, such as verifying codes and patient information, are executed correctly. Submitting clean claims is the most effective strategy to circumvent these denials. By rectifying simple mistakes, such as missing ICD-10 codes or incorrect modifiers, the majority of claims achieve a high first-pass approval rate, resulting in payment on the first submission without the need for corrections. This directly enhances your financial outcome, as a claim that is paid on the first attempt never faces the risk of going unpaid. (It is important to note that approximately 65% of denied claims are never resubmitted, leading to a permanent loss of that revenue.) Case Study The Spine & Wellness Center of America, a pain-management group with nine physicians located in South Florida, managing over 140,000 encounters each year, had reached a plateau of USD 1.3 million in monthly collections,
12 KPIs for RCM: How to Monitor and Improve Performance
How well is your medical practice’s revenue cycle going? No matter where you are currently, there’s always room for improvement and eliminating inefficiencies. But which KPIs should you pay attention to? In this article, we’ll look at 12 key metrics that can help you achieve a strong financial position. Why are revenue cycle KPIs important? Running a successful medical practice or healthcare business requires tracking a variety of metrics. Revenue cycle KPIs are especially important because they help you track essential financial indicators and assess the overall health of your operations. They also reveal areas where you can improve your processes. A strong revenue cycle keeps your business stable and maintains a steady cash flow. This stability allows you to allocate resources more effectively and strategically scale your team, so you can care for more patients or expand your scope of practice. Revenue Cycle Management Challenges and Pain Points Inefficient patient access for appointments and registrations The revenue cycle starts with patient access, and this is where many problems begin.Inefficient or confusing scheduling systems can lead to missed appointments and low utilization of services, and often fail to meet today’s expectations for easy online booking. Implementing online self-scheduling empowers patients to book their appointments, reducing no-shows and making better use of physician time.Key metrics to look at include missed appointment rate, which indicates ease of appointment availability and better use of physician time; and tracking online registration usage, registration errors, and patient satisfaction. Manual management of claims and denials Processing claims often requires a lot of manual work, from checking payer updates to classifying billing codes. Not only is this stressful for staff, but it also increases the chance of errors and denials, which can slow down cash flow. To improve this, focus on good claim rates and frequency of denials. Automating the claims process with a cloud-based EHR can help reduce denials by predicting and preventing issues, making your team’s work easier. Inconsistent Patient Intake As patients are expected to pay more of their medical costs, a clear and effective billing approach is important. Simplifying billing and offering convenient payment options is key to improving collection rates. Here’s what you can do: Use data analytics to identify trends and patterns in billing and collections to better understand and solve problems. Provide patients with out-of-pocket estimates before their visit. This helps set expectations and avoid surprises. Accept a variety of payment methods, including credit/debit cards, online payments, and mobile wallets. Send reminders about upcoming payments and past due amounts via multiple channels (email, SMS, phone). Get actionable insights This complexity makes it difficult to understand the connections between different areas like patient access, collections, claims management, and payer contracts.To make sense of the data, use revenue cycle analytics tools that consolidate information and provide real-time insights.A well-designed dashboard can help you track important KPIs and identify trends over time, turning complex data into actionable information. What is a KPI Dashboard? Revenue cycle KPI dashboards are valuable tools for healthcare organizations that provide real-time insight into billing and revenue metrics.Because it is integrated into your Revenue Cycle Management (RCM) platform, it can be customized to highlight the key performance indicators that matter most to your business.This dashboard allows practice managers to closely monitor important financial transactions, which in turn allows for more informed decisions and improved overall performance. Revenue Cycle KPI Dashboard helps to: Improve cash flow Reduce bad debt ⢠Improve overall financial performance Identify operational inefficiencies Predict the future Improve patient satisfaction Days Receivable Ideally, this number should be low, as it means your cash flow is in good shape.If you wait more than 50 days, it could be an indication that you have issues with cash flow and covering expenses.To reduce this time, consider tightening your payment policies or offering early payment incentives. To determine your days receivable, use this formula: Days receivable = (Total accounts receivable / Average daily sales) Accounts receivable past due rate This metric helps you understand how long your unpaid invoices have been past due.Split your accounts receivable into time categories such as 0-30 days, 31-60 days, 61-90 days, and over 90 days.If many of your accounts receivable are over 90 days past due, it’s time to rethink your collection strategy to get paid in the first category (0-30 days). This can be calculated using the following formula: Receivables by Due Date Ratio = (Number of Open Receivables in Time / Total Number of Open Receivables) * 100% Perfect Claims Allocation This tracks the percentage of claims that were processed without issues, such as rejections, missing information, and errors.A higher ratio means that your billing and management processes are up to date.A lower rate can mean you have to work harder to avoid payment issues. To improve your clean claims set, try these tips: Train your team thoroughly in medical billing practices Establish and follow clear procedures to ensure consistency Use the following formula to calculate your clean claims rate: Unconfirmed claims rate = (Unconfirmed claims / Total claims) * 100% Claim denial rate This metric indicates the percentage of claims that are denied by the insurance company or the patient.A high denial rate can wreak havoc on your revenue cycle and overall operations.Common reasons for denials include coding errors and incomplete information.Keeping an eye on this rate can help you address issues before they escalate. Denial rate = (number of claims denied / total number of claims) * 100% Appeal rate Your appeal rate indicates the percentage of denied claims that you appeal.The decision to appeal all claims or only high-value claims depends on your practice’s approach. To calculate your appeal rate, use: Appeal rate = (number of claims disputed / total number of claims denied) * 100% Bad Debt Ratio This key figure tells you the percentage of accounts receivable that are uncollectible and need to be written off.A high bad debt ratio indicates that you need to improve your debt collection process.Some bad debts are inevitable, but you can
Physician Billing vs. Hospital Billing: What’s the Real Difference?
Physician billing and hospital billing are often confused, but there are some key differences. Both present their challenges and necessitate expertise to navigate their complexities. A clear understanding of these billing processes is critical for financial management, improving patient care, and streamlining revenue cycle operations. Physician Billing Requirements: Physician billing necessitates meticulous attention during the treatment process. This includes: Carefully recording patient visits classifying services provided It is important to take note of any necessary subcodes/modifiers to ensure complete reimbursement. Healthcare providers maintain comprehensive documentation for each patient visit, which includes demographic information, medical history, symptoms, diagnosis, treatment plans, and other pertinent data. The utilization of alphanumeric medical codes alongside any required supplementary information facilitates the accurate assessment of physician reimbursement. Hospital Billing Requirements: Hospital billing employs a standardized set of codes; however, it is more intricate due to the diverse array of services offered within hospitals.Hospital billing begins when a patient is admitted to a facility and continues until they are finally discharged. Hospital billing necessitates the use of a chargemaster, a comprehensive database that catalogs all the services for which a facility can issue charges. Healthcare professionals thoroughly document every aspect of the patient’s care during the stay, including diagnosis, treatment, procedures, medications, and any additional services provided. Key differences between medical billing and hospital billing Scope and extent of services Physician billing focuses primarily on individual patient visits in clinics and private practices, and billing staff must use only a small portion of the codes. However, hospital billing employs nearly all sections except for the most specialized ones, and larger hospitals might utilize the complete code set, necessitating more skilled coders and billing staff. Documentation and coding practices Effective hospital billing depends on a collaborative effort in documentation and coding. Many health care professionals work together to fully and accurately document patient interactions and services provided. Physicians and staff can do this at the point of care, making it more targeted. Revenue Streams and Reimbursement Models In this system, healthcare providers are compensated for each service provided based on a pre-determined fee structure. This structure incentivizes healthcare providers to deliver a broader range of services, as their compensation is linked to the volume and complexity of patient visits. Hospital billing, on the other hand, employs various reimbursement methods, including prospective payment systems (PPS), diagnosis-related groups (DRGs), and value-based reimbursement contracts. These systems determine payment based on the patient’s diagnosis, length of stay, and case complexity. Administrative Workflow and Responsibilities The administrative workflow associated with physician and hospital billing varies greatly depending on the scope of each.Medical billing may occur within an individual practice or a medical group. Hospital revenue cycle management and billing operations require a dedicated billing department or an experienced medical billing expert service. Optimize Hospital and Physician Billing If you are dealing with medical or hospital billing, it is essential to have an effective process in place along with a skilled billing team.With the right support, providers can receive maximum reimbursement and minimize the burden of revenue management. Medical groups looking to improve their revenue cycle management and billing can benefit from partnering with a MedEx MBS. MedEx MBS has a proven track record in revenue cycle management, giving our clients the confidence to outsource their administrative billing processes to us so they can focus on providing excellent patient care. Our RCM solutions increase efficiency and revenue potential, enabling our clients to succeed in today’s challenging healthcare environment.
Challenges in Dermatology Medical Billing and Coding
Coders play a key role in setting these codes, and billers prepare claims based on these codes. These claims are submitted to government agencies and commercial payers to pay for services provided by a dermatologist. This includes government payments such as Medicare and Medicaid, as well as private insurance providers. Given the diversity of medical practices, including cosmetic, medical, and surgical procedures, billing can be difficult. In this process, accurate diagnosis of skin and wound types is essential, including details of procedures such as excision, scar removal, and biopsy. The world of dermatology billing and coding is fraught with challenges due to constantly changing insurance reimbursement policies. Addressing these complex issues requires a thorough understanding of healthcare regulations, proficiency in implementing changes, and ongoing compliance with ever-changing billing guidelines. The Role of Dermatology Billing and Coders The role of medical billers and coders is essential. They manage patient data, including treatment and insurance information. The financial health of a medical practice or facility depends on the strength of its billing team. However, the complexity of dermatology billing stems from the combination of medical and surgical specialties. This requires a thorough understanding of the various uses of the current and revised Comprehensive Terminology Codes (CPT). Dermatology Medical Billing Process In the initial stage of dermatology medical billing, bills are sent to patients “just in time” to avoid confusion and ensure transparency of financial transactions. This initial communication is not only clear but also effective to follow. However, denials can occur for a variety of reasons, including incorrect medical codes or information about missing patients. Therefore, maintaining the accuracy and traceability of patient records is essential to effective prevention management. The final stage of dermatology medical billing is billing, which has two functions: pre-billing and payment processing. Pre-payments are intended to provide patients with information about outstanding balances as a means of managing costs. Dermatology Medical Coding System Dermatology medical coding relies on two main systems: the International Classification of Diseases (ICD) and the Current Procedural Terminology (CPT). CPT, on the other hand, includes a comprehensive set of codes for inpatient and outpatient procedures and services. Medical coding systems use CPT codes to accurately bill a variety of treatments, including extractions, scrapings, surgeries, and skin biopsies. They must include a detailed patient history, laboratory findings, and management decisions. General Medical Billing Codes Related to Dermatology Dermatology procedures and treatments are often assigned specific medical billing codes to facilitate accurate billing and recordkeeping. Below are the CPT codes found on medical billing statements for a variety of skin-related problems. CPT Codes Lesion Removal The different types of lesions include: precancerous lesions, malignant lesions, and malignant lesions, which can be removed using a variety of methods including cryotherapy, chemotherapy, laser therapy, and electrosurgery. When multiple lesions are removed in a single surgical procedure, multiple CPT codes are used to describe each lesion. Some of these codes include: 17000: This code is used for the removal of cancerous lesions; primary lesion (such as actinic keratosis) 17003: This code is used for the removal of cancerous lesions; 2-14 lesions (e.g., actinic keratosis) 17110: This code is used for the removal of malignant lesions other than hemorrhagic lesions up to 14 lesions. 11403: This code is used for the removal of malignant tumors, including the extremities, legs, arms, or trunk 11603: This code is used for the removal of malignant tumors, including the extremities, legs, arms, or trunk CPT Codes for Mohs Micrographic Surgery Mohs micrographic surgery is used to remove skin cancer. It usually occurs in multiple stages. The procedure involves removing tissue in stages and examining it under a microscope to ensure complete removal. The appropriate CPT codes are: 17311: This code is used for Mohs microsurgery with the cranial technique 1; 17312: This code is used for each additional section after the first section of Mohs microsurgery: hand, neck, foot 17313: This code is used for Mohs microsurgery of the hand, neck, and trunk using the cranial technique. 17314: This code is used for each additional section after the first section of Mohs microsurgery: hand, neck, and foot Pathology CPT Codes Pathology procedures are the examination of tissue and skin samples at the cellular level. Common pathology CPT codes are: 88304: Level III – This code is used for invasive disease, gross and microscopic examination. 88305: Level IV – This code is used for invasive diseases, microscopic and microscopic examination. 88312: This code is used for special annihilation procedures, including interpretation and reporting 88341: This code is used for immunohistochemistry or immunocytochemistry diagnostic procedures Phototherapy and Laser Therapy CPT Codes Phototherapy and laser therapy are used to treat a variety of skin conditions. The relevant CPT codes are: 96920 and 96921: These codes are used for laser treatment of inflammatory skin conditions. 96900: This code is used for radiation therapy (ultraviolet radiation) 96910: This code is used for photochemotherapy; tar and UVB, or petroleum jelly and UVB 96567: This statement focuses on phototherapy using external light to destroy cancerous or malignant lesions. J7308: This code is used to administer aminoacetyl propionate hydrochloride in phototherapy. What Modifier 25 Means Modifier 25 is a very popular term in the dermatology billing field. It is widely used, but it is often misused. This modifier represents evaluation and management (E/M) services provided by a single physician on the same day of surgery. Failure to do so can result in audit risk. The E/M designation is a significant component of medical billing, allowing healthcare providers, including dermatologists, to receive reimbursement from government payers (Medicare and Medicaid) and insurance providers. It is important to note that the (25) change should only be associated with E/M codes, not procedural codes. Key Challenges in Dermatology Medical Billing and Coding Dermatology medical billing and coding is challenging due to the complexity and ever-changing procedures, policies, and regulations. It is very difficult to document and understand the accuracy of changes. It takes a long time to obtain insurance