Example White Paper:

Treating Financial Ailments in Today’s Medical Practices

A common sense approach that includes a complete financial physical exam.


“Physician heal thyself,” an old proverb found in the Book of Luke, who was himself a practicing physician, is still excellent advice for today’s medical practices. As health care professionals, physicians are continually urging their patients to have regular physical examinations to assess their state of wellness.

When was the last time your medical practice had a financial check-up?

The symptoms of an ailing practice are slow collections, a high proportion of aged receivables, excessive amounts of denied claims, too many uncollectables, high expense ratios and dissatisfied patients.  If these symptoms go untreated, the health of your practice will be adversely affected in the form of lost profitability and decreased efficiency.

A Personal Note

I’m not a physician, but I have spent 20 plus years as a medical billing director, manager and supervisor, as well as holding various management positions in Information Technology. This experience has helped me understand the tools that are available to medical practices to help them improve their financial well- being. I started my own consulting business in 2000 and have been able to apply my knowledge to helping medical practices improve their financial health.  I find that many medical organizations continue to struggle with much of what I have dealt with throughout my career.  I have been able to help them, and I believe this white paper will help you.

The Treatment Regimen

We begin our prescribed treatment regimen with a “Cycle of Service” review which provides your practice with a complete financial, physical examination of your entire operation from booking of appointments to final payments for services rendered.

Typically, there is a cycle to all processes.  In the reimbursement world, we commonly refer to the billing process as the reimbursement cycle or billing cycle.  As I mentioned, we refer to these cyclical processes as the Cycle of Service, and you will see why.

The cycle starts when patients first make contact with a physician and continues until their bills are paid in full.  If all goes according to plan, this can be a fairly uneventful process.  However, if certain fundamentals are not followed, we then move into another cycle, the re-billing cycle, which adds cost to everyone, including your medical practice and the insurance industry.

The reimbursement cycle typically follows this process:

  • Pre-Visit – for Pre-registration, Registration or Re-registration and Scheduling
  • Patient Reminders – between Scheduling and Arrival
  • Patient Check-in – for Registration and Eligibility Verification
  • Care Provided
  • Patient Check-out – for Co-Payment collection and Scheduling
  • Claims Submission – Electronic
  • Payment Receipts and Denial Posting – Electronic
  • Patient Statement

If denials are involved, we must add more steps to the re-billing cycle which prolongs the process even more and increases your cost.  These include:

  • Denial Management – for appeals, re-billings and/or write-offs
  • Follow Up

Seems pretty simple; right?  Let’s take a look.


One of the most important contacts you have with your patient is the initial one.  In many ways, it will set the tone for your patient’s overall impression of your practice.  My experience, as well as the data we have reviewed, indicate that the leading reason for claim denial in most practices is incorrect billing information.  To prevent this, it is important to collect all necessary demographic information prior to a patient’s first visit. By taking complete information via the phone you can actually speed up the check-in process for your patients.  More importantly, you will have complete insurance information so you can check eligibility prior to the patient arriving at your practice.

In many practices, the role of the medical secretary has evolved into a “dumping ground” for these types of task.  I encourage you not to assign eligibility verification to these staff members.  It is my recommendation that this type of eligibility checking should be moved to a back office function.  My strategy is to move from a central billing office mentality to one that works more proactively to ensure payment on the first submittal of insurance claims. Many organizations I have worked with have found ways to send batch eligibility files to their insurance carriers.  There are tools available to help you with eligibility checking without requiring significant employee effort. Familiarize yourself with these options or seek help to find them.

Are you considering outsourcing your billing?  Many practices I work with are overly concerned with how many staff members are assigned to follow-up on claims.  By adopting a strong pre-visit strategy, you can ensure your claims are submitted cleanly, the first time and therefore keep your billing in-house. Finally, check eligibility, check eligibility and check eligibility.  Did I mention you should check eligibility in advance?  Why have someone show up for a visit if it’s not going to be paid?  These are issues that can and should be dealt with in advance of any services rendered.

Patient Reminders 

In between the time a patient makes first contact and their actual visit, a practice can take a proactive approach to ensuring the patient has an overall positive experience.  What can you do to ensure this experience is positive?  I find it is very helpful to make a reminder call.  Reminder calls can be automated, utilizing a number of software programs or services available today.  These systems are typically easy to set-up, maintain, and provide great return on investment (ROI).  I encourage this automation so your “human staff” can deal with patient care issues.  When setting up an automated system, you should consider reminders about insurance updates, balances, etc.  In addition, the ability to complete forms in advance, either on paper or via the practice’s web site, helps expedite the patient’s experience.

Patient Check-In

This is a time of opportunity — a time to confirm the information you have on file.  If your computer system has the capacity to print out a fact sheet containing all of a patient’s critical demographic information, you should do so and have the patient review and sign it at every visit.  I would also encourage your staff to review the patient’s insurance card and validate the policy number with your records. It’s very easy for a number to be transposed during the initial registration process. It’s always a debate whether to collect co-payments at check-in or check-out.  Most contracts are very clear about what you can collect a co-payment for.

I suggest you collect at check-out, as you will have a better understanding of the services performed and what your organization is entitled to receive.  Co-payments have always been a very frustrating part of doing business for practices. Collecting the wrong amount or collecting inappropriately can lead to credit balances that require more work and add to your cost of doing business.  Manage patient behavior by informing them when they check in there is going to be a reconciliation upon completion of their visit.

Patient Receives Care

This is an area in which I don’t pretend to be an expert.  So, I’ll leave this to the consultants who specialize in patient care.  At minimum, make sure the provider who is treating the patient is enrolled in the insurance plan that the patient presents.  This should be done between scheduling and check-in and then verified upon check-in.  Millions of dollars are lost annually due to providers not being credentialed.  When working with practices I always ask if they are being denied for this reason and I always get a little chuckle from the staff.

Patient Check-Out

This can be another point of contact where you can ensure that all data has been collected correctly.  I have implemented programs with primary care practices, as well as OB/GYN practices, where at patient check-out: the billing is entered, co-payments are collected and posted and a receipt is generated from the practice’s computer system which contains the primary billing information and the services that will be billed to the appropriate insurance company.  The net result of such a program is that the patient understands what they are responsible for and the practice ensures no charges are missed.  This type of program, if implemented appropriately, has great benefits.

Patient retention is an important part of the check-out process. Ensure you have a fail-safe program in place to manage this process.  Each patient leaving should be booked for a follow-up or at minimum placed in a reminder system for future visits.  It takes a lot of work to attract new patients; it’s much easier to retain the one’s you have.

Claims Submission

Claims submission is the next step.  Is it obvious that, if you executed on everything in the patient cycle up to this point, you have a much better chance of being paid on first submission?    However, managing the claims submission process is important to the ongoing success of your practice. There are many ways to submit claims.  All practices should be striving for 100 percent electronic claims submission.  It’s a proven fact that electronic submissions speed up the billing process.  There are many practice management systems, claims clearing houses, and billing services that are available to help practices with claims submission.

You should look for services that include “claims scrubbing,” claims denial reports, claims receipts reports, etc.  Your practice should keep logs of claim runs, including the date submitted, date confirmed received by clearinghouse, date confirmed received by carrier, if available.  It is just as important to submit the claims properly, as it is to have a tight control on whether or not the carriers have received your claims.  Denials for claims filing limits are certainly denials that can be prevented.

Payments and Denials

When looking to improve practice performance one needs to look no further than your remittance information.  Posting payments and denials is where a practice can learn more about their opportunities for improvement than with any other function in the Cycle of Service.   For example, when working for a large MSO in Cambridge MA, I was challenged by the Chief of Medicine (COM) to provide her with copies of all Explanation of Benefits.  We had approximately 125 FTE physicians for which we billed.  I knew that the copying and extra labor time would have been enormous.  What the COM really wanted to understand was where there were opportunities for the organization to improve.  We both wanted to achieve the same goal, but we differed on how to get there.

The challenge was to provide meaningful denial data without my staff expending an enormous effort.  I’m actually glad I was pushed to provide this information because it forced me to figure out how to manipulate our practice management system and pull denial data in summary and detailed reports.  This information was very powerful.  The organization was considering spending money on a claims scrubbing system for coding issues. However, our denial data pointed out that our practices were not doing a very good job in data collection. These reports saved significant dollars for the practices.

Of course, processing payment data is important.  However many practices are neglecting to post denials into their practice management system in a timely fashion, and in some cases not at all.  Many practices we have worked with have been so focused on posting all the cash receipts for month-end close that they lose sight of the opportunities in denial management.  My recommendation is to give denials the same priority as payments; denials can provide as much opportunity for additional revenues as claims that have been paid.

Electronic Remittance

With the advent of HIPAA, automating the remittance process has become a major cost saving opportunity for both small and large practices.  But, posting payments and denials electronically is not as straightforward as you might think. Many practice management systems offer some type of electronic remittance posting process.  There are also independent solutions that integrate with the top practice management systems in the marketplace.  When evaluating these software solutions, ask:

  • Does the remittance solution have the ability to post the 835 4010A electronic payment file to your practice management system?
  • Does the solution include EOB storage of the information contained within the file?
  • Is it easy for the staff to look up patient data?
  • Does the solution easily integrate with your practice management system and your insurance carriers?
  • Does the solution compare fee schedule information?
  • Does the solution provide tools that help you understand your areas of opportunity?
  • What is the vendor’s industry experience and service reputation?

An automated remittance solution is a major cost savings opportunity that you may want to consider today.

Patient Statements

I have seen some good statements that have been clearly formatted, and I have also seen many that were very poorly constructed. Our consulting engagements always include a review of the statement and revisions where necessary. The net results of these revisions are more payments and less inquiries about the bills.

You might want to consider outsourcing your statements to a company that specializes in statement processing. They will most likely be able to accomplish this task more efficiently and less expensively than you can do it in-house.

Denial Management

Many claims are unnecessarily written-off due to a lack of structure in the handling of denials.  Make sure your organization has a process in place to deal with denials and the correction of denied claims.  Your process should entail more than just re-billing the claims. This only increases your denials for duplicate claims.  If you are experiencing a high rate of duplicate claim rejection, it could point to a lack of an appropriate denial tracking and follow-up process.  A good electronic remittance posting solution can be a big help in effectively addressing this problem.


Submitted claims that receive no response should also be addressed.  I recommend a second billing, but only if a denial tracking process is in place. I’m very adamant about not creating unnecessary work.  In order to create an effective follow-up process, you should post all your payments and denials in a timely manner.  I recommend that this be done within 24 hours of receipt.  Several practices with whom I have worked devote multiple staff members to this follow-up.  However, when asked the most common response to claim inquiries, they all stated: duplicate claims.  One organization had a pile four feet high of denials that had not been posted.  The answers the follow-up staff were seeking were right at their fingertips.  Make sure that your follow-up staff is not spending time on phone calls when the answers are right within your own walls.


The reimbursement cycle can provide a smooth ride if you implement the proper fundamentals.  However, an effective reimbursement cycle is not just a back office function.  It is a Cycle of Service that involves your entire staff in one way or another. This paper has attempted to show the Cycle of Service has many components and they must all work in synchronization to effectively maintain your practice’s financial well-being.

The value derived from a Cycle of Service analysis can be best appreciated in a comment offered by one of our clients who stated: “In thirty days, our investment in MD Solutions has already paid for itself ten times over.”  And, from the director of another group practice who has already asked us to come back and perform a six month check-up, commented: “It’s rare to find a service organization that not only understands business tools, but also knows the business of healthcare.”

After our Cycle of Service evaluation, we provide the medical practice with a detailed and comprehensive report that includes their strengths, weaknesses and a working list of recommendations to implement for workflow changes and procedural improvements.


I hope this paper has convinced you to conduct a regular, financial health examination – either on your own or using professional assistance — of your medical practice. If you decide to do it on your own, prioritize your work. Don’t try to do it all at once; save some work for the next quarter.

If you would like professional assistance, please contact me at the information below.