Pete’s Note: I’m very proud to feature a guest post from friend, advocate for and practitioner of Lean Thinking in Health Care, and an all-around good person, Devin Cabanilla1. Learn more about Devin immediately after his post on 7 Wastes of the Medical Billing Process.
The medical billing process and processing and revenue stream in health care is particularly problematic, complex and expensive. More than a decade ago, a New England Journal of Medicine2 article estimated administrative costs of health care to be as much as $294 billion (Campbell, et al.), and it has only increased since then.
The process begins when a patient makes an appointment and ends when a medical claim is paid by the insurance company. Countless staff and departments contribute to the flow of information and work to achieve payment for patient care provided. Every step in this lengthy process has the potential for administrative waste: excessive paperwork, back-and-forth interactions between provider and payor, nuanced contracts unique to each insurance company, and different forms and ways each payor wants to exchange information. It’s not surprising the hassle has led some doctors to refuse to accept certain forms of insurance payment at all.
Virginia Mason Medical Center’s Patient Financial Services has done extensive work to evaluate the revenue stream and diligently remove waste from the system. Below are some of the common revenue stream wastes in most medical settings today, and many which the Virginia Mason team has helped reduce or eliminate through its continuous improvement work.
Movement of product that does not add value
- Using electronic clearinghouses to transmit medical claims to different insurance groups.
- Faxing and mailing additional medical or insurance documentation between the patient, payor and provider.
- Mailing claims in paper format, using courier services.
More material information than the customer needs
- Claims held in data systems pending queue transmission.
- Mail correspondence from insurance companies notifying or requesting information.
- Specialized staff who only work with specific payors.
Bodily or mental motion that does not add value
- Claims channeled through redundant layers of system edits and checks at the provider source, clearinghouse and payor.
- Emailing questions to multiple people with claim-specific or insurance-specific questions
Idle time when people, material, information, or equipment is not ready
- Waiting for forms, reviews, approvals and signatures.
- Waiting for receipt of funds for claims aging beyond their original service date.
- Waiting for payor review of a medical claim appeal.
- Waiting for system upgrades and changes to be implemented due to new medical procedures.
- Waiting for payors to amend or update payment routines for the patient or provider based on pending contract renewals.
- Waiting on hold for customer services to obtain insurance information
Effort that does not add value from the customer’s perspective
- Checking the claim status for every patient balance outstanding via phone, mail and internet portal.
- Receiving overpayment/underpayment, reprocessing the bill and re-pricing claim information for the payor.
- Sending a claim multiple times when no response is received from the payor.
- New medical procedure codes, retesting software and claim checks.
- Asking the patient for existing information: insurance cards, address, relatives.
Producing more than the customer needs or wants
- Generating multiple invoices/statements for the patient’s health care services.
- Creating duplicate files in multiple folders within workstations and filing cabinets.
- Recoupment efforts on low balance claims (e.g. $2 lab fees, $7 diagnostics).
- Billing complaints for any reason from a patient are indicative of a defect.
- System errors, such as corrupted data, miscoded system logic, data stream interruptions, create claim denials or halt flow.
- Transcription errors where clinical information was not input correctly resulting in denial.
- Registration errors when inaccurate demographic information was not received from the patient resulting in denial.
- Unauthorized procedures, such as surgeries, procedures or inpatient stays requiring authorization with the insurance company prior or during medical services, or denial will occur.
Medical Billing Facts
What is Medical Billing, Medical Coding, and Medical Transcription
Medical Billing, Coding, and Transcription are all inter-related and one can’t talk about one without discussing the other. These three processes and functions are needed in our currently overly-complex healthcare system.
It’s also big business, According to the Occupational Outlook Handbook
medical billers and coders can earn anywhere from $26,210 to $42,760. As of 2008, there were 172,500 medical billing jobs, and the number is expected to grow by 20 percent by the year 2018.
And for an occupation that requires little training, medical billing and coding salary is good. Also, most medical billing can be done from home, also known as medical billing from home.
To become a Medical Billing specialist, one needs the following medical billing training and medical coding certification:
The current standard for medical billers and coders is an associate’s degree in the field. While this is the typical request, if a person already has the necessary job skills and experience, a degree may not be required.
The American Health Information Management Association (AHIMA), the American Academy of Professional Coders (AAPC), the Board of Medical Specialty Coding (BMSC), and the Professional Association of Health care Coding Specialists (PAHCS) all offer credentials. In order to obtain these credentials, candidates must have a 2-year associates degree from a school accredited by the Commission on Accreditation for Health Informatics and Information Management Education (CAHIIM).
- Devin Cabanilla conducts continuous improvement activities in insurance enrollment and billing database areas at Virginia Mason Medical Center in Seattle. He applies the principles of Lean Management (Lean Manufacturing) to his work in healthcare. Outside of work Devin enjoys BBQ, Starcraft, reading, and spending time with his wife and two toddlers. ↩
- content.nejm.org/cgi/content/short/349/8/768 ↩