Decoding the Intricacies of Healthcare Billing

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  • Decoding the Intricacies of Healthcare Billing: Navigating Claims Denials and Revenue Cycle Management

December 8, 2023

Author: Kristy Boldt, Sr. Director of Marketing at The SSI Group, LLC

Healthcare billing is a vital function in the medical administration ecosystem, playing a crucial role in sustaining the financial health of healthcare organizations. This complex process, integrating both institutional and professional billing practices, is foundational to healthcare technology and finance. A precise approach to coding and compliance is necessary to prevent the occurrence of claim denials, which can significantly disrupt the flow of revenue.

Lori Brocato, Senior Vice President of Product Management for The SSI Group, LLC (SSI), states, “Healthcare billing operates quietly behind the scenes, yet it’s essential. Without careful management, the system is prone to errors that can lead to claim denials, affecting both the provider’s financial well-being and the patient’s access to healthcare.”

Professionals in the medical billing sector are tasked with navigating a landscape filled with varied payer policies, continuous coding updates, and ever-changing legislative mandates. Their skill in managing these elements is critical to ensure healthcare providers receive proper compensation for their services. Let’s dive into the complexities of healthcare billing, shed light on the common issues that lead to claims denials, and discuss the importance of adept revenue cycle management.

We will explore the differences in billing approaches between institutions and individual providers, demystify the complexities of Medicare and Medicaid, and uncover expert insights to guide us through this complex field. Additionally, we’ll look at how medical billing codes influence medical services, how compliance shapes billing practices, the impact of technological advances on billing efficiency, and the challenges patients often face due to healthcare billing intricacies.

 

Institutional vs. Professional Billing: A Comparative Analysis

In healthcare billing, understanding the differences between institutional and professional claims is crucial. Institutional billing encompasses the charges for services provided by entities like hospitals and inpatient facilities, and it’s marked by its complexity. This complexity stems from the myriad of services a patient may receive – from diagnostics to treatments, surgeries, and room charges – all of which need to be consolidated into a single institutional claim. This type of billing requires a comprehensive understanding of various billing codes and regulations that apply to facility-based care.

Conversely, professional billing is the domain of individual healthcare providers, including physicians, nurse practitioners, and therapists. These claims pertain to office visits and outpatient services rendered and focus on compensating providers for their clinical expertise and time spent with patients. The accuracy demanded in professional billing is high, as each service must be meticulously documented and coded to ensure proper reimbursement. The nuances of professional billing mean that even minor inaccuracies can lead to rejected, denied, or reduced payment claims, necessitating rigorous attention to detail.

Children’s hospitals, university-based health systems, and other types of institutions, while falling under institutional billing, face additional complexities. For example, the billing for pediatric care often involves services that are unique to the treatment of children and may not have direct equivalents in adult care, leading to a need for specialized knowledge in pediatric medical billing codes and practices.

 

Medicare and Medicaid Billing: Navigating the Maze

The intricacies of billing Medicare and Medicaid add significant complexity to healthcare billing practices. These government programs, integral to the healthcare system, have billing requirements that demand precision and up-to-date knowledge of specific billing procedures. This complexity is often confusing and can lead to a higher rate of claim denials if not navigated correctly.

“Medicare and Medicaid operate under a stringent set of healthcare billing rules that can feel like a minefield to the uninitiated,” explains Brocato. “In particular, the nuances of prior authorization and the substantiation of medical necessity are areas where many claims falter, leading to denials that can be labor-intensive to overturn. At SSI, we’ve heard from clients who are saying even though they have a prior auth code, for example, frequently they are getting denials due to medical necessity. It’s a challenging time even for medical billing experts.”

Adding to this complexity is the array of Medicare Advantage (MA) plans offered by private insurers but governed by Medicare rules. These plans often have their unique billing protocols that can vary significantly, not just from traditional Medicare but also from one another. “With over half of all Medicare beneficiaries enrolled in an MA plan, attention to plan type during scheduling and registration is especially important to reduce potential eligibility-related denials on the back end,” said Brocato. Healthcare providers and revenue cycle management leaders must familiarize themselves with each plan’s intricacies, as an oversight can lead to delayed or denied medical claims, impacting the financial viability of healthcare practices.

Reimbursement challenges continue to plague hospitals and physician practices, where the rising cost of supplies, labor, drug expenses, and insurer policies have had a significant impact. In fact, 84% of hospitals in the US have reported an increase in the cost of complying with insurer rules and regulations, with 70% saying they still have unpaid claims dating back to 2016 or earlier.1

 

Expert Insights on the Complex World of Medical Billing

The nuanced world of medical billing requires an understanding of the coding and submission processes and a strategic approach to managing and mitigating the risks of claims denials. Brocato, a certified coder and billing professional, shares, “The key to proficient medical billing is to stay current with the ever-changing landscape of billing codes and payer policies, which requires continuous education and adaptability. In addition, compliance issues can lead to claims denials, a major hurdle in revenue cycle management,” states Brocato.

Providers must ensure that their medical billing software is up-to-date with the latest regulations to avoid unnecessary denials and interruptions in revenue flow. At SSI, client data shows that providers are still grappling with front-end eligibility denials, and with states continuing to have issues with Medicaid disenrollment procedures, it’s more important than ever for healthcare billing teams to be sure and shore up eligibility processes and procedures. With the deployment of medical billing software, including end-of-cycle pre-billing eligibility checks, RCM leaders will give their teams an advantage in preventing these types of medical billing denials.

“For clients who have implemented SSI’s pre-billing eligibility solution, they’ve seen anywhere from a 40-67% reduction in pre-registration denials alone,” stated Brocato.

“SSI claims data shows that organizations that have purchased PBE have significantly fewer denials than those that do not.”
Lori Brocato
Senior Vice President, Product Management

 

The Impact of Billing Codes and Technological Advancements

The intricate network of billing codes represents the DNA of the healthcare billing process. Each code, a unique identifier that categorizes every diagnosis, procedure, and service provided, is the language of medical billing that bridges healthcare delivery and financial remuneration. Incorrect or outdated coding can lead to claims denials, disrupting the revenue cycle and impacting patient care. Furthermore, persistent inaccuracies in coding may be perceived as fraudulent billing practices, potentially leading to grave consequences.

“Billing codes are more than mere numbers and letters; they are the storytellers of medical practice,” says Brocato. “They capture the nuances of patient care, which is why their accuracy and up-to-date usage are non-negotiable for effective revenue cycle management.”

The dynamic nature of billing codes, with regular updates to the ICD (International Classification of Diseases), CPT (Current Procedural Terminology) and HCPCS (Healthcare Common Procedure Coding System) codes, demands constant vigilance from healthcare providers. For instance, the shift from ICD-9 to ICD-10 expanded the number of codes from around 14,000 to over 70,000, significantly increasing the level of specificity in medical billing.

Parallel to the evolution of billing codes, technological advancements have revolutionized the billing landscape. Modern billing systems, powered by advanced algorithms and machine learning, are transforming how healthcare providers manage healthcare billing operations. These medical billing software solutions, such as those provided by SSI, preemptively identify potential errors in claims before submission, streamlining the entire medical billing process, reducing denials, and improving efficiency.

“Technology in healthcare billing isn’t just about automation; it’s about intelligent intervention,” notes Brocato. “This is where tools such as SSI’s Claims Analytics come into play. Where many believe they already have access to the data this solution offers, upon further investigation, it becomes clear they do not. In some cases, they have to make requests of other teams to get the data they need to drive process improvements. Reducing the days to payment is the name of the medical billing game, and technology has certainly been a game changer.”

 

The Patient Perspective: The Real-World Impact of Billing Complexities

From a patient’s vantage point, the complexities of healthcare billing often translate into a maze of invoices, insurance statements, and perplexing financial obligations. Navigating this maze can be a daunting and sometimes distressing experience, particularly when faced with unexpected charges or the arduous task of claim disputes.

Brocato sheds light on this often-overlooked aspect of healthcare. “Patients find themselves in the crosshairs of a system that can be both bewildering and intimidating. The lack of transparency in billing and the complicated process of insurance claims add layers of stress to what is often already a difficult time in their lives.”

The impact of billing complexities on patients is multifaceted. Issues such as surprise billing, where patients receive unexpectedly high charges from out-of-network providers, and the challenges of navigating insurance pre-authorizations and denials often lead to financial strain and can deter patients from seeking necessary medical care. In fact, the Commonwealth Fund 2023 Health Care Affordability Survey results showcase just how much Americans are struggling with affordable healthcare.2

Moreover, the rise of high-deductible health plans has shifted more healthcare costs to patients, making them more invested in understanding and managing their healthcare expenses. “In today’s healthcare environment, patients are more than just care recipients; they’re active financial participants. They need tools and resources to help demystify healthcare billing,” adds Brocato.

The need for patient-centered billing processes becomes increasingly apparent as the healthcare industry continues to advance in both medical practice and billing technology. This includes more transparent communication about costs, more accessible dispute resolution processes, and enhanced patient education on insurance and billing practices. The ultimate goal is a healthcare system where billing is transparent, navigable, and patient-friendly, aligning the interests of providers, payers, and patients alike.

 

Conclusion: Paving the Way for a Streamlined Medical Billing Future with SSI

The journey through the labyrinth of healthcare billing culminates in a landscape ripe for innovation and improvement. As we’ve explored, the challenges of navigating institutional and professional billing, understanding the nuances of Medicare and Medicaid, and keeping pace with the rapid evolution of medical billing codes and technology are formidable. Yet, they also present opportunities for transformative solutions that can fundamentally improve the efficiency and transparency of the healthcare revenue cycle.

The insights from Lori Brocato and other industry experts underscore the necessity of precision, adaptability, and strategic foresight in healthcare billing practices. SSI stands at the forefront of this evolution, offering cutting-edge solutions that address the core challenges healthcare providers and patients face.

SSI’s 35-year commitment to tackling the complexities of medical billing is unmatched in the industry. SSI’s medical billing software provides a proactive defense against claim denials, streamlining the healthcare billing process and ensuring a higher rate of successful claims that pass to the insurer the first time.

In a world where healthcare billing complexities can seem insurmountable, SSI provides a beacon of stability and expertise in an ever-changing landscape. Their innovative solutions offer a glimpse into a future where healthcare billing is no longer a source of confusion and stress but a streamlined, efficient, and transparent process. A future where healthcare providers’ financial health and patients’ well-being are in harmonious balance.

As we continue to witness the evolution of healthcare technology and RCM billing processes, SSI’s role in shaping a more efficient landscape becomes increasingly clear. For those seeking to dive deeper into the capabilities and solutions offered by SSI, a world of possibilities awaits, promising not just solutions for today’s challenges but a foundation for tomorrow’s advancements in healthcare billing.

 

To learn more about how SSI is leading the charge in transforming healthcare billing, visit our solutions pages, email us at teamssi@ssigroup.com, or call us at 800.881.2739.

 

1 American Hospital Association, April 2023, The Financial Stability of America’s Hospitals and Health Systems Is at Risk as the Costs of Caring Continue to Rise

2 The Commonwealth Fund, October 26, 2023, Paying for It: How Health Care Costs and Medical Debt Are Making Americans Sickers and Poorer

 

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