Value Base Care

Why the “Boring” Back Office Deserves Your Attention

Jul 3, 2024

Accurate coding is critical to understanding practice performance and ensuring your
practice gets paid for services provided.

by Kevin Lewis, Former CFO, Physician Housecalls   The most important thing a medical practice does is care for its patients. But: A VERY close second is generating the codes for reimbursement that reflect the care provided. Since this is a back-office function, why should it be a significant focus area for the practice rather than an afterthought?  Let me offer four reasons. Coding accuracy is critical to:

  • Getting paid for the services you provide
  • Getting paid faster
  • Ensuring regulatory compliance
  • Successfully responding to payor audits

Let’s examine each of these more closely.

Getting paid for the services provided

Physicians provide excellent care. For them to continue treating people and making them feel better, it is critical that the practice gets paid the appropriate amount for the care provided. In simplest terms, medical codes translate patient care into language that payors can understand so they can compensate the practice. If the codes don’t accurately reflect the services provided, the reimbursement for those services will be inaccurate, too. Think of it like an English-speaking person trying to get to the bus in Paris without knowing French. If the translation is off, the person will end up at the train station instead of the bus station. Similarly, if the codes are off, the practice won’t get reimbursed as it should. That reimbursement may be erroneously high, putting the group at risk for payor denials, audits, or even sanctions. Or it may be too low, in which case the group needlessly forfeits essential revenues that providers legitimately earned.

Getting paid faster

Since codes drive reimbursement, accurate coding decreases the likelihood of a payor denial. Nothing positive results from a denial, even if the payor ultimately reverses that decision. If a claim is denied, it takes time for practice personnel to research the issue and respond—and then more time for the payor to review and ultimately pay. That slows the practice’s cash flow. In addition, staff spend hours reviewing denials and resubmitting claims that could otherwise be devoted to other tasks. And because of the investment of time required, many denied claims are never resubmitted, so providers write off revenues they earned. If the claim doesn’t get denied, the payment comes through after the first review, significantly improving practice cash flow. The bottom line for your group’s bottom line: The most effective way to fight denials is to prevent them, and coding accuracy is the key.

Ensuring regulatory compliance

Healthcare is rife with rules and regulations to ensure patient information is protected and payments are supported by evidence to minimize the potential for fraudulent billing.  Unfortunately, it’s difficult for providers to keep track of all the rules and regulations; even the most well-intentioned organization can miss the mark. Accurate coding is critical to making sure you meet all rules and regulations related to clinical documentation and payment.

Successfully respond to payor audits

Payors periodically investigate practices to ensure payments made are supported by clinical documentation. If charts are accurately coded, responding to payor audits will not generate financial or legal concerns because accurate coding ensures that clinical documentation supports the payments. If coding is inaccurate, the practice risks significant financial penalties, recoupments, or even civil or criminal liability. In an upcoming blog post, we’ll look more at the actual costs and burdens of audits—which are increasing in frequency—and how to mitigate your risk. For now, remember that what providers sometimes regard as an imposition or a back-office function is critical to their ongoing ability to fulfill their mission of caring for patients.   Kevin Lewis is Senior Vice President, Finance and Value-Based Care for Calm Waters AI and formerly served as Chief Financial Officer for Physician House Calls, a large specialty provider group headquartered in Oklahoma. Ready to enhance revenue cycle performance and help ensure that providers’ documentation is complete and “bulletproof” before it leaves their desktops? View a demo of Calm Waters AI and learn more about our documentation improvement services with ChartPal.