Automation: The cure for bad billing habits

In an era where HME providers are regularly submitting to RAC audits, they may find a saving grace in the type of automated billing system they use, vendors say. Through advanced functionality, verification capabilities and relevant analytics, today's billing systems have become a necessary tool to protect revenues against auditors' intensive scrutinizing.

Wayne Bailey, director of marketing and sales at Thousand Oaks, Calif.-based Bonafide Management Systems lists three reasons why automation is necessary: “Audits, audits, audits.”

Over time, the HME industry “created some really bad habits,” Bailey said. “Because they were hardly ever audited, they developed the habit of filing a claim without proper physician written orders in place, they calculated that should they be 'caught' on some remote occasions, they would just pay the penalty.”

Consequently, Bailey marks checklists as his first recommendation—so that the software forces billers to verify to the system that all documentation is “on hand and correct” before the claim is filed. Next are eligibility verification, remaining deductibles and co-pays, he said.

“There are two major areas where software protects payments—every single order is validated on intake and eligibility verification for recurring rentals,” he said.

To be sure, the days of manually reviewing every detail of every order for billing purposes “are behind us,” said Steve Rogers, vice president of product management at Lawrenceville, Ga.-based Brightree.

“Now available are billing systems that can automate the previously repetitive reviews and offer manual review only for those orders with exceptions,” he said. “Add that to automated billing engines that create and file claims and manage the receipt of remittance advice without human intervention and HME providers now have a billing operation that can grow and manage a greater volume with the same staff.”

The efficiencies gained with automation also allow the billing department time to focus on accounts receivables concerns and bring down days sales outstanding, which strengthens the overall health of the company, Rogers said.

The 'ideal' system

In devising the ideal HME billing system, Jimmy Miner, director of sales operations for Atlanta-based Patientco, says it should provide a level of automation related to payment handling and processing, accurate closed-loop reconciliation capabilities, full-time equivalent time savings and overall cost savings.

“Providers should assess their current state thoroughly before making decisions,” Miner said. “It is challenging to truly understand current performance and identify weak spots in their revenue cycle.”

Among the weak spots that typically exist, he said, are inconsistent communications, irregular payment support and confusion over hard and soft costs.

Additionally, billing systems should have the flexibility to allow providers to meet the myriad payer requirements in regard to claims formatting, pricing and submissions, said Keith Lilek, CEO of Leawood, Kan.-based A/R Allegiance Group.

“The systems should allow changes and updates to payer pricing in an efficient manner, and not require hours to manage the price files,” he said. “They should also capture denial and adjustment data in a manner that facilitates the causes of revenue adjustments and delays in payments. A billing system that calculates the co-pay amount ahead of time and sends the bill out immediately, not waiting for insurance, can be ideal.”

Cloud Connection

As cloud capabilities have become more advanced in recent years, vendors are increasingly advocating these types of hosted systems as more affordable and manageable.

“Hosted systems are a good thing for the industry because it helps lower barriers to purchase or change of billing systems,” Lilek said. “HME companies do not have to invest in servers and then manage disaster recovery plans or efforts. The potential tradeoff is there may be an increased cost for the added convenience of the cloud.”

Indeed, cloud-based systems have gained “great traction” in the HME industry, Miner agreed.

“The impact on the market is incredible because anyone with an Internet connection has access to the best cloud-based technology in the business,” he said. “The cloud also allows for the efficient and swift release of product updates to create a very stable and secure environment that can be deployed at a moment's notice.”

Consolidation wave

The automated billing system sector is undergoing an equilibrium shift caused by a wave of mergers and acquisitions among some of the major vendors. Moreover, it is a phase that is likely to continue for the near term at least, says Tricia Fringer, CEO of Dallas-based OmniSys, so providers need to be cognizant of how they might be impacted.

“Mergers and acquisitions cause suppliers headaches on many levels, especially from a system consolidation and integration perspective,” she said. “HME providers have to be thoughtful about choosing their partner for outsourced services, as customization and flexibility are extremely important to minimize the workflow interruption associated with M&A.”

Michael Sanderson, president of Memphis, Tenn.-based RemitData, also cautions that more fallout from the consolidation will likely come in the future.

“Providers should be very careful when one party has what appears to be a dominant position,” he said. “Often there are companies that become the 800-pound gorilla and before you know it they are long gone,leaving clients who made big investments with some very challenging choices to consider.”