Home Coding Are your hospitalist billing services underperforming? How to check

Are your hospitalist billing services underperforming? How to check

Six insider tips to improve your revenue cycle bottom line

September 2021



A new 2021 quantitative study was just concluded by AR, the Research Intelligence branch of Avira Insights.

The conclusions are a must read.

The medical billing and coding data points and revenue cycle trends revealed that hospitalist billing services fall into one of four tiers – and 95.2% are misrepresenting performance.

Perception vs. reality
The stakes are very real and very high.

Even a 2-3% process performance efficiency improvement can have a 5-10% impact on revenue.

When this scales to 15-30%, practices and providers face a major issue. Yet nine out of 10 hospitalists fall in this range and don’t even realize it.

The problem
The medical revenue cycle is designed to pay providers for services that meet specific criteria.

But the design is crippled by a lack of transparency.

The layers of complexity make it difficult for physicians and practice managers to fully track their AR let alone properly evaluate the quality of the services provided.

Most doctors feel they have a good general understanding of their performance, but this study shows just how far these perceptions are from reality.


  • Tier 1: The bottom: 35.7% of billing teams have a 30-40% relative opportunity for maximized improvement. The flip side is a 60-70% performance and efficiency rating.

This means 3.5 out of every 10 billing teams get 60-70% right.

  • Tier 2: Average: 39.1% have a 20-29.9% opportunity, correlating to a 70-80% performance and efficiency range.

Simply put, four out of every 10 billing teams get 70-80% right.

  • Tier 3: Above average: 20.4% of services move up by up to 5%, taking them into the 80-85% range.

To summarize, two out of every 10 billing teams get 80-85% right.

  • Tier 4: The top 15%

This is where the data gets very interesting.

Only 4.8% of the services studied achieve results within the top 15% range, correlating with revenue cycle maximization.

Note: None of the teams studied achieved a consistent 100% mark, which reflects an inherent bias toward the insurance companies.

To conclude, only one in every 20 billing teams get 85-99% right.

What do these tiers matter in practical terms?
The lack of AR, claims processing, and RCM transparency is not a secret.

But some of the perpetrators are.

The common assumption is that poor data visibility is the fault of the insurance companies.

After all, they have a vested financial interest in lower RCM service performance levels.

They get to keep any difference between the total owed for services provided and the total paid out to approved claims.

Any increases in denials, errors, and/or inefficiencies result in these companies getting to keep more of what should have gone to the physicians and practices.

It’s part of the reason modern physicians face the constant financial pressure to increase their patient workload to the point where it puts pressure on the quality of care and amount of time available per encounter.

None of this is new information.

But it turns out this is only half the story.

man-worried-culpritThere is a second culprit in the industry-wide lack of transparency that is costing providers billions annually.

According to the data, 95.2% of billing teams and companies providing RCM services to hospitalists are only achieving between 70-85% performance efficiency levels.

And very few people realize it.

Let me say that another way; 19 out of every 20 billing teams have a 15-30% margin for improvement that they keep hidden.

It makes sense.

Like the insurance companies, they have a financial interest in the lack of transparency. It allows them to secretly underperform.

For example, compare two billing services in a transparent industry. One has a 75% performance rating. The other has a 78%.

The decision is easy.

It’s even easier when the gap is 75% vs 95%.

Yet because of a lack of transparency, the 75% rating company can claim to be the 95% company.

This allows them to allocate less time, effort, and resources to their efforts while still creating a perception of higher performance.

One of the ways they do this is by manipulating the way they collect and measure their metrics.

For example, clean claim rate is an important measure of success. But it is also a metric that is easily manipulated to create a perception of higher performance.

Some companies cherry-pick claims with the highest levels of clean claim success. This reduces their workload while keeping their metric at a top performance level.

But this means that behind the scenes they are actively discarding a significant portion of legitimate (if complex) claims that may just need finessing, adjusting, or multiple runs through the process to generate very achievable revenue.

The top performing companies achieve high clean claim rates because they have better people and processes.

They maintain high clean claim rates by virtue of quality without sacrificing the trickier claims that bog down and need a push to get them through.

But on paper, because of a lack of transparency, both services may look similar.

And in some situations, the better service will look worse on paper because they are providing real accountable data.

Why don’t more billing teams offer better results?
Two reasons. The first is ability.

There are key limiting factors preventing or de-incentivizing companies from achieving the top tier because they are unable or unwilling to invest in the right:
• Systems and technology
• Scalable infrastructures
• Team sizes and proficiency levels
• Quality assurance and control processes

The second reason is profit.

From a business standpoint, the diminishing value of claims above a certain threshold is not worth the added cost to collect.

Why actually perform at peak levels if you can just market as a top tier solution, operate at the optimal level of profitability, and then manipulate the results to give the illusion of high efficiency.

What can be done?
“Once a billing solution is in place,” one of the surveyed CEO responded, preferring not to be named, “the lack of process transparency makes it extremely difficult to properly compare what you are currently generating against what you could (or should) be generating if you had a better solution.”

Tip 1: Take a Cautious Approach
Don’t believe bold claims. We now know that on average 9.5 out of 10 times any claims are not going to reflect the reality of the service provided.

Tip 2: Medium Size is the Sweet Spot
Most of the top RCM service companies were only average or above average. They had the ability but went with profitability.

The smaller teams also fell into the average to above average categories. They often had the desire but lacked the size, systems, and resources.

Over 88% of the highest performers fell into the medium or medium-large size point – the ones with the team size and technology to thrive with the desire to go the extra mile.

Tip 3: Outsource Unless You Already Have a High Performing In-House Team
On average outsourced services outperformed in-house services.

In-house services had higher associated costs and did not achieve the results out-sourced services achieved at those same price points.

The primary exception is having an in-house team in place that is performing in the 80-85% range as the added revenue will not be worth the time/energy to switch.

Tip 4: Utilize Free or Paid Process Audits
This is how you know whether to make a change.

I cannot stress the importance of this one enough.

The only way to truly make informed decisions is to have the information. This is the core problem behind the lack of transparency in the industry.

decison-makingBut luckily there is a solution.

Conduct regular annual or semi-annual third-party audits.

Start general and then if needed go deeper to get to the bottom of any issues discovered.

Many practices or providers shy away from this as it has an associated cost but not knowing has a much bigger cost

Plus, there are ways to limit the expense.

If resources are limited, clinician-centric hospitalist billing companies like Claimocity provide a free overview audit.

They can give you a high level look at where you are verse where you should be and can provide an affordable deep dive into your process should you require it.

If the review lines up, continue with the team you are currently using.

If it is close but just a little under then you now have what you need to demand specific improvements.

If it is not even close, then it’s time to start looking for a new solution.

Tip 5: Be Willing to Make a Switch
No one wants the headache of switching software or services.

But the bottom line is worth the effort.

Surveys show that the main reason for not wanting to switch is uncertainty.

No one wants to spend time and energy sourcing and switching only to end up with something equally as bad or worse.

Audits take this concern off the table.

When you know where you are, you can demand more from new potential solutions and have the means to keep the one you select accountable.

The only thing worse than facing the headache of making a switch is finding out your current solution has been costing you hundreds of thousands annually.

Tip 6: Act Quickly and Decisively if You Need to Make a Change
One problem with a poor process is that it is too late for some revenue by the time it is discovered.

Even a general overview audit will give a framework for how much collectable revenue has been recently lost to expiration dates.

And how much more is coming up.

If an audit discovers significant issues with the current solution, then it almost always takes a high-quality new service to salvage everything that is still viable.

Any delays or indecisiveness will have an associated price tag.

Don’t rush but move quickly to take the next steps.

Which companies topped the list?
We would be remiss if we focused only on problems and not solutions.

There are a few companies worth mentioning that we have conducted thorough evaluations of. We have a good understanding of their abilities and limits. Just keep in mind that there are no one size fits all solutions. It is up to you to evaluate for yourself whether they fit your needs.

We mentioned Claimocity as a possible source for general or deeper audits. It is important to note that they typically only work with hospital or facility-based practices so if your providers see less than half their patients outside the medical office then they are probably not a good fit.

For hospitalists, they offer strong hospitalist medical billing and coding services with complete financial transparency. If you work at PointClickCare facilities, they offer the only two-way clinical documentation and mobile charge capture platform integrated directly into PointClickCare.

Plus, they offer specific and measurable performance guarantees for RCM services which aligns with the need for accountability.

If you work more out of a traditional medical office then PracticeMax is an option that several analysts on our team have looked into and given positive reviews.

PracticeMax boasts a top level coding infrastructure and provides custom RCM solutions for anaesthesiologists, radiologists, urgent care providers and facilities, and emergency medicine doctors and facilities.

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