You see a patient. You bill for your visit. You get paid for that visit. Nothing you didn’t already know, right?
Well, as a physician, have you ever thought about how this all impacts the overall profitability of your practice? Have you thought about how this works to pay your salary? Let’s take a step back and talk a little bit about how a practice earns revenue and where you fit into it all.
In general, a nephrology practice has three main revenue streams: the office/clinic, dialysis centers and hospitals. You will likely be seeing patients in all three settings and you will have to bill for your services at each of them. The difference between the three is their overhead and how much a visit at each location costs the patient and/or insurance. The dialysis centers and hospitals have the least overhead associated with them because you’re not responsible for “keeping the lights on” in those settings. The practice office overhead includes things like general and administrative expenses, medical supplies and occupancy (lease, lights, heat). In regards to how much a visit in each setting costs, typically you are able to bill more for visiting a patient in a hospital or dialysis center. So that means you make the least per patient visit and the overhead is the most when you see patients in your actual practice office. Why keep an office and not just see patients on dialysis and in the hospital then? The answer may be different for each practice, but we believe one of the biggest reasons is because your office is where you see CKD patients to try and keep them from going into the hospital or being on dialysis in the first place.
As you already know, each condition that you see a patient for has a code (Evaluation & Management code; E&M for short) associated with it so that you can correctly note what the visit was for so you can be paid appropriately for it. Not every visit is created equal and are formulaically based on work effort, severity of illness and more, therefore some visits will pay more than others. Someone in your practice will be responsible for collecting all of those codes and submitting them to the appropriate payor. The payor then accepts the claims and sends payments. This process can take up to 90 days. If the payor denies a claim, it is then sent back to whomever is responsible for the billing so that corrections can be made and resubmitted. This process costs about $15 per claim1 and then the process begins again.
We believe it is a good idea to have a conversation with the leaders of your practice to help you understand how the billing and coding works for your practice specifically. Some questions you might consider asking include:
How are denied claims handled?
What percent of billings are denied?
What is the percentage of collections?
As always, we are happy to help answer questions or direct you to someone who has the answer. Feel free to email us at firstname.lastname@example.org at any time!
1 The Physician Billing Process, Navigating Potholes on the Road to Getting Paid – 3rd Edition, Deborah Walker Keegan, PhD, FACMPE, Elizabeth W. Woodcock, MBA, FACMPE, CPC