Finance Admission Essay on Update of Billing Policies and Procedures

Update of Billing Policies and Procedures

Healthcare Revenue Cycle

Healthcare revenue cycle of management refers to the clinical and administrative functions that help in capturing, management, and collection of the patient service revenue. The aim of most administrations should be to recover payments in a fast way through the development of a good revenue cycle management. Primary stages of revenue cycle include pre-registration, claims submission and early follow up. During the pre-registration phase, the patients should create an account which indicates the insurance coverage and the medical histories. This helps in the creation of the billing claims. Moreover, insurance eligibility certification is essential at this stage to determine whether the private or government payers will support the patient or self-pay (Singh, Simon and John 333). Any mistake done at this phase can hurt the financial health of the firm and thus making it impossible to receive a fee for the services offered. Dialogue should be done with the patient to determine their responsibility. The patient should know the amount of payment that they are responsible for and when they are due. In addition, the financial policy of the organization should be discussed and estimates provided. It is at this stage that the patients are asked for their co-pay in full. Pre-registration details and the insurance coverage should be verified before the patient is allowed to leave office.

Claims submission is the second stage. Once the patient has been treated, the coder identifies the nature of treatment given and assigns a proper ICD -10 code which shows the amount payment that the organization will pay for the treatment. After the creation of the claim it is sent to the private or government payers to release the required payment (Singh, Simon and John 337).The organization will be responsible for posting the fee, processing the statement, and handling the claim denials. Once the payer receives the application they disburse the payment depending on the contracts with the patient and the health organization. Appeals are filled if the payer denies the claims. Early follow up is the last stage. In this stage, the patient is monitored to ensure they pay the remaining balances. A collection of the balances should be done within the shortest time possible to avoid long intervals which lead to increase in the cost of collection. Patients should be followed up by phone rather than by writing (Singh, Simone Rauscher, and John Wheeler 334). The balance which is not paid after a particular period ends up being written off as bad debts and are sent to the medical debt collections.

Pricing Structure. It is important for the company to decide the type of pricing methodology to use to achieve the long-term goals. There is no particular way when determining the pricing strategy and thus the following factors will be considered. The company needs to consider the positioning of the pricing strategy. By this, if the company deals with luxury products, it should not charge too low prices. On the other hand, if it is a discount store it should try to keep the costs low. Additionally, the company will determine how the pricing strategy will affect the demand for the products. A simple questionnaire will be used to determine if the customers would buy a product at a given price (Hagiu, Andrei 71). Other factors that the firm will consider when determining the pricing strategy include, costs associated with the goods or services and the environmental factors like competition.

The company should adopt a cost plus pricing strategy. It involves setting the price at the company’s production cost (fixed cost and cost of goods) and a certain profit margin. In other words, a particular percentage of the total cost is added to the cost of the product when determining the selling price. For instance, if the company incurs a total cost of 100$ to produce one unit of a product, it may consider adding 50$ to the price to earn a profit of 50$. This strategy requires minimum information and involves simple calculations. Furthermore, demand based pricing strategy can be adopted. It is one in which the price of a product or service is set depending on the level of demand. If the demand for a product or service is cheap the customers will be charged low prices whereas when demand is high the price of the products will be high to gain significant profit. For this strategy to be effective, the company’s analysts must analyze the demand of the product. This approach will help the firm earn more profits if the clients accept to buy at the high prices. Competition based pricing strategy will be adopted. This approach involves considering the prices of the competitors before setting the price of a product or service. The company may consider selling their products at higher, lower, or equal prices to that of the competitors. Furthermore, the company may take into account other pricing methods such as going rate pricing, value pricing, and target return pricing and transfer pricing.

Negotiating Insurance Contracts

Contracting with the insurance companies may be competitive and often asymmetric endeavor. This may vary depending on the location and specialty across a country and most of the insurance companies do not want to lose some of their customers. In most cases, the fee schedule is the most important aspect during contracting because every provider wants to maximize the practice revenue. The company should adopt a look back provisions in the contracts. By this, the deal should allow the company and the insurance company to amend the payments retroactively (Schouten, Pieter 41). The insurance company should let the company check for refunds rather than the insurance company deducting the amount in the future payments. Additionally, the company should set goals for the relationship with the insurance companies. It should consider whether the relationship is a short-term or long-term partnership. For instance, for short-term agreement may take into account insurance of the employees while the long-term agreement may consider risks such as fire or theft.

The company should gather enough information about an insurance company before contracting it. The information will help define whether the organization’s practice is financially and operationally compatible with that of the insurance company. The agency should ascertain the mission, mission, and values of the insurance company to determine the goals of the company. Moreover, organizations that have worked with the company should be identified to ensure that the hospital privileges provided are legit. The organization may enquire whether the company can process the claims in time and whether it supports the poor.

Private Pay and Charity Care

Healthcare organizations should conduct periodic reviews of their private care and charity care policies to ensure that they meet the needs of the uninsured and poor people in the community. Any individual should not be denied emergency health services because of money. The hospitals should communicate this to the community members to emphasize that emergency amenities are availed with no consideration of the payment ability. Furthermore, organizations should have charity and private care policies, which are consistent with the values, and mission of the organization (Nissim, Doron 340).These policies should take into account the ability of the patients to pay for their healthcare services and the infirmary’s capability to offer healthcare. The commercial aid programs should be readily available and comprehensible to the patients served. Policies set by the hospital and other agencies to collect debt should emphasize on the core values of the hospital. They should be scrutinized to circumvent unintentional results.

Physicians should first ask the patients about their financial concerns rather than wait for the patients to raise it. This information is relevant if the financial consideration is likely to affect service delivery. Physicians make decisions on whether to transfer a patient to a charity care facility or whether to retain them at the facility. They should consider that services might be better somewhere else if the patient is from a minority ethnic group. Furthermore, the physicians should have enough knowledge about the resources available to the organization and in the community for the medically needy (Piper, Ed 1799).They should ensure that the poor patients fully benefit from the private and public resources available such as pharmacological industry indigent drug programs. Physicians should also lower the cost of their services if they have full evidence that the patient has a financial hardship. If reducing the cost of the services affects the financial viability of the organization, the physician should advocate for the adoption of charity policies that ensure needy patients are provided with subsidies.

Work Cited

Hagiu, Andrei. “Strategic decisions for multisided platforms.” MIT Sloan Management Review 55.2 (2014): 71.

Nissim, Doron. “Relative valuation of US insurance companies.” Review of Accounting Studies 18.2 (2013): 324-359.

Piper, Ed. “Hospitals’ Charity Care.” Health Affairs 34.10 (2015): 1799-1799.

Schouten, Pieter. “Big data in health care: solving provider revenue leakage with advanced analytics.” Healthcare Financial Management 67.2 (2013): 40-43.

Singh, Simone Rauscher, and John Wheeler. “Hospital Financial Management: What Is the Link Between Revenue Cycle Management, Profitability, and Not‐for‐Profit Hospitals’ Ability to Grow Equity?.” Journal of Healthcare Management 57.5 (2012): 325-341.