A successful dermatology practice has a lot of moving parts: clinician expertise, patient engagement, competitive marketing. But all those efforts are for naught if your billing system doesn’t keep the cash flowing in.
Issues with medical billing slow down the revenue cycle. Long delays between service and payment make it difficult to operate a practice — to say nothing of growing it.
In this guide, we’ll address the issues that make dermatology billing so challenging, common errors to avoid, and ways to get cash flowing into your practice faster.
Dermatology Billing Challenges
There are many reasons billing is such a challenge for dermatology practices. Strong processes and the right tools can help practices overcome these challenges and avoid mistakes.
Poor Communication
The first challenge a medical coder often faces is incomplete documentation from the clinician. Clinicians are under tremendous pressure during patient appointments. They’re trying to listen to patients, provide excellent care, and keep the day’s schedule moving.
It’s understandable in those circumstances that paperwork may not feel like the priority. But when the record of the patient visit reaches the coder, details matter.
The ICD-10 code for a benign mass is different from the code for a malignant mass. A procedure has one code when it’s cosmetic, another when it’s medically necessary. Even whether a lesion is on the right forearm or left upper arm changes the way it’s coded.
Detailed communication between clinicians and coders is important. Technology can help. An EHR with automated charting streamlines clinician paperwork, recording all the important details in a fraction of the time.
Complex Coding Systems
The codes classifying medical diagnoses and procedures are highly specific. For example, there are nine different ICD-10 codes for acne. The CPT has at least seven different codes for an outpatient visit.
There are more than 14,000 ICD-10 codes, which classify diagnoses, and another 10,000-plus CPT codes, which classify procedures. Even if it were possible for a medical coder to memorize most of the codes pertaining to dermatology, it wouldn’t do them any good — both lists are updated annually.
Coders supplement their knowledge of the code bases with comprehensive code lists. Unfortunately, that sometimes means wasted time and energy sifting through specialty codes a dermatology practice will never use.
A dermatology-specific EHR can help reduce the lookup burden. Its built-in code list is focused on those codes most relevant to dermatology. Plus, the lists in a dynamic, cloud-based EHR are always up to date with the latest changes.
Handling Denied Claims
There are a multitude of reasons a payer might deny a claim, from a misapplied code to a lack of eligibility to a typo in the patient name.
The industry standard in healthcare is a claims denial rate of 5% or less. Nonetheless, somewhere around 15% of claims are denied on their first submission.
The good news is, about two-thirds of denied claims are recoverable. Unfortunately, many small practices simply don’t have the staff hours available to rework those claims. They’re often pushed to the back burner or billed to the patient without another attempt at adjudication.
Automation technology can dramatically reduce claim denials in the first place. A system that automatically fills in basic fields protects against human error. In addition, every bit of manual data entry you can take off a coder’s plate frees up time for them to pursue higher-value tasks, like reworking denied claims.
Implementing an all-in-one dermatology EHR, practice management, and billing solution helped Dermatology Associates of Atlanta increase productivity by up to 60% — no more late nights of clerical work. READ THE CASE STUDY
Performing Procedures Without Verifying Eligibility
Denials based on eligibility should not be a surprise. When the clinician and patient have agreed on a course of treatment, check with the patient’s insurer in advance to see if it will be covered.
If the insurer will not cover the procedure, or will only cover part of the cost, the patient must understand their financial responsibility before moving forward.
Establish a routine process in your office to verify eligibility before procedures are scheduled. Comprehensive EHR and practice management technology can automatically perform eligibility verification in real time and help prevent potential denials.
Upcoding and Undercoding
Upcoding happens when a coder mistakenly uses a code for a more complex procedure than the one that was performed. For example, using the code for excision of a lesion when what was actually performed was a biopsy.
Undercoding is an error in the other direction: coding a less-complex procedure than the one that was performed. For example, if a coder doesn’t understand that multiple moles were removed in a visit and bills the visit as a single mole removal.
Avoiding upcoding and undercoding takes a two-part approach. First, ensure your coding staff receives up-to-date training every year. Second, use technology that facilitates complete, accurate communication between clinical and billing staff. Smart tools will prompt users for the right information and flag potential errors before the claim is submitted.
Failing to Resubmit Denied Claims
Though many denied claims can be salvaged, bringing the practice full or partial payment, a study by the Medical Group Management association found fewer than half are reworked and resubmitted.
The reasons for this mostly come down to time — staff have too many tasks to complete to go back and do the same work over again. But not resubmitting claims leaves significant money on the table.
The right technology can help. Automated tools that reduce human error and data entry save time and increase clean claim rates. Employees can also use these tools to pinpoint the cause for a rejection and automatically generate an appeal with relevant attachments from the patient’s file.
Submitting Incomplete Documentation
Manual charting is a chore that often keeps clinicians at work well past their last appointment of the day. But without detailed documentation, payers are likely to reject a claim.
No matter how valid the treatment was, insurers are unlikely to pay a claim if it doesn’t include documented proof of medical necessity, if the diagnosis code doesn’t justify the treatment code, or if there are gaps in the patient’s information or medical history.
Today’s technology enables practices to submit detailed claims without providers spending hours poring over charts. A smart EHR automatically documents the most critical information during the patient visit, prefilling forms as it goes. Clinicians using these advanced EHRs can often finish a chart in minutes, before the patient has even left the building.
Billing the Same Procedure Twice
Duplicate billing occurs when a procedure is accidentally billed multiple times, or is billed to multiple payers, such as a primary and secondary insurance plan. This innocent-seeming mistake not only leads to a rejected claim, but can trigger a fraud audit.
Sometimes an insurer may reject a claim as a duplicate because of a coding error. For example, if the claim uses an unspecified code for lesion removal three times instead of specifying that lesions were removed from three different parts of the body.
Prevent duplicate billing by using automated cross-checks and following a diligent process for tracking submitted claims.
Improving Cash Flow at Your Dermatology Practice
To improve your practice’s cash flow, manage your revenue cycle, streamline billing processes, and explore emerging trends to maximize productivity.
Manage Your Revenue Cycle
Your revenue cycle begins the moment a patient takes a seat in the exam room, and runs all the way through their payment landing in your practice accounts. Careful revenue cycle management keeps each stage in the cycle moving forward at a steady pace.
Your billing software should be your ally in this. Preload the requirements of each insurance plan you accept — for example, their filing deadlines and information they require with each claim. This makes it easier to submit timely, accurate claims.
Use a tool that tracks and analyzes billing data such as procedures performed, revenue generated, and patterns of denials. Patterns in this data will give you insight into your dermatology practice’s financial health. With this information, you can make strategic business decisions to build a more profitable practice.
Finally, use your billing tool’s automation features. Automate the claims process to streamline adjudication and shorten the gap between service delivery and payment.
Streamline Your Billing Processes
The billing process starts with the appointment. A smart EHR can capture details and prefill forms during the visit, eliminating hours of manual charting afterward.
Check for insurance coverage of a procedure before it is performed. If it’s not covered, offer your patient a payment plan with convenient, automated payments to reduce the risk of default.
Establish an optimized charge capture system to ensure everything is billed and submitted accurately and on time. Automate as much of the process as possible, so that all staff need to do is review and confirm.
Emerging Trends and Technology in Dermatology Billing
Many small practices have begun outsourcing revenue cycle management, with impressive results. Shifting responsibility for billing services to a dedicated vendor can increase collections by up to 10% and decrease AR by up to 90%.
Outsourced solutions can be tailored to handle just part of the revenue cycle or to manage it in its entirety.
Single-platform solutions are also gaining new fans. Historically, dermatology practices might use separate tools from different vendors for their EHR, their practice management, and their billing tools. If you’re lucky, these tools might even talk to one another.
An integrated system from a single vendor eliminates the need for cumbersome integrations and duplicate work. Staff can enter information once and update the EHR, practice management, and payment processor at the same time. An integrated system makes updating records, sending bills, and triggering automations seamless and efficient.
An Integrated, Dermatology-Specific System to Make Billing Easier
Nextech’s dermatology-specific EHR and practice management software can replace an outdated stack of isolated tools. Developed in partnership with actively practicing clinicians, this integrated system is designed to make workflows intuitive and efficient for everyone in your practice.
Nextech’s powerful payments solution takes your practice even further, saving valuable staff time and energy while improving clean claims rates.
See Nextech’s tools in action and learn what they could do for your dermatology practice. Schedule a demo.