Reimbursements: Sep 07

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Q.  Is it good if a prospective billing company guarantees collections? 

A.  Rule #1: If it sounds too good to be true, it probably is. Recently, some billing companies have offered guarantees of collections to ED physician groups, some even making offers without performing a chart audit. These guarantees range from a guaranteed increase of X dollars per patient to X percentage increase in net collections. From a smart business contractual perspective, how could any third party make these types of guarantees? In my humble opinion,
this is a marketing gimmick and should be treated as such. A chart audit is usually necessary
to provide a realistic projection of collections based on the appropriate economic drivers. The appropriate economic drivers include but are not limited to payor mix, acuity mix, physician documentation, coding mix, and managed care contractual rates.
The billing company can’t control most of the economic variables that affect reimbursement. Often, not even the physician group can control the most important economic drivers. Furthermore, most billing companies would not guarantee collections without a chart audit and without a healthy plethora of contractual fine print that provides outs in the event of any changes to the economic drivers that
affect collections.
The one instance when a guarantee might be realistic is when a prospective billing company is replacing a company that is doing a very poor job and where the potential for improvement is enormous. However, these situations are rare. If a billing company makes you a guarantee, proceed with caution. Ask yourself, “Why would they be willing to pay me money out of their pocket for economic downturns that most likely are not in their control?” Truth is, billing companies would
not want to do this and thus getting your money in the event of the downturn may prove very difficult.
Bryan Vinyard is the president of Comprehensive Medical Billing Solutions.

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