4 Things for Practices to Know about Billing Partnerships

A physician practice's ability to properly bill and efficiently collect from patients and third-party payers is the difference between a practice that thrives and one which fails.  For this reason, a strong partnership between the practice and billing company is key to a practice's success, and yet so often these relationships end with legal disputes and financial suffering for the practice.

The time when a practice finds out whether the agreement it maintain with its billing company will help or harm the practice should not be when the relationship between the parties has ended.  Yet surprisingly, many practices fail to carefully review their billing agreement or seek legal guidance before signing such a document.  If you are considering entering into a billing agreement, or a renegotiating such an agreement, consider the following:

1. Make sure the billing company you have selected can meet the practice's needs.  Does it have the experience, personnel, and infrastructure to handle the volume and type of claims the practice will be generating?  For example, if your practice is doing Medicare anesthesia, a billing company that handles pain management claims may not have the expertise or software to best serve your practice needs.  Additionally, make sure you meet the staff that will be handling your claim and do not be too shy to ask for references for the individual or the company.  While many billing companies specialize in certain types of billing, others claim to have expertise in a wide variety of areas.   No one company can be an expert at everything and due diligence is worth the time and effort.

2. Any agreement signed by the parties should specifically outline the duties and obligations of each party.  How quickly will claims be processed by the billing company and what reports must the billing company provide and how often?  What is the timeframe for contacting the practice regarding issues with claims, rejections or denials, and other issues that may arise?  By laying out the expectations of both parties, disputes can be greatly avoided.  I also always recommend a framework for regular meetings and a process to handle disputes that may arise.

3. Sometimes the relationship between the parties comes to an end.  If the practice must switch to a different billing company, how will that process will work?  For example, how much time does the practice need to locate and be ready to transfer to a new billing company?  What type of cooperation is required of the old billing company in transferring records, claims and reports?  How can the practice prevent the billing company from holding accounts receivable and records hostage? How long is the practice obligated to allow the old billing company to continue to process claims from the practice?  These are the areas which can lead to legal disputes between the parties and it is always advisable to work them out in advance to limit turmoil.

4. Many practices rely on a billing company to do more than just bill, such as provide education and assist with compliance.  Some billing companies code off physician notes using independent discretion, while others simply process claims.  Depending on what role a billing company takes on, it is essential to understand the liability of each party in the billing arrangement. Almost every billing company tries to completely limit its liability, meaning taking no responsibility for any of its acts or omissions.  This includes sharing in the financial consequence of payer recoupments, fines, or investigations.  In some cases, this may be reasonable,  but where a billing company has taken on a greater role than simply processing claims, and its billing, coding and advice is relied upon (and faulty), deferring all liability to the practice is unreasonable.  Unfortunately, this this is an issue rarely discussed by the parties when a contract is signed and, even if it is, billing companies typically fight changes to this language, leaving physicians no choice but to accept as-is.  Physicians should understand the agreement into which they enter, good or bad. Finally, appropriate insurance covering government investigations and audits, as well as HIPAA violations, is essential for both parties and every billing company should be able to show coverage for malpractice.

Physician practices are businesses, and need strong partners to be successful. Make sure your billing company is an equal collaborator and has the expertise your practice requires to survive and thrive.  Take the time to develop and understand the legal relationship your practice maintains with its billing company, and seek out the terms that will best help and protect your business!