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Why Work Comp Providers Need Specialized RCM

November 21, 2017 by Catherine Montgomery

Workers’ compensation is different.

It’s a labyrinth of legal and procedural twists, turns, and obstacles that don’t plague providers in other areas of medicine. When it comes to billing and payment, there’s no way around it: providers need help. If financial success is the goal, wading into workers’ comp without specialized Revenue Cycle Management (RCM) is like going into a blizzard with a raincoat; technically possible, but woefully inadequate.

Providers simply can’t go it alone in this environment. Here are 5 reasons work comp-specific RCM is a must.

  1. Narrow Profit Margins

Workers’ comp presents a special profitability challenge to providers. It’s not that there’s no money in treating injured workers, it’s that the money is frustratingly hard to collect.

To obtain proper reimbursement, work comp providers have to navigate a system in which the default outcome of almost every dispute[a] is denial of payment. To authorize services, they have to jump through hoops[b] that would make the most seasoned circus animals balk. They spend time and money, the value of which starts to rival the revenue they’re trying to collect.

And even after all that, the powers that be[c] can still unfairly deny providers their due with inconsistent rulings[d] on disputes.

The bottom line? Generating revenue in the work comp arena can take more effort than it’s worth. Specialized RCM tools correct this problem, balancing the cost/benefit ratio and improving the return on investment to the point where work comp starts to do something incredible: make financial sense.

  1. Crazy Accounts Receivables (A/R)

Not only is revenue tough to generate in work comp, there can be serious delays in   actually receiving it. In work comp, Accounts Receivable can be a purgatory where money owed from insurers, employers, and their claims administrators are in for a lengthy stay. While rules exist regarding the timely payment[e] of work comp bills, they’re not strictly enforced.

Payment times can vary[f] from payor[g] to payor[h], with some taking weeks or even months longer than is reasonable or required by law. And for those providers still relying on paper billing or a single clearinghouse[i], the delays are even worse.

The solution? Your RCM should include e-billing, complete with bill tracking linked to legally mandated payment deadlines and easily-submittable audit complaints. Show payors that you expect them to pay what they owe, when they owe it.

  1. The Stacked Compliance Deck

As mentioned above, the rules regarding compliance in work comp are weighed heavily in favor of the payor. While there are clear requirements for almost every aspect of authorization, billing, and payment, the consequences for violations are imbalanced, to put it mildly.

Unless the provider has the resources to hold insurers, employers, and their claims administrators to account, the system will ultimately rob them. Adequate RCM includes the tools and technologies to respond to payor non-compliance. Those include:

  • Authorization tools that track the required response times[j].
  • Billing software that tracks payment times.
  • Tools for easy Second Review and Independent Bill Review

        These tools improve profitability in a crucial way: by leveling the playing field.

  1. Administrative Costs

Work comp providers have to fight for their due. So how does one win that fight? Reliable, qualified administrative staff goes a long toward that end, but work comp is simply too convoluted for even the best administrative professionals to keep up. Providers need dedicated software that empowers administrative staff.

For example, take California’s Official Medical Fee Schedule (OMFS) for workers’ comp. This hellscape of ever-changing, complicated billing code is a nightmare to stay on top of. The first thing good RCM does is automate the task of calculating the correct payment[k] based on the most recent OMFS information. That time saved is money saved.

Add the time and resources saved[l] by quick and easy authorization, appeals, and verified delivery of bills, and you’ve got a formula for drastically lower overhead.

  1. Focus on Patients

Finally, top-notch RCM lets providers do the most important thing: treat injured employees and get them back to work.

No one goes to medical school dreaming of the day they’ll get to tackle the challenges of billing and payment regulations. Doctors and other providers, above all else, want to help patients. Every second and every dime spent grappling with administrative issues detracts from that mission. Put simply, good RCM gets the business side of the medical business off the doctor’s plate, so the focus can stay on treatment.

The financial health of a provider’s office directly correlates to the literal health of human beings. The more efficiently your RCM can ensure that, the better off everyone is.


DaisyBill offers everything providers need to streamline workers’ comp billing and payment. Manage your revenue cycle effectively and efficiently. Schedule a free demonstration today, and see what DaisyBill can do for your office.

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Why Work Comp Providers Need Specialized RCM

Workers’ compensation is different.

It’s a labyrinth of legal and procedural twists, turns, and obstacles that don’t plague providers in other areas of medicine. When it comes to billing and payment, there’s no way around it: providers need help. If financial success is the goal, wading into workers’ comp without specialized Revenue Cycle Management (RCM) is like going into a blizzard with a raincoat; technically possible, but woefully inadequate.

________________________________________________

Providers simply can’t go it alone in this environment. Here are 5 reasons work comp-specific RCM is a must.

Narrow Profit Margins

Workers’ comp presents a unique profitability challenge to providers because payments can be frustratingly hard to collect.

To obtain proper reimbursement, work comp providers must navigate a system in which the default outcome of almost every dispute is the denial of payment. In California, payment is always dependent on receiving the required authorization.  Providers spend time and money pursuing approval, the value of which starts to rival the revenue they’re trying to collect.

Specialized RCM tools correct this problem, balancing the cost/benefit ratio and improving the return on investment to the point where work comp starts to do something incredible: make financial sense.

Crazy Accounts Receivables (A/R)

Not only is revenue tough to generate in work comp, but there can also be severe delays in actually receiving it. For workers' comp, the Accounts Receivable can be a purgatory where money owed from insurers, employers, and their claims administrators often exceeds three months. While rules exist regarding the timely payment of work comp bills, government officials rarely enforce these timely payment rules.

The solution? Your RCM should include e-billing, complete with bill tracking linked to legally mandated payment deadlines and easily-submittable audit complaints. Show payors that you expect them to timely pay what they owe you.

The Stacked Compliance Deck

As mentioned above, the rules regarding compliance in workers' comp are weighed heavily in favor of the payor. While there are definite requirements for almost every aspect of authorization, billing, and payment, the consequences for violations are imbalanced.

Unless the provider has the resources to hold insurers, employers, and their claims administrators to account, the system will ultimately rob them. An RCM designed for workers' comp should include the tools and technology to respond to payor non-compliance. Those include:

Authorization tools that track the required response times.

Billing software that tracks payment times.

Tools for quick appeals to dispute incorrect reimbursements.

These tools improve profitability in a crucial way: by leveling the playing field.

Administrative Costs

Work comp providers have to fight for their due. So how does one win that fight? Reliable, qualified administrative staff goes a long toward that end, but workers' comp is too convoluted for even the best administrative professionals to keep up. Providers need dedicated software that empowers administrative staff.

For example, take California’s Official Medical Fee Schedule (OMFS) for workers’ comp. This fee schedule is made up of changing and complicated billing rules.  The first thing a good RCM does is automate the task of calculating the correct payment based on the most recent OMFS information.

Add the time and resources saved by quick and easy authorization, appeals, and verified delivery of bills, and you’ve got a formula for drastically lower overhead.

Focus on Patients

Finally, top-notch RCM lets providers do the most important thing: treat injured employees and get them back to work.

No one goes to medical school dreaming of the day they’ll get to tackle the challenges of billing and payment regulations. Doctors and other providers, above all else, want to help patients. Every second and every dime spent grappling with administrative issues detracts from that mission. Put simply, good RCM gets the business side of the medical business off the doctor’s plate, so the focus can stay on treatment.

The financial health of a provider’s office directly correlates to the literal health of human beings. The more efficiently your RCM can ensure that, the better off everyone is.

DEMO LANGUAGE

For the typical medical practices, the most critical determinant of financial success is the revenue generated from treating and providing services to patients.  To improve the economic health of their practice, providers usually focus on increasing the number of scheduled patients or enhancing the efficiencies of their office staff.  

Since billing is typically done in a far back office or entirely off-site, these same providers will often overlook their billing department. When the occasional savvy provider examines their billing department, they will usually focus on their group health (Blue Cross, United Health Care, etc.) and Medicare bills while dismissing their reduced workers' comp reimbursements as an unavoidable "cost of doing business."  A closer inspection by the provider would reveal the real problem is not the workers' comp payment system. Instead, the problem is the billing software used to collect workers' comp reimbursements.  

All billing software is designed to manage group health and Medicare bills. For workers' comp bills, billing departments struggle to contort their billing software to manage the complexities required by workers' comp billing, and this contortion is the actual source of the significantly reduced workers' comp reimbursements.

DaisyBill is specialized billing software designed for specifically for managing workers' comp bills. Just like Quicken is used for controlling banking and TurboTax is used for filing taxes, providers use DaisyBill to manage their workers' comp revenue.

1. Complete claim information  --> Specific workers comp information 1,000s of payors and addresses in workers' comp (which change).

2. Correct bills - clean bills with clean documentation

3. Fast payments --> electronic billing

4. Workflow management

5. Bill Review - Appeals for Inaccurate payments / denials --> Internal bill review --> appeals

(6. Changing rules)

[a]Parity blog

[b]Why RFA System is Broken

[c]Maximus-bashing blog

[d]Other Maximus-bashing blog.

[e]P&I blog

[f]Fastest Payors blog

[g]Slowest payor blog

[h]Biggest payor blog

[i]mulitple clearinghouse blog

[j]RFA/UR timeline blog

[k]Wizard page

[l]Becker's blog

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DaisyBill is a trusted authority on workers’ comp billing. Thousands of work comp professionals attend our webinars and state agencies and professional organizations turn to us for our expertise. We created this blog to help everyone involved in workers’ compensation; sharing news, tips, and data of interest to the community.

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