Building an Ideal Billing Team

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Today we are going to be talking about how to build your ideal billing team. One of the things people become confused about sometimes here is when we talk about billing team, we're not necessarily talking just about insurance, we're talking about accounts receivable as well. If we can put the team together that's going to be responsible for your accounts receivables in general, the strategy that applies here can be tactically repurposed depending on the situation you're dealing with. You don't want to have a specific answer for each individual case from the top down just because you're going to run into that situation where you're constantly trying to figure out what applies to each situation as opposed to having a formula that applies to everything.

Formulas generally help us more than having to memorize each individual answer to every situation. That also applies, because we're dealing with not just cash and insurance, but also with cash, we're dealing with different cash models too, where we're taking upfront or over time and we're using care credit or some kind of financing option. With insurance, we're dealing with major med, we're dealing with workers comp, we're dealing with personal injury. So, there are a lot of factors to think about. However, if you set your team up for success strategically, then you can leave a lot of the tactical decisions up to the individual team. As long as they are well trained and they have this structure, generally, your tactical team is gonna be able to figure out how to solve each individual problem on their own, and that actually makes for a better team. The last thing you want is to be constantly on top of your team. It's going to make them crazy and it's going to drive you crazy.

The first thing we need to figure out is what problem are we trying to solve. That is exactly what we're talking about is low AR or low collections or low reimbursement or low timely reimbursement. What we are referring to is when the accounts receivable just isn't being managed correctly, and we need something in place for that. We talk about what the opportunity is. Well, that depends on the practice you're talking about, but generally, if we're talking about timeframe, we're talking about how much money is out there over a certain period of time going uncollected. Generally, the percentages may change but once you get past a certain point, the likelihood of collecting a payment whether it's from an insurance company or a patient is gonna decline over time.

We know that when it comes to insurance companies, that relationship is always adversarial. With patients, it generally isn't but again, if we don't have the right structures in place, we're going to get very similar outcomes. So, the opportunity here is generally in the tens to hundreds of thousands of dollars. We also generally want to look at that as a percentage of our revenue. Now, when we work with practices, we generally see this dollar amount reflected in 20 to 45 plus percent of what they're collecting each month, so that is 20% to 45%, before we start working with our clients. Ideally, that number should be well below 5% but a lot of the time this is what's going on because we don't have the proper structure in place.

The difficulty in solving this problem, or in other words, why don't the tactical teams figure this out themselves or how come you haven't done it yet? Well, the reality is, a lot of what goes into this approach comes from scalability or a scaled model. Now, in our case, we manage over half a billion dollars in medical billing, so as we scale up, we start to understand. We'd be inefficient if we did not recognize different types of patterns evolve and know how to build the right kind of team. Those are the kinds of things we learn as we get to a certain level of volume. So, the difficulty here is in lack of scalability. Much of the time when we talk about lack of scalability, all we are really saying is that as an individual clinic, the volume just isn't there to justify figuring out or seeing these patterns that determine this way of doing things.

When we talk about our approach, we're talking about a strategic team tactically motivated. Right? What that means is that we need four levels here. Now, I'm gonna start...generally, everybody wants to know what are the first, second, third, and fourth? I'm gonna do it in the opposite direction because as an owner I'm thinking about how I want to be looking at my structure. I can always put myself here at the top or whoever is going to run this department. This is typically your executive director or in a very large organization that could be a CFO, that could be a financial director, that could be an office manager. In a smaller office, maybe the owner functions as all those things. Whatever that role is, we're going to call it executive direction or management, whatever you would like, but this is stage or level four.

Level 3 and Level 2 are connected in that they are both considered what we call, "quality assurance." This is crucial here. Quality assurance is a crucial part of this process. I'm going to debrief how these have to be separate and where they can be linked, because again, when we're talking about four different layers of teams, much of the time, smaller offices are going to struggle here because they simply do not have the number of people required for this. As a result of this, at times you’re going to see that you need to combine things. However, you still need to achieve these four separate locations or these four separate levels.

Now, number one is my tactical team. This is my SEAL Team 6. These are the guys that get the job done. These guys are at the ground level, they're making the phone calls to the patients and/or the insurance companies. However you are running your practice, whether it's 50/50 insurance or cash, whether it's all cash, whether it's 80/20 in either direction, these are the people that get the money. These people are your tactical team. The best way to figure these guys out is by the numbers. So, let's say in a given day or in a given week, my tactical team has to follow-up on 100 patients. 100 patients could be 100 patients, 50 of those could be calling on the patient's insurance or all of them could be calling the patients directly if you're all cash. Whatever it is, there are 100 patients that my tactical team needs to address.

Now, how they address those issues are going to be dependent on what we're talking about. Whether it's cash and we're just following up on an owed balance, a payment plan if a credit card was rejected on their normal payment schedule. Whatever it is, they have a process for that. On the insurance side, same thing whether we're talking about major med, workers' comp, personal injury. In any of those situations, they have to have a process for each of those things. Generally, the way you want this to run is have your tactical team devise the processes for each of those situations, have them figured that part out, and have them do these mini four Q&As on each item. What they'll do is they'll actually end up building the most streamlined process. They'll build a process and then you're going to go ahead and check that four Q&A. You're going to have a process written for PI, for cash, etc. and a team who not only has a process that works because you've checked it and you made sure that it's the right way to go, but they will be motivated because they started creating this. As a result of this, they will have a sense of ownership and they're going to feel a lot more motivated to follow these plans through and hold onto them. They're also going to be more vocal in terms of coming up with good solutions as opposed to just complaining when something isn't working that needs solved.

That is the tactical team. What's my quality assurance doing? My quality assurance team is going to be checking a subset of my tactical team. You don't want them checking everything because you'll have that mother hen thing going on where you're on top of your team, and you don't really wanna have that going on here. So, generally, what we tell people is if you're going to do 100%, do it for a short period of time to figure out what percentage you're seeing problems with. Generally, though, our teams get to a point where we want them looking at 20% of my tactical team's work. In this case, really easy math, we're talking about 20 patients.

So, my Q/A Level 1 is my second tier. Q/A 1, will be looking at 20 of these 100 patients and their job is to find mistakes. In fact, the best way to set this team up is to bonus these people on finding tactical mistakes. Now, what that's gonna do is it's gonna make Q/A 1 motivated, incentivized to find problems. What's the obvious conclusion? The obvious problem that we're gonna find here is they're gonna notate problems on your tactical team maybe where there aren't problems in order to make their bonus. So, what do we do? We put a second Q/A team on top of the first Q/A team and they check 20% of Q/A 1. And what they do here, now this math is a little bit different. So, we've got 20 patients here, 20% of 20 patients. Easy way to do this math is to figure out what 10% is. Just move it over. That is 2 and you have 20, so times two. That is four patients and their job is to look at Q/A 1 to make sure that they're not erroneously calling out the tactical team.

Now, again, because we're talking about a small number here, you might have Q/A 2 look at 100%, all 20 of these quality-assured patients. Regardless, if the numbers get high enough and you're not finding a tremendous number of problems, you can drop Q/A 2 to a smaller percentage as well. At the end of the day, these two groups have to be different. You cannot have Q/A 1 and Q/A 2 be the same people, because again, one is incentivized to find mistakes on the other. Same applies to your tactical team. The tactical team cannot be Q/A 1 or Q/A 2.

Now, how do you make that work? Generally, if you have a very small practice, anybody in the executive direction role, who is responsible for this structure, is going to maybe function as both in charge and Q/A 2. That's pretty standard. So, really you just need your tactical people, your Q/A 1, and then whoever is in charge. That's really, really important. So, now what we can find here, are mistakes. If we find that Q/A 1 finds two problems, Q/A 2 is gonna look at those two problems and they're going to say, "I disagree with one of them." Now, whoever the executive direction is or whoever is in charge, is going to arbitrate that information and they're going to arbitrate this dispute. On the one that you disagree with on the quality assurance, they are going to say, I agree with either the tactical team and that they were right in the first place OR quality assurance and they deserve their bonus.

This structure allows me to step back as an owner and rely on my tactical team to be my Navy SEALs who will go in and get the job done. My Q/A team will ensure that my tactical team always functions at their best and that when they do make mistakes, we catch them as soon as possible and make the correction. If there's a problem, a pervasive problem happening, the Q/A 1 will notice it on the tactical team and help us come up with a new approach here. Q/A 2 will dispute any disagreements between my tactical team, my Navy SEALs, and my quality assurance team. Then, as the owner, I just need to look at the overall stats which is what we talked about last time we were talking about billed, collected, my accounts receivables. Now, when I look at my problem, which is low AR, I can look and be assured that if my benchmark is my AR beyond 120 days, I can figure out what is there over four months. Then I can say, when I put this plan into place at the very beginning, my AR over 120 was 25% on day one. Question is, now that I put this into place, let's say three months later, what is my new AR over 120? If you've dropped it more than 5%, we call that statistically significant. It means that this was worth it. However, generally, this approach should drop you to less than 5%. If it doesn't do that, something in here isn't being run properly, because this approach absolutely works.

When you put this into place, remember make sure you have a benchmark for where you are and look at it at a certain interval that everybody agrees on: three months, four months, five months, six months. Agree on when you're going to check on this number again. But just like checking your weight, don't check it every single day because you're gonna have ups and downs. You don't want to get into that situation where you put this process into place and suddenly at day two, you went from 25% to 28% not because of what you just did, but because there was already stuff that was going to affect your AR over 120 and make it worse from what you were doing up until you put this into place. Be careful that you do not over analyzing your statistics too soon. Agree on a path here. Make sure your team owns the tactical approach, and you have a one Q/A 1, Q/A 2, and ownership on this process and you'll have the absolute best billing team with regards to cash and insurance in the industry!