Billing Breakdown


10 tips to efficiently audit a patient contract.

By Connie Ziccarelli

Busy private practice owners can find it difficult to keep a close eye on billing practices. With limited time and many aspects of a clinic, it is common for billing details to fall by the wayside. It does not take a lot of time dedicated to auditing billing processes, as long as the process is organized. By following this checklist, it is possible to increase efficiencies when auditing managed-care contracts.

Check online directory to ensure all locations are listed
Check insurance websites twice a year to ensure that the addresses and providers listed are correct. Patients often go to their insurance website to see what clinic is closest to them, so make sure all the information is correct. Also, be proactive in keeping your payers updated with any new providers, programming, or clinic locations.

Electronic funds transfer
It is important to make sure you stay current on which payers you can receive money from electronically. If you are not receiving electronically, reach out to your payers and clearinghouses to see if you are able to set up electronic transfers. Electronic transfers offer the benefits of a faster turnaround of funds paid directly to your bank account as well as more secure funds.

Paper payments with correct pay “to name” and sending to correct address
Be sure to monitor what you receive in the mail from payers you are auditing, and make sure that they are paying the correct facility and provider. This is important because it will be recorded on the payment side, which is visible in an explanation of benefits (EOB). Make sure it is accurate information so that your patients are correctly informed.

Electronic remittance advice
Work with your payers and clearinghouses to receive your EOBs electronically rather than through the mail. Remember that speed and turnaround is very important; the faster you receive EOBs, the faster you can receive payments from insurance companies. In turn, this allows you to send statements out sooner to patients for anything due after their insurance pays.

Relationship contact with contracting rep
First and foremost, it is important to establish good relationships with payers. This can help when you need to have a direct liaison for relationship-building activities as well as for problem solving along the way. It is important to keep those relationships healthy because payer reps are stakeholders in your practice, and can also assist in helping patients and other providers find your clinic. Overall, monitor and develop this relationship, because payer reps can be very helpful when working through those problems.

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Updated fee schedule from contracting rep or rate increase
It is important to audit your account so that you are staying updated regarding the most current fee schedule with the payer. This way, you will have the most accurate information passed on to the patient via their statement. In addition, this gives you an opportunity to look at renegotiating rates with the payer, as well as opening up the door of conversation to show the payer the value you bring to your membership. This also allows you to talk about both positive and negative issues that may happened throughout the year.

Review practice management software for the correct fee schedule
As a simple, yet very important step, sit down and make sure that your practice management software reflects most current information.

Review all plan (addresses) to ensure correct adjustment code, fee schedules are linked (financial parameters), and claims are sent electronically
This step involves taking time to ensure that your paper claims are going to the correct address. If you are billing electronically, make sure that the clearinghouse is sending to the correct electronic address. This ensures timely delivery to the correct place, which results in quicker turnaround of cash back to your clinic.

Review claims/ EOBs specificity for payment policy and code specificity
Look at your EOBs and take time to study that you are billing out the correct codes that the biller wants to see regarding your clinic’s services. After this, go back and work with your providers as well as your biller to ensure the coding is correct.

File by contract date
As a general rule, it is a good idea to keep files of your contracts each time you work with a payer. By doing this, you have a snapshot of all the work you have done on the relationship throughout the years. Also, if through this audit you find that it is best to terminate relationship with payer, you will have the contract in hand to know how to proceed.

After all of this

Collection and billing team/information found from claim/EOB review
You took the time to do this audit and go through each facet to make sure everything is accurate. The previous outline illustrates important ways to proactively monitor and organize your billing practices. After going through those steps, be sure to debrief your staff and figure out the best ways to correct mistakes going forward. Always be looking for ways to save time and make your records better.

All in all, it is a best practice to sit with staff and make sure everyone understands where variance could have happened, where you need to fix things going forward, and who is accountable to make sure it gets done. As a general rule, you want your new contract year to always be better than your last. Stamping out even the littlest of variance will be recognized in the bottom line. Whether it is an increase in payment or a decrease in labor for the same payment, it is a great idea to take the time to go through your contracts in a disciplined and consistent manner. Through this, you will be able to monitor and improve your billing services one step at a time.

Connie Ziccarelli is chief operating officer of Rehab Management Solutions and chairperson of the PPS Administrators Council. She can be reached at

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