The decision and the reasoning

Everyone in the building called it collections

In 2015 I took my first fractional seat, as Chief Operating Officer of a cosmetic dermatology group in California, to run its practices day to day. The clinical side was very good and the business side was very sloppy. That was my summary at the time and I have not improved on it since. The schedules were full, the patient base was growing, and the money collected kept trailing the money earned.

The group still practices under its own name. Its public site and its page about the practice show it as it presents itself today.

The people in it were the owner, who saw patients all day and treated the business side as something that happened between them; a billing lead who worked the denials as they came back and was the only person in the building who saw every rejection; an office manager and a front desk who kept the paperwork, or tried to; and the practitioners at each site, who were clinicians and had never been asked to be anything else. Nobody on that list was lazy, and nobody was wrong about what they could see from where they stood. The story inside the building was collections. Claims went out, too many came back short or not at all, and so the answer everyone reached for was to chase harder. Appeal faster, add a biller, or hand the whole function to an outside billing company that takes a share of what it recovers.

What the group actually needed was smaller and less flattering. It was not paying for the right software. The software it did have was not set up correctly. The numerical billing codes it billed against were out of date. And the office paperwork had come apart, so the front desk could not reliably put its hands on its own records when a payer asked for one. Put those together and the claims were wrong before anyone chased them. Effort only recovers a valid claim. A claim built on a code the payer no longer recognizes is not slow money. It is no money, and no appeal cadence brings it back.

One question before any effort

The collections story assumes the claims are sound and only the follow-up is weak. I did not know that, and neither did anyone telling me the story. So before I looked at staffing I turned the story around and asked what would have to be true for it to be right. The claims would have to be right when they left. That is one question, and it can be answered in an afternoon by taking a single denied claim and walking it backward from the payer's rejection to the chair where the procedure happened.

I did that with the billing lead. The rejection reason on the claims we pulled was not eligibility and it was not timely filing. It was the code. The code table the software billed against had not been refreshed, because the practice was on a software tier that did not carry the updates, had never bought the plugins that did, and had never been set up to pull what it could. When I asked when the codes had last been brought current, the question had no owner, so it had no answer.

From there the options sorted themselves. Adding a biller works harder at the wrong layer. Buying a new platform replaces a system whose only defect was that it had been left alone, and a migration takes months a four-month seat does not have. An outside billing vendor is paid on recoveries, so it has limited reason to remove the cause of the denials it is paid to work. The fix at the level of the defect was cheap and boring. Pay for the software tier that carries the updates, set it up properly, correct the codes in use, and put one person inside the practice on a weekly check that every code in use is current. Then rebuild the paperwork so the office could find its own records, and draw a line between staff and practitioners where business and personal had grown together, which is a structural fix and not a personnel one.