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5 Challenges of Managing a Medical Office


Medical office managers across the US report having the same or very similar challenges. It can be helpful to join a forum to share stories, as well as offer and receive excellent advise. Sometimes it is just helpful to know you are not the only one.

Five of the top challenges of managing a medical office making an impact this year are as follows:

1. Version 5010 Transition

The transition to 5010 is the biggest challenge providers are facing right now. Version 5010 requirements slightly vary from Version 4010 but if the provider has not made the appropriate updates, claims may deny by certain payers. Here are three of the top reasons that medical claims are denied or rejected by insurance payers.
  1. Billing provider address must be a physical address. It can no longer be reported with a P.O. Box. Use the pay-to-provider address line to enter a P.O. Box address where payments can be sent if it is different from the billing providers physical address.
  2. The way insurance subscriber information is reported has changed when a patient is a dependent of a subscriber. If the patient is listed on the insurance card with a unique member ID#, use the patient's name in the Subscriber field. Only use the subscribers name, when all members on the health insurance plan use the same number.
  3. Procedure code descriptions are now required for non-specific procedure codes and can be entered on the description service line segment.

2. Rising Operating Costs

Decreasing physician payments, fewer patients, and high technology costs can be financially crippling. The best way to handle rising operating costs is to monitor them and then develop a plan to cut costs. Three areas that can add up to thousands of dollars in savings per year include:
  1. Office supplies: Remember these words - reduce, reuse and recycle. Learning to use office supplies wisely can cut costs substantially such as cutting used paper into squares instead of buying sticky notes. Going paperless and bargain shopping for the best price are other ways to lower office supply costs.
  2. Medical supplies: Buy medical supplies as needed. Buying in bulk can save money but if you don't need it, don't buy it. Some supplies have a limited shelf life and could cost you more in the long run if you have to throw them away. You can also try to identify opportunities to get free trials from vendors promoting new products.
  3. Office equipment: Try to find used office equipment for sale when making large purchases. There are a number of online resources that you can find great prices for office equipment from going out of business sales. Online auctions are also an excellent way to find older equipment for low prices.

3. Hiring and Retaining Medical Office Staff

Outsourcing human resource duties can lower costs especially for a small practice. However, if you choose to keep this responsibility inhouse, you must be proactive in hiring and retaining medical office staff. High turnover can be costly and hurt office efficiency and patient satisfaction. Offering an excellent benefits package, having a recruiting strategy and knowing how to motivate your employees are key to finding and keeping a productive office staff.
  1. Employees view the benefits package, in addition to salary, as a significant factor in their decision to apply for or accept employment within an organization. Quality employees can be a lot easier to attract if your medical office is offering an attractive benefits package.
  2. Recruiting a successful medical office staff is an important responsibility. Customers of a medical office are not typical customers. They are patients that expect the highest quality of care and some may be in the midst of a medical crisis which requires delicate handling. Not only is it important for the staff to have certain professional skills and strengths, it is imperative that they understand that patient lives are reliant on the quality of their work. Effective planning is essential for recruiting success.
  3. As the leader of your organization, one of your many responsibilities is to find ways to motivate your employees. It is important to understand what factors influence maximum performance and how.

4. Negotiating Managed Care Contracts

Negotiating managed care contracts requires comprehensive knowledge of the contracting process. This generally includes reimbursement rates, effective and termination dates, claim filing guidelines, payment terms and other contract provisions.

Before you attempt to renegotiate your contract, consider the following:

  1. Perform a market assessment to re-evaluate the case mix
  2. Compare contracts to determine if any are out of balance with market competition
  3. Take a realistic approach regarding payment methods

5. Collecting Patient Payments

In recent years, the entire health care industry has become more aggressive in their collection practices. With the ever-rising costs associated with health care, it is extremely important to the livelihood of any facility to get the maximum reimbursement which largely relies on patient payments. Collecting patient payments can prove to be a lot less difficult when:
  1. Advises patients prior to their visit of your collection policy preferably during scheduling.
  2. Make sure you have signs posted in your office advising patients of your collection procedures.
  3. Offer discounts for patients as an incentive to pay their bills in a timely manner.

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