Technology Tool Box

A series of short weekly chores designed to keep the return on investment in technology at its highest level.

The McKenzie Management Consulting Team see practice data everyday in your offices and while training at our Center for Dental Career Development. It is fairly easy then, to determine “how” a team is using computer system.

Many of the office managers and owners of these practices want to get a handle on their insurance plans. More specifically, they want to know which plans have the highest reimbursement, the lowest reimbursement, and they want to know the volume of write-offs for each company.

We know this because we get the following questions and requests from clients on a daily basis.

Client request: I “think” I want to drop some of my insurance plans.

Client request: I am “thinking about” signing up with additional insurance plans.

The problem most of these offices encounter is having just one code called “insurance write-off” or “insurance adjustment”. Having just one code is OK if you only want to know the total write-off for all of your insurance plans. It is not OK if you plan to systematically measure the performance of your participating plans. A participating office would be smart to measure the performance of plans. You might be surprised what you see!

Here’s what to do……..

1. Add one new transaction code (sometimes called adjustment code) for every current plan with which you participate.
2. Keep the new code in the same code “range”. That is, if your practice management software allows you to add codes within a certain number range – keep the new codes tightly organized together. For instance, if you have to add ten codes and your practice management system gives you codes 00050 through 00080 as insurance adjustment codes – tightly pack these write-off codes. Some practice management systems allow you to add payment code modifiers. For instance, code 50 could have up to 100 additional modifiers. Code 50.01, code 50.02, code 50.03, are examples. Packing your insurance adjustment codes tightly together will provide two benefits. The lookup screen to find the codes will organize the window “by code”. If they are tightly grouped, all of the insurance adjustment codes will be in clear view for selection. The second reason is reporting. If you are going to run a detailed report of your insurance write-offs, you can give the report generator a simple range (50.01 through 50.15 as an example).
3. Name the new adjustment code appropriately. For instance, for Delta you might want to name the code “Delta PPO adjustment”. This clearly tells the team which code to use when they process insurance checks. This will also tell the patient (on their billing statement) EXACTLY what’s going on with their account. Patients would prefer to see an insurance adjustment with their company name on it.
4. Have a short meeting with your business team regarding this issue.
5. Stop using the old adjustment code.
6. At the end of the first day of using the new codes, review the entries with your business team to make sure it is being done properly.

Reporting…..

In about a month, run a report for the last full month on the adjustment code range that includes your insurance write-off codes. Run another report (production/collection by insurance company) for the same date range. Compare the numbers.

As time goes on, increase your date range to at least the last 3 months. This will wash the “noise” out of insurance plan performance.

In 90 days, you will know (as opposed to “think” or “feel”)

1. Which insurance plans have the highest market penetration within YOUR patient base.
2. Which insurance plans pay the highest percentage of your normal fees.
3. How to rate your participation by percentage of revenue, percentage of patient base, and percentage of normal fees.

Bottom line? You want control! The above steps are SIMPLE to implement. Implementing it is FREE (you already own the practice management system).

I hope you find it useful and actually use it!

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