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Billing implementation project plan

Implementing a new billing service does not need to be complicated or risky.

For health care providers, the transition to a new billing solution (whether it is from one billing company to another or from in-house billing to an outsourced solution) seems fraught with risks, both financial and operational.  But as complicated as it may seem, there are a few due diligence items that can produce a smooth and seamless transition to a new billing solution with little or no interruption in revenue stream.

This paper covers the common risks associated with such a transition and how to minimize or eliminate them.

The problem: how switching can cause drop in collections

The greatest perceived risk of transitioning to a new billing resource is potential delays in collections, or collections that are missed altogether.  There are 3 main reasons why collections may decrease or be interrupted during a transition to a new billing solution:

  1. Claims are delayed by the transition during the changeover
  2. Major billing errors occur as the new resource goes through a learning curve
  3. Existing (legacy) accounts receivable are not addressed or carried over to the new resource

The solution

With proper planning, all three of these most common culprits in delayed or lost revenue can be successfully eliminated.  Here is how to address each issue:

  1. How to avoid or minimize delays

The obvious (but often overlooked) way to address delays is to have an advance plan to ensure that claims start going out quickly after transition.  The chart below demonstrates the impact of a 30-day gap between the legacy billing system shutdown and the new one starting up.

Notice that new accounts receivable (AR) starts a month after the legacy AR begins to drop.  This is beyond typical to the point of a catastrophic event, shown here just for demonstration purposes.  If sufficient planning isn’t done, there can be a delay in startup and therefore collections from the new billing. We can see from the top green line, which is a composite of the legacy and new AR that total collections can drop significantly in this scenario.  Fortunately it is avoidable.

With proper planning and sufficient implementation time, delays such as these can be minimized or avoided.  Adequate lead-time is the critical factor.  It is important to set the transition date sufficiently far in advance to plan for the following aspects of the transition.

Here is a checklist of items that should be addressed prior to the changeover date in order to avoid lost time and revenue:

  • Consulting: This includes everything from fee schedule consulting, patient balance billing options, patient calls, payer contracting, and other aspects of your business. Apache can help you understand what other providers are doing, as well as options available to you.
  • Requirements, policies, and procedures: you will need a comprehensive set of requirements, in writing, as well as all pertinent policies and procedures for review by your new billing resource. The authoring of this document may seem time-consuming, but it will likely save you a lot of time and make the transition much smoother.  If you do not already have comprehensive written policies and procedures, Apache will work with you to develop this to ensure successful execution post-implementation.
  • Staffing (hiring, training, etc.): the new billing resource must not only be properly staffed as of the transition date, but the staff must be trained, and fluent in the written policies and procedures for the particular client as well. It is important to hire experienced billers that are not new to billing because the ramp up of implementation cannot afford to both train on a particular client’s requirements, as well as train on proper medical billing procedures.
  • Billing software configuration: technology supports processes, and so any requirements for the client must be entered into the system. This includes inputting patient balance billing requirements, as well as things like payer policies.
  • Document management setup: This is an often-overlooked aspect of setting up any external business relationship. You will need a system to ensure smooth handling of documents, including document transfer, version management, and security.
  • Payer registration: you need a process for adding any new payers coming into the system, so that if can get done quickly and seamlessly. This flows from the payer mix report provided by the client during implementation.
  • Uploading fee schedules: you new billing provider must understand and internalize all applicable fee schedules, including your fee schedule, those of all of the government payers, and those of any contracted payers.
  • Set up interfaces: interface implementations are typically measured in months rather than weeks. Therefore, it is important to begin the implementation process as early as possible since this improves the workflow and productivity of everyone involved and helps in reconciliation.  Go live typically is with image files or a “light interface”, i.e. an exported data file from the client system.  This may require some manual data entry on the part of Apache for the first few cycles, but is replaced when the interface goes live.
  • Reporting set up: as many required reports as possible should be requested in advance and set up prior to the scheduled go live date.  Reporting has little value without data in it, but early on after go live clients need to see that claims have been processed and have been submitted, as well as be able to track status.
  • Adherence to any legacy contract: if there is an existing billing contract in place prior to the start date with the new resource, review the contract for any pertinent requirements, such as prior notification (e.g., do you have a 90-day notice requirement, etc.).  Review and understand all aspects of any such contract, and plan a contingency if the legacy billing company is uncooperative or slow to comply with anything you may need from them.
  • Double up on claims if required: claims can be submitted from more than one source, so act with a bias toward duplicating claims rather than missing them altogether.
  • Establish required payer accounts:  your new billing resource must establish online accounts with major payers, so they are prepared to check and confirm patient demographics and eligibility, as well as checking claim status after submission. These should be set up on day one of the changeover.
  • Patient statement configuration: a critical component of collections is clear and accurate statements to patients to optimize collection of the patient-due portion of your billing. Your new billing resource will need to set up the frequency of statements and establish the payment terms, etc.  These statements must clearly communicate the complete bill and the balances paid by insurance and the patient.
  • Patient call procedures: patients are the life blood of any healthcare provider, especially if you are a referral-based business. This is why it is so critical to establish good patient call procedures, including what negotiation rules are available, payment plan options, patient financial hardship application, or even if there is a specific script that must be followed.
  • Patient balance billing procedures: establish rules for patient balance billing when out of network. Whether that be balance billing patients in full, waiving some patient balances proactively, caps for patient balances, or any other complex procedures required by the client.
  • Collection agency procedures (if applicable): if you use a third-party collection service, you need to prepare your new billing resource to work within the collections agency’s requirements and preferences, as well as making sure they are equipped to assign collection accounts. Setting up exactly what conditions (if any) cause patients to get sent to collections is critical to avoiding any mistakes, as well as designating a checkpoint within the client to review all potential patients sent to collections.
  1. How to avoid billing errors

A billing company will obviously need to go through a learning curve for every new client in order to become proficient in collections. But this learning curve does not need to come at the price of delayed or lost revenue.

Here is a list of strategies to minimize billing errors in the time immediately after a changeover in your billing system:

  • Payer policy research: make sure the new billing resource is well versed in the policies of all your payers, especially the ones that they may be working with for the first time
  • Reviewing denial reports: identify and review common mistakes and how they can be avoided, as well as successful (and unsuccessful) strategies to address problem claims.
  • Information flow: make sure the transition of the stream of data is successfully switched to the new resource. Whatever information your legacy team was getting must be flowing to your new team on day one of the transition.
  • Documenting workflow: it is critical that the billing company understand any particular nuances associated with the client that might not be obvious. Often the client may not even be aware of their own nuances since they have not been forced to document all of this.
  • Choose a billing company wisely: a billing company should have relevant experience, especially in your medical specialty. This will shorten their learning curve.
  1. How to address legacy receivables

If receivables from your “old’ billing company are not addressed in a consistent and uninterrupted fashion, you will almost certainly see a significant drop in revenue when you make the transition to a new billing resource.

Notice that collections from the Old AR drops faster than a normal AR cycle if no one is working the unpaid claims.  The chart below shows such a scenario:

It may seem obvious to say that the key is to ramp up the new billing collections faster than the old billing ramps down. If the new resource is faster than the old AR ramp down, then composite collections will stay elevated and you will have a smooth transition.

Addressing the following items should be a priority in order to reduce loss or delays in revenue from legacy receivables:

  • Understand the legacy contract (if applicable): if you are transitioning from an existing billing company, you need to make sure you understand what their contractual obligations are with respect to existing receivables.
  • Review the responsibilities of the outgoing team: make a list of what you need and expect from your legacy billing resource. If they are still working receivables after the changeover, they may be complacent or unmotivated.  Make sure to monitor their progress and hold them accountable.
  • Have a contingency plan: someone needs to continue to work the old AR after go live. It is OK to be the old billing resource.  You may need to task your new billing resource with collecting legacy receivables.  Let them know if this is the case and prepare them in advance.
  • Plan for EDI: electronic data interchange (EDI) requires planning for the legacy receivables. The go live for claims submission EDI can happen weeks prior to the planned go live for the billing transition.  While claims can be submitted from multiple sources, returning ERA’s and EOB’s can only be sent to a single location.  We typically suggest that the scheduled go live for returning benefits information be at or close after the go live for billing.  Since this stream can only be directed to one place, the new billing company will receive all returning explanations of benefits and ERAs, including those for claims that were submitted and potentially appealed by the prior billing resource.  A process needs to be in place in order to transmit this data for legacy AR from the new billing entity to the old.  This allows the old billing resource to post payments for the legacy AR and maintain a current accounting of what is still outstanding.


Implementing a new billing company is no trivial endeavor, but with some planning and a good project plan, it can be done with minimal risks to your finances and operations.  In reviewing the above, it should be clear that choosing the right billing solution is of paramount importance, both in terms of your need for the right skills and experience, and also for the importance of good customer service and a consultative, collaborative approach.

The figure below denotes a smooth transition where collections and revenue are unaffected by the transition as a result of:

  • Holding close to the planned go live date for new claim submissions
  • Avoiding major billing problems in startup
  • Old AR being worked after the go live

Billing Company Results

There is no way to guarantee such a result, of course.  Having said that, many billing companies have successfully transitioned a great many clients and have a lot of experience in planning and executing changeovers.  And after all, if you are planning such a transition, it is more than likely that you have much to gain once the new resource is in place.

Talk with the billing company. They should have a well developed plan for implementation to successfully upgrade your billing process and ensure your revenue is maintained through the transition and increased in the long run.

About Ibex Laboratory RCM

Ibex Billing is a laboratory revenue cycle management (RCM) company.  We only do laboratory and pathology billing. Ibex‘s management team has hundreds of years of revenue cycle management experience. Lab billing is different than physician billing and we only do laboratory revenue cycle management.

Legal disclaimer: 

Ibex RCM is engaged in the business of healthcare revenue cycle management analytics.  We offer information about regulations, rules, and industry practices relating to compliance.  Ibex has researched that subject and has set forth the results of that research herein.  Ibex is not a law firm and we do not offer legal advice.  Ibex does not guarantee the completeness nor the accuracy of its research.  You should consult with your qualified healthcare attorney.

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