How to Change Billing Companies Without Interrupting Cash Flow

There is a widespread perception that cash flow might suffer temporarily when a practice or entity transitions from one billing company to another. This misunderstanding is the leading reason decision-makers hesitate to make a rational decision supporting a change.

The key to minimizing, and eliminating, an interruption in cash flow lies in the proper timing, planning and execution of a transition plan that requires clear, regular communication between the client and the new billing company.

Timing

Too often the new billing company offers a very aggressive transition plan (30 days) either in response to a customer demand or as a selling point that wins the business from a competitor. In either case, both the client and the over-eager billing company are setting themselves up for failure.

Granted, there may be extenuating circumstances that require an accelerated transition period. These are valid exceptions. However, in the absence of extenuating pressure both parties should understand the risk caused by unwarranted acceleration of a transition timeframe and should accept shared responsibility.

If new provider enrollment numbers are not required, then a minimum of 60 days should be honored. Anything less will jeopardize the ability to notify payers and allow sufficient time to recognize any requested changes, to set up systems, test interfaces, or complete and send ERA/EDI documents. Also affected is the required time to understand the nuanced workflow that is specific to each client (no two are identical) in advance of the first claim.

In the end a proper timeframe will help ensure that the first claim goes out on the first day of service, or within the charge lag parameters currently in place. If charges continue to be billed without interruption and with clean claim information, you are well on your way to preventing a cash flow interruption.

Planning

 Allotting sufficient time does not, by itself, protect one from cash flow interruptions. An implementation plan, complete with as many details and deadlines as possible, should be jointly developed by both parties. Such an implementation plan should be co-developed by both parties prior to setting a transition date. It is not our intention to offer a comprehensive list of the critically important and most basic ingredients of an implementation plan. Our goal is to stress the importance that both parties be fully engaged in the development of the implementation plan and its time frames.

As there are no two identical clients, there are no two identical implementation plans. Any reputable billing company should have a basic implementation plan. Only careless, or less than reputable billing companies, would offer their plan as the “gold standard,” one that is sufficiently comprehensive and accommodating for all client types. It is the seasoned and reputable billing company that will openly share its appreciation and respect for a client-specific, customized implementation plan. Many are similar, but no two are exactly alike.

Execution

Planning your work does not ensure the work will be performed in the timeframes you desire. Collaboration is imperative since both parties are dependent on each other for the exchange of information. Shared respect is equally important as is the need for both parties to hold the other accountable for the agreed upon timeframes.

From the client’s perspective, there is current work to be performed while the billing transition takes place. Requests for information from a new billing entity will be additional work with which the client is burdened. From the new billing company’s view, many questions will need to be addressed by the first billing company. This is a particularly delicate situation for the new billing company, and one the client needs to accept.

Most importantly, deadlines need to be held rigid. Remember, the deadlines lead into the transition date and any delays will impact either the transition date or the final preparedness of the new billing company. Stick to your agreed upon deadlines. If you don’t, you will either need to postpone your transition date, or start the transition without being properly prepared. In either case, you have lost the battle to prevent an interruption to the cash flow cycle.

Bill Gurney is vice president of revenue cycle management for Medical Imaging Specialists. Bill has 19 years of management responsibly in health care administration. He also managed the medical portfolio of a large national bank and served as an account manager for an International Fortune 17 company.