Engagement

After preparing a non-profit skilled nursing facility's Medicare and Medicaid cost reports in 2002, we noticed that the provider had an expense account in the general ledger with a description of Medicare Billing that had a balance of $248,000. After questioning the provider, it was revealed that they engaged a collections firm to do all Medicare Billing because the provider did not have access to billing resources and experienced staff necessary to bill Medicare and wished to focus on patient care rather than billing. The collections firm was charging their standard 20% of collections fee.

Method

We explained to the provider that when a collection firm charges 20% of collections, that fee structure is only reasonable after the provider has exhausted all in-house billing efforts. After the provider's effort to renegotiate the billing arrangement with the collections company failed we agreed to hire experienced personnel under firm supervision and provide Medicare billing services to the SNF on a monthly fixed fee basis rather than a percentage of revenue.

Results

We dramatically improved the timing of collections while saving the provider a significant amount of money by charging a fixed monthly billing fee that was less than the cost of a single FTE. By 2008, the provider had the systems in place to bill Medicare in-house and we helped the provider with a smooth transition and we continue to provide cost report preparation and reimbursement consulting services to the skilled nursing facility. TFG Consulting currently provides comprehensive billing services to 4 hospitals (IPF, LTCH, IRF, and Acute). Our billing division began in 2002 as a result of our efforts to meet the needs of this non-profit nursing home.