Published - December 2001

By Dave Jakielo


It is hard to believe that another year has gone by, it sure rings true that the older one gets the quicker time passes. This year is like no other known to us in the United States. The events of September forever changed the way we look at everything. The past, present and the future have been altered forever. However, time marches on in our industry as well as others and we must carry on.

Let's take a look back at some of the realities that healthcare and the billing industry have had to face in 2001.

In parts of the country we have seen Third Party Payers go bankrupt and our client's have had to absorb losses in the 10's of thousands. Plus we may have lost our management fees. In future contracts please protect yourself by including verbiage of how you can recover your cost when this occurs.

Physicians are continuing to abandon the practice of medicine and opting for new careers in business, law, Krispy Kream franchises etc.

Reimbursements have continued to decline, possibly affecting our management fees. This is why blended rates are getting popular.

We are increasingly faced with Insurers refusing to pay certain procedures claiming they are an integral part of a visit code.

Some billing companies have been contemplating a merger, not that this would ever work. The only way two-merged billing companies can survive is if one of the owners retires.

Postage rates have risen for mail weighing 2 ounces and above. Please when quoting your management fee NEVER include postage as part of the management fee.

The number of claim denials we receive are at an all time high. The worst part is that most of the denials are bogus. They are occurring because third parties are banking on us not following them up.

Non-responses from third parties on submitted claims are increasing. They have this trick of sending the subscriber a letter asking about Coordination of Benefits. The letter asks the subscriber to indicate that they are not covered by another insurance. However, if the third party doesn't receive the letter back from the subscriber they just sit on the claim. The claim won't be paid nor will you receive a denial.

The above are just of the few issue we have had to deal with this past year and these events are causing us to have to reexamine our business practices. Running our business continues to become more complex and expensive with every passing month.

Enough of living in the past. Here are some of the facts, predictions and remedies for the year 2002.

The Postal Service has already filed for a rate increase for first class mail to 37 cents. Rumor has it that it may even go higher, possibly as high as 50 cents, to compensate for the events of this past September.

The 2002 Medicare conversion factor is 5.8% lower than 2001 plus there are other adjustments in the work, practice expense and malpractice values depending on specialty. Whenever our clients face a reduction in income, many times they look towards us to lower our fee to help offset their loss. If you keep reducing your fee one of two things will happen; You'll go out of business or you will end up with a new hobby called the billing business.

HIPAA will not only be challenging but will lead to an increase in costs.

The acquisition marketplace will heat up and selling you company may once again be an option. Remember everyone needs an EXIT STRATEGY, unless you plan on working in your company until you drop dead. Keep in mind if you wait until you need to sell your company the buyer will control the price.

The downturn in the economy will have a few bright spots. Certain areas of the country should be able to recruit qualified employees and employee turnover rates will decline. Because of the strong economy of the past few years, many of us have employees who are in the wrong place at the wrong time.

What intrigues me most about our industry is the fact that no matter what challenges we face, we all still LOVE THIS BUSINESS.

Happy Holidays to you and yours!!!

Keep in mind I'll be happy to address any issue of importance to you. So keep your questions and suggestions coming. Send inquires to any of the following. David Jakielo, Seminars, Training & Consulting, 86 Hall Ave. Pittsburgh PA 15205., 412-921-0976 or visit my web page at

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