The term ‘Accounts Receivable’, or A/R refers to the money owed by payers, patients, or other guarantors to the practice, for services rendered and billed to them. An increase in A/R typically signifies troubles on the cash flows of the practice. Benchmark the A/R objectives to ensure that money flows accurately and in a timely manner.
Tips on improving average days in A/R:
It’s imperative to understand the claim filing rules of payers individually. Medicare reimburses within two weeks of receiving clean claims. However, if there are denials or delays occurring which are especially taking more than 30 days, it is essential to figure out the reasons which could be related to coding errors (reason codes), data entry errors, posting errors, etc. Only then will the denials and delays be reduced from 60, 90, or 120 days.
Again, catch the potential denials even before they occur. This aids in improving billing efficiency. Usage of billing software tends to catch claims that could have been denied. This software should be able to catch other practices’ claims (from the vendor’s network) that have been denied so that your practice can prevent similar denials. This can increase the first pass resolution rate (FPRR) from 70% to 97% and increase collections speedily. Again, staff load gets reduced as they tend to spend lesser time reviewing denials and more time on helping patients.
It is advised to engage a clearinghouse, or a local representative (maybe from the insurance organization), who can assist in resolving problems at a quicker pace.
3. Review cycle and workflow:
Review the A/R processes at least twice a year, if not more. Accept ERA’s from insurance companies and ensure payments happen as per contracts. Through automatic email generation, the staff and management must be notified of pending jobs and share detailed reports ensuring high productivity. Through automated systems, practices can improve their DSO (day’s sales outstanding) figures, post the lost or ignored claims and follow up on late payments.
It is advisable to collect a 100% co-pay amount from patients at the time of service being rendered to avoid delayed or denied payments. Further, with deductibles, etc. tighten the policy further by sending three statements, followed by another 15 days provision which again if not paid, must go directly to a collections agent. However the payment policies must be updated on websites, automatic payments must link to credit/debit cards, deposits must be collected in addition to insurance co-pay, offer multiple payment options, repayment options provided, and financial counselor’s support must be provided to the patient if required.
As payers provide estimation tools for services, the patient’s financial obligations can be calculated. The staff must be well-trained and educated in such tools and technologies, which can assist patients and discuss the options, as well as their current account balance reports to enhance profit margins. This also improves the past due ratios.
6. Verify demographics:
Apart from ensuring that all demographics are complete and accurate, it helps to check insurance details prior to the services rendered, and inform the patient of the co-pays and/or deductibles due.
7. Batch eligibility system:
Remember to run a report through this system two days prior to the patient’s appointment. It displays any errors in the data, undetected gaps, current insurance coverage, and eligibility status and ensures prompt service and payments.
8. Weekly bills:
Send weekly bills to patients and insurance payers as soon as it is generated/services are rendered.
9. Certified coders:
These coders are knowledgeable in ICD-10 and CPT codes, and their knowledge can be best put to use before claim filing. They also assist physicians in the documentation required as these are payer-specific requirements. They are aware of the industry trends and regulations and can be of help in answering patients’ queries regarding co-pays and deductibles.
10. Data representation:
Track the trends as an overall average A/R or by each payer. If it is a constant issue with one payer, address that directly. Calculate the A/R days with/without collection details. Monitor the statistics on the number of A/R days separately.
It is best to increase workflow efficiency by breaking down tasks one at a time and review them accordingly. Work on skill-based routing and queue up tasks to be completed quickly. While monitoring data, compare it to the previous months/years data. Practices must aggressively follow a 90% target rate (A/R cycle) to accrue timely and accurate cash flows. Strive for continuous enhancement.