Medicare Compliance & Reimbursement

With the pandemic wreaking havoc on both the healthcare industry and the economy, your practice may be working double time to collect every dollar. One way to boost your income is to refine your accounts receivable (A/R) process to bring in the money without a lot of extra effort.

Definition: Accounts receivable (A/R) is the money that is owed to the practice, said Scott Hudson, partner development manager with ECL, during the firm’s March 26 webinar, “Improving Your Practice’s Revenue Cycle Management.”

If you get too far behind in your collections, it could cost you time and money down the line, Hudson warned.

“Administrative costs are 30 percent of expenses in healthcare,” Hudson explained. In fact, he noted, administrative costs continue to rise, and billing-related costs rose 21 percent from 2009 to 2012.

Consider three quick tips to ensure that you keep collecting what your practice is due.

1. Track Each Claim You Submit

The first step in perfecting your A/R process is to make sure someone in your practice is paying attention to what happens to every claim you send out. Ask questions such as: “Did the insurance company even receive the claim?” and “Did the patient pay her copay portion of the bill?”

There are some practices that follow a “code it, bill it, and forget it” philosophy. They code the claim, they bill the claim, and then they forget about it, without following up to ensure that the money arrives.

Following up on your submitted claims early in the game can save you time. First, ensure that once your practice submits a claim that it is accepted. If the claim is rejected, the first order of business is to research why. Catching it in the initial submission phase saves you time in the long run and ultimately gets your money in the door faster.

Set a reminder: Try placing an event reminder on your digital calendar every week that reminds you to check all accounts receivable for the past 30 days. Print a report and go online or call to check claim statuses.

2. Pursue Unpaid and Denied Claims

Many practices have hidden money waiting to be discovered, which can often be found in the form of the following issues:

• Unpaid claims
• Claims paid incorrectly
• Denials not appealed or appealed incorrectly
• Denials appealed with no follow up

You should continually review and monitor your explanations of benefits (EOBs), paying special attention to your denials. You can glean a lot of information from your EOBs, such as how quickly insurers are paying you, whether your fee schedule is adequate, if your coders are coding properly, why insurance companies are denying your claims, and if you’re getting paid according to your contracted rates.

3. Measure and Manage Your A/R With Reporting

You can’t manage your A/R if you can’t measure it, so you need to produce a variety of reports to help you evaluate your A/R.

Tip: Invest in a good practice management system and learn all of its capabilities. Pay special attention to the reporting abilities of the system you use to be sure you get the data you need to manage your practice’s A/R, such as the practice’s gross collection rate, net collection rate, and average days in A/R for claims. You can then use this information to evaluate the effectiveness and efficiency of your practice’s A/R management.

Example: Days in A/R is a single number that tells you on average how long it takes you to get paid after you provide a service. Calculating your days in A/R is a useful process because you can benchmark the time it takes you to collect for services compared to other practices.

Watch for A/R “creep.” This is when your A/R goes up a little bit every month, but over time it goes up a lot.

Tally results: If you are aware of your average number of days in A/R, then you’ll be able to notice immediately if that number rises, rather than wondering whether it has gone up or down. An average number of days in A/R can be different for every business depending on the payer/ patient mix and your contracts. What’s important is that you track yours over time to see whether it’s improving or worsening. This allows you to determine whether you should stay the course with your current strategy or if you should change tactics.