Oncology & Hematology Coding Alert

Spot and stop hidden billing problems by tracking this number.

You might be used to scoping out monthly financial reports like balance sheets and cash flow statements, but those aren't all you should be looking at, according to Ricky Newton, CPA, director of Cancer Specialists of Tidewater, Ltd. and director of financial services and operations and treasurer for Community Oncology Alliance.

If it's not already a part of your monthly financial review, start running your collections percentage. "The hospital doesn't look at this but I do every single month," he says.

Here's why: Your collections percentage is "something that is important that normally wouldn't look to seem important," Newton relates. The reason? It's easy to overlook, but even the tiniest change in this number can alert you that something is "off" in your billing department.

Bright Idea: Rather than focusing on what the number actually is, pay attention to how much it changes. This number should change by only 0.01 percent or less from month to month, advises Newton. If that seems like a small amount, it is. But if it changes by much more than that, you know something is off.

At the November 2017 Oncology Reimbursement Meeting of the Association of Community Cancer Centers in Richmond, Virginia, Newton told a story about a colleague who noticed a 1 percent change in his collections percentage one month. "I would have a heart attack if this happened," he jokes. To put this in perspective, at Newton's hospital, $1 million of adjustments difference between one month and the next caused the collections percentage to change by only 0.62 percent. If you run a smaller practice or facility, your expected level of fluctuation would be different.

Several types of problems could cause your collections percentage to fluctuate more than normal. Newton shared another story about a model member of his billing staff, one who had the cleanest A/R in his entire billing department. She never had accounts that were more than 90 days out, he relates. One month, he noticed her collections percentage had fluctuated outside the norm.

"This tells me at a high level if I have a problem in my billing department," he explains. When he dug deeper, he found that the "model employee" was writing off thousands of dollars of charges each month. Instead of following up on old A/R, she was writing those amounts off as bad debt to keep her report clean.