Revenue Cycle Management – Best Practices to Collect Your Accounts Receivable

Revenue Cycle Management
Best Practices to Collect Your Accounts Receivable

Efficient billing and collections in your accounts receivable are critical to the success and profitability of your practice, and any efforts you make to improve efficiency can help you better capture money you earn and avoid your leaving money on the table. Below are 10 benchmarks to target for your operations and then offer 10 best practices to make meeting these benchmarks a reality.

Benchmarks

Use the following 10 benchmarks as good targets to consider for your practice.

  1. Days in A/R. 20 to 35 days for practices conducting mostly electronic billing, which includes submitting electronic patient statements.
  2. Insurance verification.  Completed within three to five days before the date of service. You don’t always get an authorization at the moment when you make that call but as soon as insurance verification is completed, you need to turn around and call patients to notify them of their responsibilities, at least three to five days prior to their date of service.
  3. Transcription.  Completed within 24 hours or less after the patient visit.
  4. Coding.  Completed within 48 hours or less. The claim should also go out the door the same day the case is coded and charged.
  5. Claims billed out.  Completed within 24 to 72 hours from date of service with the higher-end target to account for possible delays caused by issues such as time needed to resolve any discrepancies concerning procedure information or slow dictation from doctors, but 72 hours should be the exception and not the rule. You may want to consider a more aggressive benchmark — with the understanding that occasional issues will hold up the process — and target to have claims sent out within 24 hours.
  6. Claims follow-up.  Completed within 28 days for those that remain unpaid. All claims need to be touched, again, at least every 28 days until the claim is resolved. For practices filing mostly electronic claims, you may want to keep that benchmark lower. If you know you’re getting paid every ten days from a payor, then you should have a 15-day review if you haven’t received payment.
  7. Denial rate.  1 to 2 percent. Tracking the reason you are not getting paid the first time a claim is billed is very important, you need to identify the reason for denial and fix whatever the problem might be so that future claims will be paid the first time you bill, which will reduce the expense associated with claim filing and give you access to your cash that can be used for other expenses.
  8. Accounts per collector.  When reviewing your outstanding A/R, you should have one biller assigned per every 800 accounts, with the business office manager monitoring the collection activity closely to ensure accounts are being worked at a minimum of every 15 to 30 days. If your practice has 2,400 outstanding accounts, and a biller can only follow up on about 800 accounts per month or 40 accounts per day you would need three billers to work through the entire receivable in one month.
  9. Cash collections as a percent of net revenue.  At a minimum, the collection goal should be 100 percent of your monthly average net revenue for the preceding three months. Track and trend this goal monthly, and if you are short in your overall collections for the month, the collection shortfall should be added into the next month’s collection goal.
  10. Aged A/R greater than 60 days and aged A/R greater than 120 days.  Less than 25 percent of your A/R should be in the 60-day bucket and less than 10 percent in the 120-day bucket.

Best Practices

Here are 10 best practices you can use to help meet your benchmarks and improve your overall efficiency.

  1. Post your targets. A terrific motivator for staff members is to put their goals on display and reward them when meet or beating the targets.  Post goals and targets for the employees in your office such as monthly cash collections goal; front-end collections goal (percentage) and business office goals. If the staff meets the goal, reward them.
  2. Post your figures. A different approach you can take is to display the actual figures associated with your day’s work. You can track your reimbursement on a dry-erase board in the business office area so each day you see how many cases you’ve performed, how much in collections was received and how many days out you are, which is recalculated every day.
  3. Conduct a “core audit.” If a high percentage of your A/R is falling in the 90-day and over range, consider performing a comprehensive review of what your revenue cycle, starting from beginning of the billing and collections process (scheduling) to the end (completing the medical record).
  4. Instruct coders to code everything. To help ensure reimbursement isn’t left on the table, consider instructing your coders to code out everything in the operative note and there are no bundling issues. Billers need to go through what is and is not billable. This way they cannot miss any codes that may have been added to the approved list.
  5. Pay close attention to secondary payors. For those cases which you are filing claims with secondary payors, it is important that your business office staff pays close attention to secondary payors’ rules and understands what they will pay you for or you could miss out on reimbursement opportunities. Encourage your biller to take a little more time to work with the secondary payor even before sending out the claim for the primary payor. This will help ensure your biller understands what it is your organization needs to do to receive complete payment from the secondary payor. You may need to attach the primary payor’s explanation of benefits to the claim you file with the secondary payor to prove what procedures the primary payor covered and what it did not.  While such caution may mean that claims take a little longer to go out the door, if the benefits mean that you capture a few thousand more dollars, the delay will justify itself.
  6. Identify barriers preventing efficient physician dictation. A common issue that can hold up the billing process is slow physician dictation. If this is the case, you should work to identify the cause and see what you can do to assist the physician in completing dictation in a more timely manner.
  7. Be careful not to blindly rely on the clearinghouse’s messages. The relationship between your software (and its vendor), your clearinghouse and the payors is a constant challenge with frequent finger-pointing and passing blame. Your software vendor and clearinghouse should have a good working relationship. The billing software should have batch reports that easily match uploaded batches in the clearinghouse reporting system.  There are numerous reasons given for claims going into the black hole and you have to stay on top of the process. Don’t assume that just because it is billed and shows ‘accepted’ by the payor with your clearinghouse that this means it is processing. Payors do not have standardized acceptance reports; every report looks different and often times doesn’t explain rejections. If one small thing changes in the way the practice submits the claim or the way the payor receives it, the claim seems to fall through the cracks during claim submission.  Make sure that any change is communicated to the clearinghouse so they can properly set up and process the claims. Dedicate a full-time staff member who does nothing but works as the liaison between the practice software, clearinghouse, and payors.
  8. Hold collectors accountable. With your collectors juggling many accounts, it can be easy for mistakes to occur. While the occasional error may not significantly harm your practice, if it happens repeatedly and is not detected for a significant amount of time, the impact could be tremendous. Besides some of the methods intended to catch problems already described, consider ways to hold your staff members accountable and carefully monitor their work.  The collections process should be very structured and you have to assign accountability to the individual that’s doing it. You need to do checks and balances and make sure that person is actually doing what they’re supposed to be doing. Monitor your billers on a daily basis.  At the end of each day review what was collected during the day. Through this process, any mistakes are caught and fixed sooner and are less likely to be repeated the following day.
  9. Cut down time spent on appeals by documenting payor rules.  Payors may not be willing to share their rules or your questions about policies go unanswered or are answered incompletely. If you do not have a clear understanding of a payor’s rules, this can lead to significant — and potentially fruitless — time spent appealing rejected claims. Since the payors won’t always help you out, you need to help yourself.
  10. The sooner patients receive the bill, the better your chances of getting paid. When a procedure is complete, the first thing an office normally does is submit its claim to the insurance company as quickly as possible. Once the insurance company processes the claim, the EOB is sent to the medical practice and a copy goes to the patient. The patient likely opens the EOB, looks over it briefly, files it away, and doesn’t think about it again.  Why is this a problem? Let’s say your office sends patient statements on the 15th of each month and patients received their EOBs from their insurance companies on the 20th of the previous month. This means nearly 25 days passed between patients seeing the initial EOB from the insurance company and the day they received your statement. They are not likely to remember the EOB they looked at almost a month ago that showed the insurance company paid less than the original estimate.  Since patients will not associate your statement bill with their procedure or exam performed months ago, they will be less inclined to pay the bill for something that has become a distant memory. If you want to increase the likelihood of patients paying their bills, you must send the request for payment as soon as possible, preferably right after the procedure is complete and the EOB has been received. People are more likely to pay their bills when they can remember what they received in exchange for their money.

CPA Solutions focuses on these critical steps to ensure your practice is maximizing profits and efficiencies.  If you would like for us to give your practice a complimentary analysis on what we can do for you, please give us a call at 407.650.9088 or e-mail Info@ClientAccoutningService.com.

 

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