5 A/R Management Problems That Hurt ASC Profitability
1. Not having an accurate picture of your A/R. Mr. Bulow says one of the most common problems he sees in surgery centers is a general failure to understand A/R. He says the best way to keep track of A/R is to make sure all your in-network contracts are loaded into your billing system and adjustments are recorded at the time of charge entry to give you an accurate picture net revenue when the claim is submitted. He says out-of-network is a little more difficult, but you can still estimate on an account-by-account basis. "Once you're comfortable that you have a good, true picture of what your A/R is, it's important to put your resources on the accounts with the biggest chance of payment," he says.
He says it's important to segment your A/R and assign separate people to self-pay, Medicare/Medicaid and commercial payors — or, if you only have one person available to do all three, to split up their time so the assignments are kept separate. He says it will probably be more lucrative to follow up on a delayed payment from a payor, for example, than to follow up on a self-pay account that has lapsed over 120 days.
2. Failing to follow up on self-pay accounts. Mr. Bulow says following up on self-pay accounts is essentially a "numbers game" — calling as many people as possible and assuming that a certain percentage will pick up and pay their bill. He says a large center should utilize a dialer just to handle self-pay accounts.
"It should be somebody's job to come to work in the late afternoon or early evening and make those phone calls," he says. "We have found that by making evening calls starting at 6 PM local time, we have doubled our collections rate." He points out that making calls to patients in the morning may be a waste of resources, since a lot of people will be at work. If you can afford it, ask someone to make a few hours of calls over the weekend to maximize the chance of a patient picking up.
3. Not understanding the reason for accounts not paid. Mr. Bulow says it's more common in the hospital industry to assign every unpaid account a "reason code," which indicates why the account hasn't been paid. "When we look at A/R reports, we look at payor, age and reason," he says. "From a 10,000 foot level, you might notice your Blue Cross A/R over 90 days is much higher than you expect it to be, and you can know without having to do a lot of account research why that is."
Reason codes can also help you understand problems that occur consistently over time. For example, you may have an issue in the billing office with staff not calling patients in a timely manner, or you may have a payor who regularly requests a piece of information you haven't sent. Reason codes can alert you to problems before denials affect your profitability.
4. Not following up with payors. "If there's a problem with delayed payments from a payor, it's usually that the provider hasn't followed up," Mr. Bulow says. The payor may require medical records, implant invoices or a certain type of code to process your claim. Mr. Bulow recommends keeping track of how long it generally takes each payor to pay, and then following up once that time period has passed.
"We have a specific matrix that says this Blue Cross sees payment within 12 days," he says. "If we haven't seen a payment, we make a phone call." This kind of matrix is important so that you concentrate your efforts on payors who should have paid already, rather than pestering payors who always take a long time to pay. For example, Mr. Bulow says some workers' comp can take around 90 days to reimburse a claim, so they shouldn't be called after 10.
5. Not instituting blanket requirements for patients based on payor needs. If one payor tells you they need a certain piece of information to process your claim, it helps to simply make that information a blanket requirement for all patients going forward, Mr. Bulow says.
"We have some states where you need patient consent to file an appeal, and we always get that patient consent at the time of service," he says. "If you end up needing to appeal, you don't have to go back to the patient to get something signed." He says every time the payor makes a request, his company simply adds another form for the patient to sign, so that payments aren't delayed because the business office is trying to track down a signature.
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