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Decreasing Average Days in A/R From 100 to 35: Thoughts From Becky Ziegler-Otis

Becky Ziegler Otis, RHIA, CPHQ, CHC, administrator of the Ambulatory Surgical Center of Stevens Point (Wis.), discusses how her surgery center decreased days in A/R from around 100 to the industry benchmark of 35-40.

Reasons for High Days in A/R


At its worst, the center's A/R topped out around 100 days, Ms. Ziegler-Otis says. She cites several causes:

1. Claims not submitted on a timely basis. Ms. Ziegler-Otis says her ASC frequently submitted claims late because the center lacked adequate business staff to move through claims quickly. "We don't have a lot of non-clinical space — I'm physically located in the pre-op room as the administrator — so we don't have a lot of room for employed billing staff," she says. When claims were not submitted in a timely fashion, payors could deny them without giving the ASC adequate time for an appeals process. This meant the ASC lost money that would have gone straight to revenue if the claims had been filed on time.

2. Lack of knowledgeable staff. Ms. Ziegler-Otis says the staff who were originally responsible for billing were not experienced in ASC revenue cycle issues. "At the time, our billing was done by a clinic, and the clinic staff weren't trained in the specifics of ASC billing," she says. The clinic had separate policies around timeliness of claims submission, and the ASC suffered because clinic staff did not always submit ASC claims on time.

3. Inconsistent payment policies. Ms. Ziegler-Otis says some other facilities in her community have adopted a more lax policy around patient payment. "They pretty much just accept what the patient says about when they want to make payments and how much they want to pay," she says. Because this attitude was the norm in her community, the ASC did not have a firm payment policy and allowed patients to drag out payment plans over months and months.

How to Decrease Days in A/R

1. Consider outsourcing billing. Ms. Ziegler-Otis decided to outsource billing at her ASC because the surgery center was not large enough to accommodate full-time billing staff. She wanted a company that had experience with ASCs, rather than a company that concentrated primarily on physician offices and worked with ASCs on the side. She says she "did her homework" when selecting a billing company by calling references and asking pointed questions about their experience with the company.

"I'd ask questions like, 'How long did it take you to get your A/R flowing again?' and, 'How helpful are they with understanding compliance issues?'" she says. "I didn't want someone to just do the billing and get the money in. I wanted them to understand compliance and auditing policies as well." She says she also looked for an experienced company rather than a start-up.

2. Keep in touch with your billing company. Just because you outsource billing to another company doesn't mean you should forget about billing altogether, Ms. Ziegler-Otis says. She keeps in touch with the billers at the company and talks to the self-pay biller and the person who posts the payments at least 2-3 times per week. "I also keep a close eye on our contracts," she says. "Our insurance carrier will stop paying for implants at a moment's notice, so we have to intervene and call to make sure things aren't escalating."  

3. Institute a firm policy around patient payment plans. Ms. Ziegler-Otis says the center's days in A/R were initially high because the center did not enforce patient payment policies. While the outsourced billing company is responsible for submitting claims on time, Ms. Ziegler-Otis has tasked her staff members with explaining payment policies to patients. "We've been very clear up front with patients," she says. "They sign a financial acknowledgement that we expect payment in full within three subsequent months, and if they can't do that, they need to set up a payment plan."

If the patient chooses to set up a payment plan, she monitors when the first payment is received. If the payment is inadequate, she sends an "inadequate payment plan letter" to inform the patient that the received payment is not acceptable. She also tries to work with patients in financial difficulty by offering three-, six- and 12-month payment plans or offering financial assistance.

4. Speak with patients about expected payments prior to service. Ms. Ziegler-Otis' insurance verifier makes a note when patients have an insurance plan with a high deductible. Another staff member then sees the note in the system and calls the patient to let them know the bill could be reasonably high. "We frame it as a courtesy call by saying, 'We noticed you have high-deductible insurance, and we wanted to let you know that the bill could be around this much,'" she says. "I try to ballpark about how much I think they will owe." She says this conversation helps to decrease A/R by making patients aware of their financial obligations.

5. Keep an eye on A/R over 120 days. Ms. Ziegler-Otis says while her center's average days in A/R has dropped from around 100 days to 35-40 days, she still keeps an eye on accounts that go over the 120-day mark. "The longer it takes to get that money, the more you may not ever get it," she says.

She says the two biggest causes of A/R over 120 days are long-term patient payment plans and unresponsive insurance companies. In either case, the ASC needs to work with patients or the outsourced billing company to track these problem accounts and make sure the patient or payor has a timeline for submitting payment. "You have to stay on top of insurance companies and address denials right away," she says.

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