The little things that boost big payoff in paid receivables

It's funny to me — in so many aspects of life, people love to talk about "the little things" and how "it's the little things that really matter," but it seems these are the first things people will dismiss, forget about or flat out toss through a window. The thing is, what people say is true.

It is the little things that matter, especially when you're looking for success in a hospital or surgery center's accounts receivable (A/R) department.

Within the realm of healthcare A/R, managing the little things is about keeping yourself, your team and your facility one (or several) steps ahead of bad debt disaster. Usually that means minding the foundation on which your team is built—think about training, coaching and continuing education—and ensuring that everyone is following the same protocols and procedures.

Here are some key focal points to keep in mind as you consider your facility's overall financial health and how to best impact your bottom line. First we'll focus on what I call the basics, and then we'll shift to look at best practices related to the 120+ day bucket; looking at overdue accounts is an area that generally says a lot about what you're doing right, and what you need to be doing differently.

Set Yourself Up to Be Paid: Verify, Optimize and Always Follow Up
A short, simple article regarding A/R management recently appeared on the Tricom Funding website; its opening line caught my attention. "Paid receivables are the lifeblood of your business." This is absolutely true of your facility. Healthcare is a business, and you can't afford to offer service for free.

With that in mind, know that consistent A/R success begins with a solid foundation and, in my opinion, a solid foundation starts by following these five key principles.

1.    Verify insurance every single time.

If you're consulting with a patient in office or scheduling a future procedure, take advantage of the opportunity to collect and verify the patient's insurance. Failing to verify insurance can be costly in a number of ways, but what's most notable is that it can lead to payment delays, loss of funds or claim denials.

What makes insurance verification so important is that it tells you up front what a patient's financial obligations and capabilities might be, not to mention it tells you whether the patient has bothered to keep up with insurance at all. The insurance verification process will tell you things like whether the insured has switched jobs, failed to make COBRA payments, moved out of state or dropped insurance altogether.

Remember your goal throughout the billing and claims process is to stay one step ahead so, in the end, you've set yourself up for easy claims and timely payment. Collecting and verifying information up front, before any services are rendered, is always step one.

2.    Ask for payment on or before the date of service.

This is a subject that in2itive Business Solutions has highlighted over and over again in recent months, thanks largely to the high deductible health plans that are gaining impressive popularity. Early last year, there were almost 17 million healthcare consumers enrolled in high deductible health plans, compared to only a million in 2005. The number of enrollees is expected to rise yet again in 2014, as more employers offer this option, sometimes exclusively.

But why does that matter to hospitals or ASCs? And why does it increase the urgency to secure patient payment up front? With lower deductible health plans — those that have been the cornerstone of employer sponsored health insurance for decades — facilities could count on the insurance company to cover as much as 90% of all service costs, which made the patient's portion less of a concern. By contrast, with high deductible plans, it's the patient who is responsible for approximately 40% of the bill.

Furthermore, in the case of ASCs, you're offering elective procedures. If a patient is scheduled for a knee arthroscopy because they're in pain, they're more inclined to pay before service is rendered. If you don't push for payment until after the procedure — when the patient is no longer in pain — the likelihood of being paid on time is slim.

3.    Be timely and accurate when filing claims.

I recently gave a presentation that included PowerPoint slides. When the time came to discuss filing claims, I shared a slide that included only two things: a picture of Snoop Dogg (who goes by some other name these days) and the phrase "Drop it like it's hot." And that's exactly what you do.

Your facility should drop all new claims within 48 hours. Don't be one of those places that waits three or four days — when you're dealing with insurance, money and billing, time is of the essence.

If you're committed to dropping all claims within 48 hours, you'll benefit in one of two ways. The first is obvious: the sooner a claim goes out, the sooner your facility can expect payment. On the flip side of that, if your facility is quick to file claims, you'll be more quickly alerted to there being any issues or errors; by filing within 48 hours, you've created a bit of proverbial padding that lets you make any necessary corrections and then resubmit without timely filing risks.

Every facility's ultimate goal should be to have all accounts paid within 30 days of the date of service. The only way to ensure that happens is to file claims quickly and accurately.  

4.    Double check that you're following optimized coding.

Coding is a terribly complex aspect of healthcare billing, and it's further complicated by the fact that there are so many options in how to code and different ideas regarding what's "right." Still, there's plenty your team can do to make sure their coding habits are consistent and generate the highest reimbursement for your facility.

First thing's first here, and that's just using the highest reimbursable code. Code modifiers can make a huge difference in this regard and are actually being used more frequently thanks to changes in Medicare regulations; correct use of modifiers will not only ensure maximum reimbursement, it helps guarantee that your facility avoids fraud and non-compliance issues.

Beyond thorough knowledge of the coding system, facilities can help keep themselves in check by scheduling routine audits at least once a year. in2itive's suggestion is that you set a compliance goal before every planned audit and then evaluate your intended performance against your actual—the variances will help you determine whether anything is off (and if so, what).

A last word on coding tends to be the most difficult for people to hear: be open to alternate ideas. The challenging part of coding is that it's not black and white and there's always room for discrepancy. Coders are generally wise to take an outside perspective seriously when it comes to evaluating their coding performance; one person may catch a glaring error in what somebody else has spent too much time staring at.

5.    Follow up in a timely manner and just communicate clearly.

Everyone knows that communication is key, but it's only effective if it's timely and targeted.

One of the biggest shortcomings in billing communications concerns billers communicating with surgeons or those performing a procedure. The truth is, only those in the OR or procedure room know what was done, what was used and what you should be billing. Always communicate with your facility's surgeons and physicians to ensure that what's being described in your bill or claim is an honest reflection of what was done.

Beyond the clinical staff, make sure that all parts of your team are communicating with each other. Medical billing and A/R management requires a lot of moving parts—keep every one of them aligned and in check.

Managing the Future: Mind the 120+ Day Bucket
That brings us to overdue accounts. The 120+ day bucket is a topic all its own, and it's one that every hospital and ASC has to master in order to be consistently successful and ahead of bad debt. But don't think that a balance older than 120 days is "bad debt" — it's just a debt you haven't collected yet.

Keep a cleaner A/R, and a more robust bottom line, with these three tips on collecting overdue balances.  

1.    Investigate everything that's out of date.

Outdated balances generally suggest that there's something wrong with the claim that was filed. It's your job to find out what. Was it human error that can be identified and corrected for the future? Did a mailing become lost somewhere along the line, maybe because of an incorrect patient address?

Generally speaking, it's in your best interest to hand investigative efforts over to an experienced collector who has the patience and experience to know where to go for answers, who understands the billing cycle start to finish and who has the perseverance to go through more paper stacks than most of us would ever consider reasonable.

Some may try to convince you that an account is not worth the involvement of a collections agency, but the truth is, your facility cannot afford to offer free service and your billing team can't afford to spend all their time working overdue accounts; collections groups have a purpose and a place and your facility could be well served by employing such a service.

Bear this in mind: Even if you have to pay someone 50 percent of the collections, 50 percent is better than nothing — don't write these things off. in2itive Business Solutions has a 99 percent receivable average, and plenty of what's been brought to us has been overdue and outdated accounts. We know nothing is over until it's over, and we know that the majority of accounts can always be settled.

2.    Work through old claims and operate on what you know, not how you feel.

Start with an aging report, since that will show you what invoices are in process or outstanding, their amount and their number of days in process or past due; subsequently, this is your best indicator regarding which accounts need quick attention. You can also use reports like this to track any trends that relate to specific carriers or high-dollar claims.  From there, take a look at whether there are any state or payor-specific requirements that may affect a specific geographic area — this can inform whether your claim has failed to comply with those requirements.

Once you've determined any relevant trends or facility-specific data, it's time to just do some detail work on the original claim. Review all details associated with the claim and research the path it's taken. Is anything incorrect? Did the claim itself get stuck in the process somewhere and was never finalized? Make any corrections that you deem appropriate or necessary, and then resubmit the claim or, if applicable, file an appeal.

Most importantly, make sure to research and find concrete answers for every question that arises on a claim—don't assume you know what path the claim took, what error has held it up or why it's been left unpaid. Communicate with the appropriate parties, do your due diligence and operate on what you know.

3.    Stay determined and keep a keen eye on contract language.

As you work through the collections process, you'll eventually want to narrow your focus to those accounts that carry the highest dollar amount; you can really get more bang for your buck when you work this way.

Contract language is another important element that requires close attention. Make sure you and your collector are paying keen attention to whether there are details missing or information listed incorrectly and then note whether the error is on multiple claims. In this case, it's in your best interest to contact an insurance representative and ask for a review process on all claims with the same error.

Taking this "short cut" may make it possible for you to process multiple claims at once.

Also, just to reiterate an earlier point about filing claims in a timely manner, make sure to check contract language for any details regarding a "timely filing clause"; this will tell you if a carrier requires that claims be filed within a specified time period.  

Keep A Step Ahead & You'll Never Fall Behind

In most aspects of life, the easiest way to ensure that you never fall behind is to always stay one step ahead. That's exactly what you need to be doing as a medical biller. Laying a simple but sound foundation — one built on the key points laid out for you here — gives you and your business team a platform for ongoing A/R success.

Even if your business office is already finding itself a bit behind, the same principles can help you get back out in front. But if the 120+ day stack is burying you, and your team just can't seem to pull ahead, remember that this is a business in which outside help is always available and very often warranted. Consider working with a revenue cycle management company like in2itive Business Solutions; we've helped clients just like you collect more than $384 million in revenue, and we've done it by adhering to the principles we've shared here.

Regardless, know that if you're not growing, you're dying, and paid receivables really are the lifeblood of your business.

This article is sponsored by in2itive Business Solutions.

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