One of the most common questions that I am asked in my consulting practice and at my chiropractic billing, coding and documentation seminars is this:
“What is the best way to manage accounts receivable?”
Unfortunately, there is no simple answer to this problem which afflicts offices of all sizes. In today’s ever-changing world of coding, compliance and new payor products, we can find ourselves with thousands, if not tens of thousands of uncollected revenue. Although, lack of follow-up and incorrectly posted payor discounts are the two biggest reasons for lost revenue and high A/R, there are a multitude of contributors.
So how do we increase revenue and manage A/R successfully? Here are a few suggestions to get and stay on track:
1) Submit accurate claims — Submit your claims in a timely fashion, but more importantly send them accurately and send electronically whenever possible. The average turn-around time for electronic claims is only 14 days. Most payors average 31 days for paper claims. Sending claims accurately will minimize your A/R and provide a timely reimbursement.
2) Use Claim Tracking Tools — If you have system tools to track the accuracy of your claims, use them. They will catch most errors before the clearinghouse receives your claim and bills for the transaction. One of my favorite features is validation.The validation tool is a real timesaver and one of the best software functions you can use to control your A/R. If you have it, use it, it will save you time and money! Validation sends edits back to you from the specific payor; allowing you to make corrections and re-submit your claims without paying an additional clearinghouse fee. Whether you have a validation tool or not, take the time necessary to verify what you are sending is correct; five or ten extra minutes on the front-end can save you an hour or more on the back-end!
3) Exclusion Reports — If your billing system does not have a validation tool, you can verify the accuracy of your electronic claims by viewing the clearinghouse exclusion report. These reports are available from your clearinghouse and they provide direct responses from the payers. The edits are very similar to the validation edits, allowing you to make accurate and timely corrections and resubmit your claim. If your billing department studies these reports, they can quickly spot trends in why your claims are being denied – and more importantly, fix them!
4) Count Down to Payment — You have all submitted claims and called the payor after 15-30 days, only to be told the claim is not on file (NOF). There is nothing more frustrating. After working on both sides of the fence (insurance co vs doctor) for over a decade, I can tell you firsthand that there is a plethora of things that can go wrong on the payer’s side that we doctors have no control over. Even with confirmation receipts, you are in a losing battle. Remember, the clock is ticking. Verify the claim is on file. If sent electronically check claims in 5-10 days. Utilize their websites and any other resources you may have. With the claim at the payor, we can count down to the anticipated payment date; 15-20 days for electronic claims and 30-45 days for Federal claims. Begin checking your payments, utilize electronic remittance advice (ERA) first and every day, then begin utilizing the websites and payor automation and post your payments. Using your ERA reports is accepted documentation for secondary payors and secondary claim should be submitted immediate after the ERA is received and posted. Unfortunately, website confirmation of payment is not. Claims with secondary payors will have to wait for snail mail, so organize accordingly so you are ready to forward to the secondary as soon as your explanation of benefit (EOB) is received.
5) Post accurate payments — Payers also make over 30% of claim errors every year. Most have gone to an automation system, but they are continuously working out the kinks. It is up to you to make sure the allowed amounts on each EOB/ERA is correct. Having an updated fee schedule will allow you post payments with confidence and identify those payments that are paid incorrectly and follow-up in a timely manner.
6) Beware of Auto-posting – I have a love/hate relationship with auto-applied postings only because it really caused us huge issues when we began to use it. Auto-posting is a feature offered by some software vendors; however, the auto-posting comes from the individual payors and each with their own reason codes and peculiarities. The problems I found lie in the inability to verify correct payments and discounts and it makes it difficult to find and submit secondary claims. If you use auto-posting, beware of these issues. Visit their websites and review IT updates for auto-apply. Sometimes, this can be a wonderful tool to save time, but you must be aware of its limitations.
7) Aging Goals — Outside of Personal Injury claims (which should be secured by liens) the vast majority of your A/R should be less than 30 days old. Depending on the type of practice you run, there are acceptable percentages of A/R aging for older accounts, but in no way should you ever lose track of these numbers and let your A/R balloon. I have literally seen practices doing $30K per month in services with an A/R of $200,000 and patients with bigger practices with A/R of over $1 Million! Quite simply, it is not profitable to operate your practice with a bulging A/R. You would be better off to assign a staff member or outsource the task until you can get it under control.
8) Appeals — Even the cleanest of all claims occasionally get denied for one reason or another. A coordinated effort on the part of your billing department and the doctor is to handle these appeals and getting a quick resolution can be tedious but necessary. The best advice I can give you would be always document your claims. Document the date received and any action you have made with your claims. This information is extremely helpful when trying to resolve a pended or denied claim issue. Then, if you determine that the claim was denied for no good reason, you need to wage an appeal promptly. Remember, insurance companies process about 30% of all claims in error. That means some of those are going to be an error in their favor. In other words, they kept your money even though you deserved it!
9) Know Your Limits! — You (and/or your staff) should know how many claims your in-house billing department can handle per hr/day accurately and staff appropriately for your volumes and follow-up. Understanding your lost revenue in real dollars will help determine if additional staff or transferring staff is appropriate for your budget. In fact, it may be more cost effective to outsource billing or to have an outsourced company chase down old Accounts Receivable for you (Note: I do NOT recommend using a collection agency to replace deficiencies of your billing service or staff. That is one fast way to chase away your patients!). Having a competent billing staff — that not only is attentive to outgoing billings but follow up as well — is critical to full reimbursement.
Action Steps
If this article has stirred up some trouble in your gut because you know your collections, A/R or denials are a mess, it may be time to learn some better strategies at one of our upcoming chiropractic billing, coding and documentation seminars where we teach you advanced tips and tools to get your A/R tiger under control and much, much more!
