New Year’s Resolution: Cleaning up your A/R

When you run your December 2015 billing reports, take a close look at your A/R aging report to determine the amount of unpaid money in the 120+ day buckets. How does the percentage of this old A/R compare to the total A/R? In an ideal world, the percentage would be zero, but we don’t work and live in that ideal world. The reality is more than likely your 120+ days in A/R is between 15% to 20%, and hopefully not greater than this percentage. Once your review the A/R report, maybe it’s time to have your billing staff focus on working the old A/R to either get it paid, write it off, or send it to a collection agency?

The first step is to run an A/R Aging report from your practice management system to determine who is responsible for the 120+ days in A/R. Is it the insurance payer or the patient’s responsibility? You will want to make a plan for each type of payer.

• Insurance Payer: Run the Aging A/R by insurance payer. Determine where the most outstanding money is located. Review your participation agreement for each insurance payer to determine if you are within the timely refiling time period… if not, then consider writing off these accounts. Review the claim to determine the reason the claim was initially denied. If you didn’t have the proper authorization at time of treatment, then you more than likely will not be paid… this claim should be considered for writing off.

• Patient Responsibility: Run the Aging A/R by patient responsibility report. Determine if the patient is a recurring patient, or when the last time the patient was seen in the office. The front desk or billing staff should be reminding patients at the appointment reminder phone call that the patient has an outstanding balance. The staff should ask the patient for payment at this time by credit card. How often do you send statements? Do you have a policy regarding a patient making an appointment if they have an outstanding balance?

The next step would be making a plan to work the outstanding A/R. We have heard various methods from oldest to most recent, highest to lowest amount, alphabetically from A-Z or Z-A. No matter what your method, just continue to work you A/R consistently… daily would be great.

Consider running a claim denial report to determine trends. Some of the trends may be easy to fix, such as missing modifier, correct provider identified on the claim, or service is not medically necessary. Check the claim denial report to determine if trends are insurance payer specific. Maybe it’s time to call your Insurance Payer Claims Management Department to discuss why the denials are occurring? Once you have this information, talk with your staff to determine how to avoid these errors before the claim leaves the office for the clearinghouse.

When all efforts to collect outstanding balances have failed, it is time to consider writing off the account, or sending the account to a collection agency. Does your practice have an account write-off policy? Does the policy specify the amount the billing staff may write off according to protocol? Are amounts exceeding the protocol reviewed by the physicians prior to writing off the account or turning the account over to the collection agency? The physician may know information the billing staff may not. Perhaps a patient owes $150.00. The physician may have received three referrals from this patient which generated several hundred or thousands of dollars in revenue… it may not be prudent to send this patient to collections, but let the physician decide.

Since cleaning up your A/R was a New Year’s Resolution, continue running the A/R Aging report monthly and keep up the new habits. You will be surprised by how your outstanding A/R percentages will shift to the left. A “clean” A/R will give the practice a better picture of their financial health. So, take the time before January 2016 ends to review you A/R and do some cleaning up. It may be worth your time for a revenue cycle review to assess your entire process from the appointment being made to the claim being paid… or not being paid depending on the circumstances. If you don’t have time to conduct a revenue cycle review yourself, Concordis Practice Management is here to assist you.

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Sources:
http://www.physicianspractice.com/blog/eliminating-your-medical-practices-aging-accounts-receivable
http://www.physicianspractice.com/blog/keeping-your-medical-practice%e2%80%99s-accounts-receivable-track
http://practicemanagersolutions.com/working-ar-part-two/

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