Get Accounts Receivable Ready for the New Year
By Karen Zupko
Like Scarlett O’Hara many hand surgeons, say “I’ll think about it tomorrow” when we bring up the issue of the troubles lurking on their accounts receivable reports. The time to think about the dollars marching toward the “120 Day” yard line is, you guessed it, now.
Here’s what you can and should do to discover the process errors that are creating receivables, to resolve old issues that allow current mistakes to go unnoticed, and to actually collect money that is owed to you by patients and plans.
-
Run the accounts receivable report several ways. Ask for a report that clearly shows what’s owed by plans and by the patient themselves. Next, run an AR summary report that shows what’s owed by each of your major payors—the Blues, Medicare, Comp, United, Cigna and Aetna. These dissections should prove revealing. We also strongly recommend that you ask staff to age the accounts in detail and not stop at the 120 bucket. There are a myriad of differences between a claim that is 120 days old and one that is 270 days old (typically these are reported to you in the same bucket). The devil, as they say, is in the details.
-
Start asking specific questions and indicate deadlines for answers. For example, ask why it is that 50% of your claims from Big Dog plan are in the over 90 days category when the contract says they will pay on a clean claim in 30 days. What could explain that? Find out if anyone has filed inquiries or appeals on the big dollar surgical claims. And, ask for status reports on those large unpaid Worker’s Comp claims. Is anyone keeping their eye on them? Inquire if patient statements are going out regularly if you note that a significant number of small balance patient claims are in the over 60 day plus aging area.
-
Run a small balance report. Consultants regularly find that practices lack a protocol and continue to send statements month after month for amounts less than $25.00. This makes no sense. Send two statements and then suspend billing. And, for your own good, provide your staff with feedback if co-pays aren’t being collected. No longer a measly $5, $10 or $15—co-pays in many areas are at $30, $40 and $50. Step up efforts here. We find many practices are strong in collecting for physician service co-pays but sloppy when it comes to collecting for the therapists.
-
Take write offs. Too many practices operate under foolishly optimistic assumptions and continue to bill patients for over a year. In fact, in one recent practice we reviewed, statements were being sent out to patients with no payments being made for over 24 month time periods. No phone calls from the patient explaining that there is a problem—nothing and the office made no move. If you have no stomach for using a third party collection service, (which we recommend by the way see #5.), direct your staff adjust off the amounts owed. Save on billing, improve your accounts receivable reports and resolve to never “go here” again.
-
Look into options offered by third parties. So many surgeons are stuck in thinking that all collection firms will automatically take 50% of what’s collected. First of all, it’s not true. But what if it was? You’d still have half of something, rather than nothing—that’s a deal. More importantly, if a practice turns over accounts to a third party that has a collection letter service at a reasonable age—say 120 days—they’d pay a flat fee per letter series. It’s worth having your manager look into options endorsed by state and national specialty societies and MGMA.
-
Most importantly, use modern technology. A company like A-Claim, a subsidiary of BCBS of SC allows your practice to set up a monthly payment plan that automatically bills patient’s credit card for a pre-agreed sum each month or debits their checking account, like health clubs and mortgage companies do. This lessens the pain of chasing and enforcing payment plan agreements. Go to
www.a-claim.com and ask for a demo. You need not use their eligibility or other services if you are happy with what your clearinghouse offers.
In short, it’s a New Year. Start off with a clean slate. Reduce the old historic accounts that serve as a distraction and remedy the process errors that are the seeds planting new AR problems for you. Here’s to more profitable 2010!
If you or your manager would benefit by help in assessing the AR situation in your office, KZA offers a long distance service that allows us to diagnose problems and issues and review our findings in a conference call. If your situation requires more than phone help, a consultant can come on site and assist in making needed changes. Contact Colleen Gallagher, client service director at 312.642.5616 or by email cgallagher@karenzupko.com