Do You Know What Your Accounts Receivables Are?
Posted On: November 29th, 2016
Revenue Management Services (RMS) project manager, McKesson
Regulations are increasing for home health organizations, even as payers merge and make changes that greatly affect them. Given these facts, can maximum reimbursement be accomplished? The answer is yes, but it requires a concentrated effort on proper setup and strong systems for accounts receivable (A/R) tracking.
Before concentrating on systems setup, spend time developing relationships with the provider-relations personnel at each of your primary payers. If you don’t know which person to speak to, call general support for this information.
We consulted with an agency in Michigan and advised them to work on establishing those provider relations connections. A few months later, they needed to significantly change their home health billing system. Our RMS team, together with the organization’s team and its biggest insurer, was able to implement changes and receive immediate feedback.
If your organization does not currently have an electronic collections process for the majority of your payers, especially your primary payers, you may be leaving cash on the table and causing lots of headaches for your staff.
Careful setup of these systems is absolutely critical. When I ask our implementation consultants where they spend time in terms of reeducating agencies, the No. 1 answer is setup. They often see electronic systems that never got set up properly or weren’t maintained, mostly because of staff turnover. The result is a dysfunctional front end with a heavy burden on the back end that won’t produce the results that you need.
Without knowing what is causing denials, it’s impossible to manage your outstanding A/R—to the point where claims may sit so long that they expire. Yet many home health organizations print their A/R aging reports and handwrite notes on them. That’s a cumbersome, inefficient method that quickly should be replaced.
We recommend actively managing your outstanding A/R, even if it’s through a simple spreadsheet. The spreadsheet could contain the patient’s name, date of birth and Social Security number, along with the policy ID. Include columns to help manage A/R, including the person working on the denial, the status of the claim (a drop-down menu), and an issues column (i.e., why hasn’t the claim been submitted).
The log would allow billers to track their outstanding claims and administrators to see issues that need to be addressed. For example, you might discover that of your $1 million in A/R, $700,000 of it is from physicians not signing. Some agencies we work with have begun hand-delivering orders to obtain those signatures. The log can be used as the basis for a weekly or monthly report to the CFO showing claims status.
You also should set (and stick to) a monthly close date. This allows accounting to create and follow a closing schedule and sets expectations about reporting, because people will get used to getting the A/R status report at the same time each month.