In assessing accounts receivable (A/R) it is often distressing to know just where to start. You want your medical practice A/R to come down, but right now it might seem almost impossible with everything you have on your plate.
In conducting A/R analysis, I often find these tips to be helpful in addressing the need to lower the A/R and increase the revenue of the practice:
1. Know what your practice management system can do for you.
Knowing your financial system will help you to determine which reports provide the best look at your financial situation as it is right now. If you do not know your system that well then you are relying on staff to produce the reports for you. You may not be the one doing the work, but you are most likely the one making the tough decisions about how to proceed with reducing the outstanding A/R you have.
Additionally, your practice management system may be more robust than you think. Many times what you think you cannot get from the system is often not the case. Invest the time to learn what your system can and cannot do. Make sure to find out if your system has special enhancements such as:
- Eligibility checking for insurance
- Denial tracking for insurance denials
- Referral tracking for authorizations from insurance
- Internal collections module to track delinquencies
- Electronic posting for insurance payments
- Clearinghouse tracking system for claims rejections
- Write-off utilities to write off small balances globally
- Tickler system to track follow ups on accounts
If your system has the capability of these suggested enhancements, but they are an additional cost then weigh the pros and cons to see if it would serve a greater purpose to purchase the module you need to more effectively begin clearing your outstanding A/R issue or most importantly stop the ineffectiveness that may be attributing to the problem.
Get the education you need on the practice management system to make clear decisions on the route you will take to lower your A/R and keep it in check.
2. See staff as resources.
When you hire good staff then they become valuable resources for your business. Having confidence in their abilities means you provide them with the necessary education and means to collect timely payments. With clear decisions from you and clear practice policies they are able to move forward with:
- Collecting up-front payments
- Filing good clean claims
- Tracking rejections/denials
- Collecting post-visit balances
If this is not happening effectively then determine what needs correcting and move forward.
Your A/R will not collect or correct on its own; and continuing to allow it to creep up is only preventing the inevitable. Your attention now to the A/R status will make a major difference in your practice’s revenue.
3. Utilize a Daily Tickler System
You will know more of what to do next if you are creating or utilizing a daily tickler system. Some practice management software systems have built-in ability to use tickler or task systems to keep focused on what must be worked first.
4. Update Insurance Profiles
Your insurance profile or allowables should be up-to-date and current in order to determine both when insurance payments are incorrect and also to determine correct adjusted write-downs. If you are writing down to the expected payment at the time of charge posting (utilizing current profiles), then accounts receivable will be more accurate and true to what is expected from each insurance. You can only do this with current insurance profiles.
5. Implement A Collections System
You will first need to implement an in-house collections process by which you work your accounts receivable within the timeframes of your medical practice policy. Some guidelines on this are:
• Have clear policies on patient collecting processes
• Have approved practice collection letters for patients
• Have approved practice letters for appeals processes to insurance companies
• Have a policy and process in place for utilizing an outside collection agency
6. Utilize Aging Reports To Work Accounts Receivable
Your system aging reports will help you tremendously to determine where to begin working your A/R. You can clearly see from a current aging report those accounts and insurance plans that need the most attention. Guidelines for this are:
• Concentrate your efforts on all aging over 120 days for timely filing issues
• Work highest balances first
• Work insurance groups one at a time
Optimum accounts receivable would have the least amount of your A/R in the last category of greater than 120 days, but if that is not the case for you then you must do what you can to get that oldest aging category down first.
Some of Expert's suggestions that I found helpful were:
• Identify an Insurance Company To Work First
• Send Paper Claims to a CEO by certified mail
• File Grievances With Regulatory Agencies & CEO if necessary
Remember, your accounts receivable will not work itself. My last suggestion on this topic is to consider an accounts receivable recoupment agency to assist you with collecting was is due in the event that you cannot collect it yourself.
3. Utilize a Daily Tickler System
You will know more of what to do next if you are creating or utilizing a daily tickler system. Some practice management software systems have built-in ability to use tickler or task systems to keep focused on what must be worked first.
4. Update Insurance Profiles
Your insurance profile or allowables should be up-to-date and current in order to determine both when insurance payments are incorrect and also to determine correct adjusted write-downs. If you are writing down to the expected payment at the time of charge posting (utilizing current profiles), then accounts receivable will be more accurate and true to what is expected from each insurance. You can only do this with current insurance profiles.
5. Implement A Collections System
You will first need to implement an in-house collections process by which you work your accounts receivable within the timeframes of your medical practice policy. Some guidelines on this are:
• Have clear policies on patient collecting processes
• Have approved practice collection letters for patients
• Have approved practice letters for appeals processes to insurance companies
• Have a policy and process in place for utilizing an outside collection agency
6. Utilize Aging Reports To Work Accounts Receivable
Your system aging reports will help you tremendously to determine where to begin working your A/R. You can clearly see from a current aging report those accounts and insurance plans that need the most attention. Guidelines for this are:
• Concentrate your efforts on all aging over 120 days for timely filing issues
• Work highest balances first
• Work insurance groups one at a time
Optimum accounts receivable would have the least amount of your A/R in the last category of greater than 120 days, but if that is not the case for you then you must do what you can to get that oldest aging category down first.
Some of Expert's suggestions that I found helpful were:
• Identify an Insurance Company To Work First
• Send Paper Claims to a CEO by certified mail
• File Grievances With Regulatory Agencies & CEO if necessary
Remember, your accounts receivable will not work itself. My last suggestion on this topic is to consider an accounts receivable recoupment agency to assist you with collecting was is due in the event that you cannot collect it yourself.
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