Accounts Receivable, or A/R, is the money that is owed to your medical practice for medical services or procedures that have been performed and billed for. A/R can be assessed on monthly, weekly, or even daily intervals, with a higher A/R corresponding to more copays or deductibles not being paid to the practice and reducing your business’s effective revenue stream. The dream for any practice, of course, is for A/R to approach zero. How can you achieve that? What concrete steps can you take to effectively reduce your accounts receivable and increase your bottom line? Here are three steps:
Identifying Bottlenecks in Your A/R
A/R is all about time. The longer a bill takes to make it through your entire revenue cycle management loop, the greater your A/R. So, the best way to tackle what is causing a delay in your workflow is to identify the bottlenecks, or where your billing cycle seems to be slowing down. First, identify all the steps that a bill must go through, starting all the way from the very beginning. This may be as early as verifying the accurate demographic and insurance information of a new patient. Think not only about the processes, but which staff member (i.e. initial personnel, physician, coder, medical billing staff, etc.) has the bill, for how long, and how long it takes to go from one point to another. When examining these processes, eliminate redundancies in possession or action. If two staff members are doing the same task, eliminate one step, or consolidate any error checking steps until the very end, to allow the paper to travel as quickly and accurately as possible. If the process is taking too long at one particular step, ask yourself why. Maybe the employee at that step is performing vital but time consuming tasks that can be spread out more evenly, or maybe they aren’t optimizing tasks that can be automated electronically.
Get the Timing Right
A huge cause of an increase in your A/R is when claims are denied. A conservative estimate from the Centers of Medicare and Medicaid (CMS) suggests that only 70% of first-submission billing claims are actually paid, and of the 30% remaining, 60% of those rejected claims are never resubmitted. When analyzing why these claim denials are so high across practices, certain parameters can be analyzed, like Days in A/R at 30, 60, and 90-day intervals. Unfortunately, this figure can feel outdated in the age of multiple payers for different receivables. For example, two different receivables that are 30 days old could require completely different actions from different payers at different times. The solution is to instead calculate an individual Days Sales Outstanding for each claim to be able to more accurately follow up with insurers to get claims paid as quickly as possible. Manual calculation of DSOs can be cumbersome, but the tasks can be auto-populated by many different billing software solutions.
Optimize Your Electronic Workflow
It goes without saying that you are introducing inefficiencies in your revenue cycle management by not having an Electronic Health Record with adjunct billing software capture capabilities. Even if your office is equipped with an EHR, there is still a chance all of its functionality isn’t being used to its fullest extent. Here are some ways to make sure your EHR is helping lower your A/R as much as possible:
Processes Management: Have your EHR completely automate your documentation, from patient appointment scheduling to collecting reimbursement. Reduction of errors from manual documentation drastically reduces claim denial rates.
Automated Work Queue: Most EHRs allow for automation of scheduling changes on the fly, whether the changing of patient demographic info through a patient portal, or the rescheduling of an appointment by a physician. Decreasing the paperwork involved introduces less vulnerability to error.
Specialty Routing: Some EHRs have unique add-on functionality for specialty routing to follow complicated patients who require the input of multiple medical specialists. If this is available, your practice should utilize this feature to greatly reduce the chance of repeated laboratory tests, imaging, or unnecessary follow up appointments. It also helps the entire care team stay on the same page.
Coordinated Claim Tracking: As EHRs advance, one functionality widely available is advanced tracking of claims and duration of submission. As insurance companies deny or underpay claims, the office billing staff should get a better idea of each insurer’s policies. Online claim tracking is becoming much more prevalent, and some EHRs are able to connect with these tracking services to allow an integrated claims checking workflow.
While all 3 of these tips encompass a wide range of tactics for your practice, the biggest difference in reducing your A/R might be in outsourcing your medical billing to a company that specializes specifically in this type of work. An outsourced medical billing company has the capacity to handle all of these tasks to get you as close as possible to 100% accepted billing claims. One thing is almost guaranteed, an outsourced medical billing company will improve whatever it is you have now.