Since everything that is owed to a medical practice falls under the category of accounts receivable, or A/R, it is easy to see how important good AR management is to the success of any business. Surprisingly, though, millions of dollars are lost every year simply due to a lack of AR follow-up management.
Accounts receivable include both what payers owe for reimbursement and what patients owe for co-pays and the part of any charges for which they are responsible; therefore, your A/R department must have the necessary skills to deal graciously with patients as well as be able to be persistent with payers.
A System for Tracking Claims Is Critical
Medical practices are losing up to 25% of their income due to unpaid claims, which is clearly unsustainable. Much of this is simply due to failing to resubmit or appeal claims that are denied or rejected and allowing them to expire.
Payers reject claims for the slightest error, including misspelled names and wrong dates. Ideally, claims are “scrubbed” to remove any errors before they are submitted, but mistakes may still happen. Aside from administrative errors, claims also get rejected or denied inappropriately for a number of reasons. It takes experience to be able to quickly determine what triggered a rejection and know how to resolve it, but it is important for any medical billing department to have A/R follow-up staff who know how to do it.
Medical Billing Software Is Key to Efficiency
Software is a critical part of effective medical billing, including accounts receivable. Medical billing software should include a feature that generates notifications and bills at appropriate intervals. For billing patients, 30, 60, and 90 days past due are typical; however, for dealing with payers, the timeline for follow-up can be much shorter and will differ depending on the type of issue being resolved.
It is well known throughout the collections industry that the longer a bill goes unpaid, the less likely it is to ever be paid. On top of that, every time a bill has to be addressed by staff, the cost of the collection goes up, so profit goes down. Getting claims and patient bills paid as soon as possible is vital to keeping revenue up and costs down.
Use Monthly KPIs to Monitor A/R Follow-up Management
Your monthly reports generated to monitor the success of your practice should include A/R key performance indicators (KPIs). At a minimum, this should include the amount in aging accounts compared to the amount billed and the number of days outstanding. If your A/R management practices are effective, you should see both those figures gradually decreasing.
It is also important to document the cause of rejected claims and payment delays and determine how to avoid a recurrence. For instance, you may find that a certain insurer is rejecting your claims because a contract has expired or was never completed, but you were never informed that there was a problem. If you had not documented each of the issues, the pattern would not be seen, and the real source of the problem not be corrected.
Other reasons for tracking down the cause of the problem could be that your staff may just not know about some new filing requirements, or a coder may have a misunderstanding of common service and be repeatedly miscoding that particular item. Taking the time to retrain staff on errors once can avoid many future recurrences of the error.
In order to have the depth of understanding necessary to be able to resolve denied claims, medical billers need to have years of experience in addition to their formal training, or they will not be able to find and resolve the issues or understand the payer’s objection so that they can provide the necessary additional information to get reimbursement.
Outsourcing A/R follow-up management to a professional medical billing service like Medcare MSO ensures that your claims will be quickly filed and tracked until each of them is paid. Our innovative system includes having an experienced biller scrub each claim for errors before it is submitted and follow up on any issues. Your in-house medical staff doesn’t have time to go through old claims and figure out what the cryptic denial codes mean, but our staff is experts at exactly that. Give us a call today at 800-640-6409 if you would like to have a more efficient A/R process, increased revenue, and less stress.