When you have a high accounts receivables balance, it is a red flag that there are inefficiencies in your Revenue Cycle Management. If these amounts have gone unpaid for longer than three months, look into how Collections are currently being processed and managed. Health care insurance plans are also a factor due to their varying proprietary rules which may be a cause for denials and resulting payment delays. Revenue loss can usually be traced to problems in the following areas: Patient Collections, Failure to Address Claim Denials, Failure to Review Write-Offs and Staffing. Below is a summary of the problems and what steps you can take to make improvements.
Follow Up on Patient Collections
With High Deductible Health Plans on the rise, patients will expect to pay more out of pocket for health services, and this can cause delays in payments being received promptly. You may have noticed some of your patients asking questions during their office visits that seem to focus more on the cost of services rather than the recommended procedures themselves. This is due to the anticipated financial stress they are anticipating while trying to balance that with their need for medical services. In this age of HDHPs, patients must take the initiative to learn about their insurance plans. Additionally, for your practice, you need to put in place well-defined payment expectations. You must train your staff to effectively communicate the financial policy to ensure efficient patient collections.
Failure to Reduce Claim Rejections and Denials
Claim rejection rates can increase as a result of various mistakes that can happen within your practice including administrative errors, coding errors and charge entry mistakes. This causes delays as the claim is then returned to the biller to be corrected. On the other hand, denials occur when the claim is declared unpayable due to some reasons, such as problems with the contract between the payer and the patient. The denial can be appealed, but again this causes delays.
Other factors causing delays include payer errors, missed payer deadlines, and medical necessity denials. To lower these rejection and denial rates, put clear internal processes in place to help staff members identify errors before the claims are even submitted. Where there are payer errors and denials due to medical necessity, take the time to research each claim and file timely appeals. Doing so could reduce revenue loss to your practice.
Failure to Review Write-Offs
One of the most common payments posting mistakes is when the wrong adjustments are made to charges. Be sure to analyze write-offs for errors to reduce the number of unnecessary write-offs and look for opportunities to improve revenue cycle performance. The American Academy of Family Physicians recommends that you have your fee schedule and the reimbursement schedule for each payer readily accessible while keeping close track of contractual write-offs. If you change your fee schedule, make sure that you renegotiate contracts to reflect that to avoid an increase in the number of write-offs.
If you have unmotivated or unqualified staff, you are bound to experience inefficiencies. Take the time to research where the most common issues leading to high accounts receivables in your practice originate and train or hire new staff where needed. Ensure that co-pays are attempted to be collected at the time of the visit. Many times there is a lack of communication between front office and back office functions which is a problem that can be remedied through training. You may decide to appoint a Project Manager to review all internal processes and implement in-office training to reduce errors and delays while improving workflow or hire one externally. If finding qualified staff is a comprehensive problem, consider outsourcing your Revenue Cycle Management.
It is vitally important to stay well informed about the state of your practice’s accounts receivables. High accounts receivables can be due to a poor understanding of various healthcare insurance plan policies in general. However, some other factors could be contributing factors. At the heart of most of these problems are unnecessary delays due to lack of communication and training. Educating your staff on how to avoid mistakes in the “red flag” areas previously discussed is well worth the investment of time and money. Creating efficient workflow can ultimately prevent revenue losses which is essential for any practice.