Accounts receivable nightmares happen. Most practices have weathered periods of soaring bad debt or collections numbers at some time in their history—and every one of them will tell you how hard it is to get those numbers back under control. Considering that patient payments in healthcare rose by 193 percent between 2011 and 2014, it’s no wonder that practices have had a lot to handle in recent years.
Managing accounts receivable correctly requires frequent and thorough maintenance. For practices, this applies not only to managing patient payments, but also to managing billing claims to payers. Drop the ball on either one, and your numbers will show the difference.
A number of factors play a role in patient collections and billing/coding, but there are three big mistakes every practice should avoid when managing accounts receivable or patient collections.
Letting financial, insurance, or contact information fall out-of-date.
Communicating with your patients regarding their plan for payment, as well as debt and payment schedules is essential in patient collections. The unfortunate truth is that you cannot expect all patient payments to come in on time, but you can make sure that most arrive in a timely manner by ensuring that all insurance information on file is current, by allowing for automated payments for patients who have larger bills, or through frequent contact by phone or statement. If payments are late, you need to be able to reach the patient to work out the issue. Verify address, phone, insurance, and any other pertinent details every time a patient visits your office. Use every face-to-face interaction to your best advantage and this information is less likely to get away from you.
Late submission or infrequent management of claims and resubmissions.
Effective claims management requires full-time attention. All claims should be submitted within 24 hours if at all possible. Practices also need to track claims and make time to handle denials or other issues immediately. Waiting can result in your practice missing out those funds if the deadline for resubmission passes. While denial rates average between 5 and 10 percent, some sources report that they can be as high as 25 percent of claims. With the challenge of adapting to the ICD-10 coding system, there have likely been some fluctuations as practices and payers adapt. For these reasons and others, keeping a close watch on claims processing needs to be a top priority.
Failure to manage financial performance trends and track patient payments.
A final mistake some practices make is neglecting to track financials. It’s easy to get distracted from the numbers and the bigger picture when you feel mired in trying to survive the day-to-day challenges. However, failure to run thorough reports and check accounts receivables, claim and denial rates, and incoming funds and expenditures will ensure that your practice’s financial health is unpredictable at best—a guessing game whose outcomes you cannot control. Without the big picture—an understanding of all sides of your funding circumstances—the financial trends and the ability to target patient issues will escape your notice and your ability to act on them.
Once the doors to your practice opened, you became well aware of the challenges of balancing business with quality care. While the health of your patients is your primary mission, your practice also has to be financially sound to support their needs and your ability to treat them effectively.
Patient payments, patient collections, and claims submissions are your three main revenue sources. Keeping up with all three is a big job, and the biggest part of it is making sure your business office and billing professionals have a good set of policies and procedures in place to regularly review and update patient records and financial trends.
Take a moment to consider your current policies for managing patient records, filing claims, and reviewing performance trends. A few small changes could have an impressive impact on the overall financial health of your practice—and ultimately, the health of your patients.