(4 min read) CQI involves more than just checking reports to make sure that the “red” went away, it’s a continuous process focusing on ...
Maggie Adams | October 31, 2019
(7 min read) The most common question I get is, “why does our A/R keep growing?” Problems with unpaid claims, denied services, and growing patient-pay balances plague our industry. There will always be some claims that do not get paid. However, there are steps you can take that will improve account balances and lead to better cash flow.
First, assess the situation with a look at Days in Accounts Receivable. Days in A/R measures how quickly claims are paid. It takes time for claims to process through third-party payers, but it is not good if payments are delayed. A good range for Days in A/R is less than or equal to 40-45 days. Use this formula:
Total Accounts Receivable + Credit Balances
______________________________________________________________________ X 30
Gross Charges – (Write-offs + Adjustments)
The formula can be applied to overall A/R to see how well things are going, but it is most effective when applied to individual payers. Don’t panic at the thought of the work involved to calculate the Days in A/R for every payer. Focus on the top five payers you routinely bill. This will provide information on who pays in a timely manner so you can focus your efforts accordingly.
Medicare pays quickly. A 40-45 day average for Medicare is too high. Don’t overlook Medicaid. Learn the average of your Medicaid turnaround to know if their payment response is good. Billing companies can also apply this exercise to individual clients to spot problem payers.
There are two reports that will help you: an A/R Aging Report by Payer (excluding self-pay which will be addressed further in this article) and a Denials Report by type of denial. The aging report will show how accounts are aging. As noted above, Medicare pays quickly, thus the volume of Medicare accounts over time should decrease. This report will show the status of commercial payers and highlights which payers need to be targeted for pursuit.
The Denials Report will show you if the problem is internal or outside the company. High volume of denials in certain categories (e.g., denials for lack of authorization on non-emergency transports) can then be addressed in-house.
Documentation affects cash flow for both emergency and non-emergency services. The best thing emergency providers can do is to document how they were dispatched. This information helps billing determine if the call was ALS or BLS, thereby affecting reimbursement. When done appropriately, the billing is done cleanly and accounts receivable does not grow.
For non-emergencies, denials can be avoided by improving the information gathered at the time of call intake. Decrease denials by:
Providers need a robust approach to time-of-service collections for non-covered trips, wheelchair van services, and inter-facility air transports. For example, the patient may only have coverage for emergencies. If non-emergency services are not covered by the patient’s insurance plan, that detail is best known prior to rendering service.
Call center personnel are like “special forces,” as it is easier to train a small group of people to manage facility and patient requests. A transport coordinator can be a good addition to the call center. They will address payer issues as well as forms needed like the Physician Certification Statement.
The pre-billing/verification team also has a hand in denials management. Pre-billers are detectives—they need to drill down enough to discover the best payer. By doing so, pre-billers can help avoid denials like “care covered by another payer” or “patient enrolled in hospice.”
Work to decrease claims that don’t pay because the patient’s deductible was not yet met. Software can be very helpful here. In today’s world of high deductibles, it is essential that billing is performed on the “right day,” after the patient’s deductible has been met. Software can assist to make a deductible determination and monitor the status of deductibles to ensure claims get submitted with the best chance of receiving payment. This means the pre-biller/verification team needs to be trained to use their software to its full advantage.
For self-pay amounts that can’t be solved through deductible management, consider assessing the patient’s propensity to pay. This concept has long been used in industries like banking. The approach allows the provider to focus their efforts on who is most likely to pay and who can afford to pay. Armed with that information, the billing department works with an established process to treat accounts with high, medium, or low propensity to pay. Tactics that determine propensity to pay help determine who to pursue in-house and which accounts to send for collections.
Patients need to have as many options as possible to pay their balances. Offer credit card payments, PayPal, online payment options, and time payment plans. I recommend setting a minimum monthly amount for time payments. Never ask the patient “how much can you afford to pay.” Instead, ask the patient “how long will it take you to pay.”
If using time payment plans, investigate text payment programs where patients are alerted by text that their monthly payment is due. These services are usually tied to a pay-by-phone option that can improve response.
For those people who can’t afford to pay, update your financial hardship program. Use the Federal Poverty Guidelines as the standard for financial hardship. These are published annually every January and are available online.
There are two timely filing limits - the first limit is for the initial claim; the second limit is how long to file appeal (much shorter). The sweet spot for unpaid claims is 60 to 90 days old. If a claim is not paid by 90 days, there is a problem and the clock is ticking to get it resolved.
It is advisable to work youngest accounts first. Younger money is easier to get because supporting documentation is more readily available. Go after younger accounts that are more likely to resolve. Spending time on oldest accounts is not as fruitful because of the worry about expiration of timely filing.
Here is a useful formula to help manage accounts over 90 days old:
Total Amount Uncollected in 90 Days & Over Categories
Total Amount Outstanding
This percentage will show what portion of accounts are over 90 days old (this can be done in each payer category). The target range is 12% or less over 90 days old. If the percentage uncollected over 90 days is significantly higher, proceed as needed. Finally, write-off very old accounts that blur the value of the A/R.
Medicare’s process for appeal is well-documented. For other payers, the path is not always as clear. The first piece of advice is to not resubmit a claim for payment unless there is proof the initial claim was never received. Resubmissions lead to duplicates and neither claim gets paid.
Use the proper channel to appeal. Calls to Provider Relations are time-consuming and not consistently successful. Medicare Advantage plans have an escalation process like Medicare and can often be handled through online submission.
Times have changed. Many insurers have their appeals processes noted online (check United Healthcare, Aetna, Cigna, etc.) The insurer’s process involves easily completed forms, including methods to submit multiple claims at one time. The insurer’s escalation processes are also noted online.
Don’t take “no” for an answer if supporting documentation is available for the claim. Furthermore, do not repeat an appeal step; go up to the next level of appeal and continue to escalate as needed. There are appeals that can go to outside review.
Unpaid facility accounts can drive up A/R. By regulation, certain non-emergency transports get billed to facilities. Facilities are supposed to pay promptly for service. Monitor facility accounts closely so as not to risk compliance of you or the facility. Facilities may need routine in-person meetings to ensure service and payment issues stay on track.
Rejections are different from denials. Routinely check rejections. Problems not discovered until much later will negatively impact cash flow. Verify that all claims submitted through the clearinghouse went to the payer. There are two doors: door one is the exit from your system; door two is the entrance to the payer. Understand that problems within a batch of claims might impact the whole batch. Claims rejected at the clearinghouse may involve a simple technical issue with the claim such as lack of modifiers or a funky date of birth—both of which are easily corrected.
The focus in many organizations is to get new claims out the door. Yet the best of claims processing systems is no guarantee of payment for every trip. Resource A/R follow-up with appropriate staffing. Designated staff need to be dedicated to A/R management, appeals, denials management, and follow-up. On the flip side, don’t waste resources when staff doesn’t have the needed skills. There are some functions that are better outsourced. Collections are best handled by trained personnel familiar with collection regulations.
For more tips on managing accounts receivable challenges, join us at the upcoming webinar, “A/R Management: Working with Patients & Third-party Payers,” on Wednesday, November 13th.
Maggie Adams is the president of EMS Financial Services, with over 25 years’ experience in the ambulance industry as a business owner and reimbursement and compliance consultant. Known for a practical approach and winning presentation style, Maggie has worked with medical transportation providers and billing companies of all kinds to provide auditing services, assess their billing for best practices and support their billing and documentation training efforts. For more info, contact Maggie directly at email@example.com or visit www.ems-financial.com