It All Adds Up – Accounts Receivable Collection Must Be as Effective as Possible

Medical practices continue to be squeezed with reimbursement cuts and increased overhead expenses. Electronic Health Record (EHR) systems are being mandated, and ICD-10 is looming just around the corner. Additionally, many patients are having trouble adjusting to their payment responsibilities in the world of increasingly common high-deductible plans that are being offered by their employers and through the public exchanges.

With all of these pressures on your practice, it is essential that your accounts receivable collection efforts are as effective as possible. This article will help you to understand the impact of some recent developments affecting collections, the reasons that many experience increased accounts receivable balances, and some keys to collection success.

One of the common discussion points that we are hearing from practices across the board has been that revenues are down, even though charges are holding steady and providers are as busy as ever. So what might be causing this?

The first reason, which shouldn’t be a surprise to anyone, is decreased reimbursement. Medicare and private insurance companies have been cutting rates, and there is little you can do to influence this.

The second reason for decreased revenues is the growing use of high-deductible health plans. In general, there appears to be an overall lack of understanding and education to the patients as to how these plans work. Many see a lower premium and jump on it, but then can’t figure out why they are receiving a bill for their office visit. And when they do receive that bill, they have no way to pay for it, since they have not put any money aside into a health savings account.

Unfortunately, and important for your patients to note, is that the days of the $25 office visit co-pay are seemingly coming to an end for many.

If all of this wasn’t enough of a headache, ICD-10 is set to go into effect on Oct. 1. With the implementation of ICD-10, even the best and most prepared billing companies are preparing their clients for delays in collections and increased denials. In a recent survey from the Workgroup for Electronic Data Interchange, only 33{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of providers have completed an ICD-10 impact study and only 25{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} have begun testing claims. Approaching ICD-10 in a manner that it will not be delayed any further is critical to your practices future collection efforts.

One area where practices are losing the accounts receivable battle is before the patient even sees the provider — at the front desk. Often times, inaccurate insurance data is collected, or there is no communication with the patient about billing and collection matters and policies.

Just providing a standard form letter for the patient to sign or take home is not enough. For a costly visit or procedure, consider calling their insurance carrier in advance to see where they stand in relation to meeting their deductible for the year, and how much they may be required to pay out of pocket. Generally, when a patient receives your bill for services a month later, it should not come as a surprise.

The other area that can often lead to increased accounts receivable balances is in the billing and coding functions. Poor notes taken by the provider or not using EHR properly can make it difficult for the billing department to accurately charge for a service. Additionally, not following up with the billing department on denials and other errors can make it difficult for them to correct a mistake they may be making. Here, it is extremely important for there to be open communication between the office, providers, and billing teams.

Regular, joint meetings should be held so that everyone is working together as a team towards a common goal — improved collections.

To be most effective, it is essential that your front office team receive proper training and support. This training should include building an understanding of which services can be collected for up-front and how they can go about determining a patient’s payment responsibility if that information is not readily available on the insurance card. It also includes training in certain soft-skill areas, such as patient communication techniques.

Your staff should set expectations with all patients regarding your payment policies, including what happens if they do not pay their balances due. Sometimes, a friendly reminder to all patients, such as a sign on the reception window stating that ‘co-pays and deductibles are due at the time of the visit’ is generally helpful to your staff in confronting difficult or forgetful patients.

Other times, consider allowing your team some flexibility in creating a payment plan with the patient. This will help show the patient that while you are serious about collecting the money, you understand their financial concerns and are willing to work with them. A slow-paying patient is better than one who does not pay at all.

Whether it is billing patients or insurance carriers, timely billing is essential in ensuring that your charges are collected. Insurance companies should be billed daily wherever possible. In the event that there is a charge dispute, or in those unfortunate cases where the wrong insurance company is billed, this ensures that the claim can be corrected or properly billed before the time to submit a claim expires. When a claim remains outstanding, consider following up with a phone call or e-mail. If a claim was not paid or even denied previously, simply resubmitting it tends to have little effect on the outcome.

With patient bills, the process can typically be expedited by ‘reminding’ patients of an outstanding balance when they arrive for their next appointment, as opposed to relying on mailed invoices. In larger practices, it can also be successful to have one designated ‘point person’ responsible for monitoring patient account receivable balances. They can help to ensure that all mailed invoices, calls, and certified letters are tracked and monitored. Collecting money costs money — therefore, it is important to understand the balance between collecting that $50 balance due and spending $100 to do so. There should be a formal policy in place so that your team knows when to stop collection efforts, and what to do when those efforts fail. This should include, but not be limited to dismissal from the practice, assuming all laws and regulations are followed.

With the current economic pressures facing your medical practice, it is essential that you are as effective as possible in collecting as much of your accounts receivable as possible in a timely manner. By implementing a few key policies and procedures, you can help to ensure the financial well-being of your practice. v