When faced with a task that seems larger than it really is, it's best to break it down. Creighton Abrams said it best, "When eating an elephant, take one bite at a time." While I'm not suggesting you eat an elephant, it would be beneficial to you and your practice to step back and focus on one problem area at a time. Reviewing your practice's accounts receivable (A/R) should be done in this same manner.
Many people are so afraid to even open that Pandora's Box of secrets that it feels paralyzing to them; they don't know where to begin. To get you started, here are some ideas:
1. Go into the project knowing that A/R is a living and breathing entity. It changes minute by minute — adding and taking away from the overall dollar amount. Let go of the desire to "chase it down." You'll never catch it.
2. Tackle one payer at a time. Let's look at Medicare, for example. If you have A/R over 30 days, start there. Typically, Medicare will pay within two weeks of receiving a claim, so it really pays to submit your charges the same day the patient is seen. You also have a timely filing deadline of one year from the date that patient was seen.
Next, start looking at denials, and reason codes. Tally those codes up and then use a coding resource to easily decipher what they mean and what you need to do next. You might even find that your software just did not post monies received properly, and that the outstanding balance may not exist.
3. Understand each payer's rules and recommendations for submitting clean claims the first time. If you can get your first pass recovery rate (FPRR) above 90 percent, you won't have to worry about old A/R and follow up.
4. Contact provider relations for each of your payers and ask if there is a local representative in your area. I was e-mailed a name from our local Southern California Blue Shield group and contacted her right away. Within a week an outstanding problem was resolved; one we had been working on for a few months. These reps are there for you, find them and utilize them!
5. You should be doing a complete A/R review bi-annually. This will keep surprises from popping up and aging out, possibly leaving you with very high balances.
6. Manage your patient balances really well. Send three patient statements, and if there is no response, send a 15-day letter. If there is still no response, get them into collections. You are not a bank issuing a loan; you are a business trying to operate.
This is a start to shifting your mindset and approaching your A/R in a much more efficient manner. If you continually accept that your A/R will be high and aged out, it will. It does not have to be that way. Do not accept "industry standards" as your benchmark. Do better.