Revenue cycle management encompasses everything related to the order-to-cash process. For success in revenue cycle management, constant and vigilant oversight of the key processes is needed. With that oversight, continuous process improvement can help you maximize profitability. Here are some areas to focus on to improve receivable collections.
Check Your Front End
No matter how well the front end of your order-to-cash process operates, you will always have residual receivables. Shore up your front end by solidifying financial responsibility up front before dispensing product. Furthermore, verifying insurance and eligibility is no longer a simple process. With a range of payer options (Medicare Advantage Plans and Medicaid Managed Care in addition to commercial plans, self-insured and special plans, etc.), and a plethora of third-party administrators, securing payer information can be confusing for staff. Yet they must collect the proper copayment prior to dispensing and they must gather documentation needed to meet the reimbursement requirements for clean claim submission. Finally, be certain that all employees know which payers you contract with and which plans, including the requirements for billing such as prior and reauthorizations, medical necessity documentation, utilization limitations, chart notes, lab reports, special forms, etc. These fundamental payer requirements should be easily accessible to all staff responsible for any part of the revenue cycle.
On the Back End
Although the front-end requirements inform back end payment, once billing is submitted electronically to the payer, wait until the payment term of the contract to begin a claim inquiry (45-day payment terms, for example, means you will not check status of a claim until day 46 from the submission date). Once the specified time to receive payment has lapsed and you have not yet received payment, check to ensure you did not miss a front-end rejection and/or it hasn’t gone missing (that is, it never made it to the payer). If you have not received a payment or a denial, you should resubmit the claim after checking to be certain you had the right claim submission information, such as address, etc. Be aware of timely filing deadlines.
Dealing With Denials
If you receive a claim denial, there is no better time than the present to resolve it. If you stay in control of your denials, you will undoubtedly minimize outstanding older accounts receivable (AR). Key denial considerations include:
- why you are receiving denials (why);
- from whom you receive them (who);
- how much money is involved (amount);
- which products or HCPCS codes are affected (what); and
- the dates of service involved (when).
For some, a more granular view might also include filtering by referral source, intake representative and salesperson. At a minimum, segregate denials by reason, payer and HCPCS. Drill down by date to ensure that you do not miss timely filing deadlines and filter by dollar amount within each denial category.
The size of your organization will determine how you drive segregation of denial duties. Goals for working denials might be as simple as the number of denials worked daily or the number of lines worked. For other providers, denial tasks will be further segregated by appeal level, partial payments and the number of times a claim has been touched and resubmitted. Performance measures should include cash collected on resubmitted or appealed claims, and even the percentage of claims worked that result in payment versus write-off. I recommend either setting a goal to work denials within 48 hours of receipt or to work 100% of denials by end of week. When you set goals, make them concrete, understandable, short-term and achievable. Additionally, for high achievers, have a stretch or reach goal.
Today’s payers have to be more like partners than adversaries. Work together for the payer’s member and your customer; your ultimate goal is to enable the patient to continue to use your equipment. Money will be saved on both ends if communication remains open. If you perpetually receive false denials, prepare a list of the incorrect denials and schedule a meeting with the payer to resolve them. After all, you are entitled to be paid according to contract terms if you submit a timely, clean claim. However, if the contractor continues to deny without cause, be prepared to exit the contract, especially if the payer breaches the terms. The most important thing is to stay on top of your payers—especially your largest contracts—and to know how much money remains outstanding and for
how long. Drill down in the data to ensure you have the necessary information for a meaningful meeting.
In addition to the payer relationship, search denials to determine if something on the front end might be causing the nonpayment on the back end. Search for everything from common HCPCS codes to dates of service, subscriber numbers/prefixes, special contract rules, product categories, rental versus sale items, utilization limits, dollars outstanding per claim and more. This will require you to search data looking for patterns and trends based on denials.
The objective is to stop the denial bleed and to prevent its recurrence. Successful companies are constantly on top of these issues, utilizing software to track and analyze denial data.
Finally, when you change network or contract status, you must communicate with your staff. It is common to forget to inform staff when a payer contract is altered, implemented or terminated. Moreover, when problems arise with payers and management gets involved, staff need to know how to handle new orders, new claims and existing outstanding receivables. I have seen numerous occasions where payments are rejected due to a missing authorization when the authorization was properly submitted and theoretically received by the payer. If this happens regularly (set a threshold for a percentage or number of times it happens), contact management at the payer to illustrate their failure to pay on a clean claim with the data to back it up. Partner with them to resolve the matter and to avoid a recurrence. Decide how to handle new orders moving forward and communicate this to all staff. Let billers know whether they should hold billing until the issue is resolved and whether collectors should stop working on outstanding balances until the meeting is held.
As you learn the key issues at the payer level, create a checklist to help mitigate issues before they occur. What if you learn that one of your largest payers is exiting the Medicare market or has decided to contract with another provider, for example? Staff needs to know that the contract will end, when the change will happen and how to collect on residual outstanding claims, among other key issues. Companies with contract sales or payer relations staff who constantly communicate with internal staff experience fewer problems and fewer uncollectible receivables. Also, study the contract and its terms before signing to avoid future mishaps.
Choose Personnel Wisely
Not only is it critical to keep staff informed of changes at the payer level, it is key to use the right staff to handle AR-related matters. For example, working third-party claims and receivables requires strong analytical thinking and healthy follow-up skills. Persistence and problem-solving traits help tremendously. Collecting money from a customer, on the other hand, requires a different type of finesse. Straightforward and clear explanations are pertinent but reading the other person is as or more important than other skills. The ability to collect from the patient while making them feel heard and understood takes a special type of person. The latter is harder to find in a home medical equipment (HME) employee, but when that person is found, they can positively and dramatically impact patient AR. Either way, collectors enjoy collecting the money owed and should find favor in the success of their collection efforts.
As mentioned above, in today’s HME collection world, data analytics are crucial to understanding patterns and trends in outstanding open receivable balances. Maximizing on data to work the most important claims first and reporting back to the company and payer will help billers and collectors do their jobs more efficiently and with objective goals and metrics. When the system can find a denial trend by drilling down on HCPCS, subscribers, dollar amounts, dates of service and more, you can focus attention on collections that are easiest to work first. Becker’s Hospital Review notes that there are seven areas to consider automating: “coding and billing problems, coverage-related issues, processing delays with an insurance company, cash posting issues, submission and re-billing, contractual, and use cases such as clinical base rejections.”
In summary, stay abreast of how the back and front ends of your company work together to hone in on accounts receivable, a key process in revenue cycle management. From insurance verification to understanding payer guidelines, intake will inform back end collections. If payment is not received, track the denial. How promptly and thoroughly you handle outstanding open AR balances ensures control over collections. From working denials and residual outstanding AR to third-party payer nuances and private pay matters to staffing and software, rely on this part of the business to shore up the front end and to maximize payments. After all, the revenue cycle depends on payments to perpetuate the cycle.