This post was authored by WebPT Billing Specialist, Geoff Elledge. The photo of Geoff we used for this post was just too good to pass up. Enjoy!
The number one key to mastering your A/R is a good tickler system. Long term success is all about timely and consistent follow up of your outstanding claims. In order to get a good handle on this mastering a few key elements will go a long way.
The first step is a good registration process. The correct entry of patient demographics and correct insurance information is vital. If the claims go out error-free to begin with, you’ve won half the battle. This includes both patient and insurance information, as well as proper coding of CPT and ICD code combinations that support your service and the insurance accepts through their standard coding edits.
The second step involves getting to know your insurance plans. Learn the normal payment cycles for all of your major companies. For example, how long does it take each one to process and pay a clean claim? BCBS can process and pay in as little as 2 weeks. Other carriers, such as Medicare take an average of 21 days. Other carriers like Cigna are usually 30 days or less. Health Net will tell you while you hold over the incessant hold messages to allow a minimum of 30 days to receive and enter a claim…payment may take significantly longer. Knowing the normal processing and payment cycles for the major insurance companies allows you to most effectively plan your strategy for follow up.
Most Practice Management (PM) software allows you to view your aging through a variety of reports. They are typically organized by Current (under 30 days from submission), 30, 60, 90, and 120 days or higher. Most practices will aim for an A/R with a low percentage by total dollar value that is over 90 days, 5% is about as good as most practices will ever achieve. It’s more common to see a 10-15% figure for all of your A/R 90 days and above. Keep in mind this can be the result of just a small number of claims with a common issue. It doesn’t mean not to worry, but be aware of the underlying members/insurances beneath the numbers. If you handle a lot of liability cases or pending attorney settlements, they can artificially inflate your older aging out of proportion to goals. The vast majority of your aging should always be in the current to 30 days categories. There are very few companies that do not pay out claims within 60 days.
As you view your reports, save a copy of each month’s final totals. From one month to the next look for patterns in any individual insurance company. If you know that Cigna generally pays in 30 days and you start seeing the 30-60 day categories rise it’s a sign of trouble. Have your biller follow up on all of your outstanding claims 30+ days and see if there is a particular issue in common. Maybe it’s a clearinghouse issue or possibly changes in electronic format or even your provider file. Whatever it may be, you won’t know what or how to fix it if you never realize there is a problem.
Organize your standard monthly follow up by normal clean claim processing times. Focus on the insurance companies with the shortest timely filing requirements to start. From there, work on your oldest to newest claims in the aging. If you have a single patient with multiple claims as the culprit for a higher aging, commit some time to finding out what the insurance needs to complete processing the claims. It might be as simple as the patient completing their annual Coordination of Benefits form. A conference call with the patient and the insurance might handily solve your problem. If it’s medical records or a physician’s order, get a fax number you can send them to and call to follow up to verify it’s been received and routed to the proper department.
In the end, the true key to achieving your A/R goals is all about organization. You must have a good tickler system set up for disciplined timely follow up and resolution of your outstanding claims. Different offices have different tools available. I personally use my email calendar to add reminders on set days after each call I make. When you call BCBS and they tell you allow 10 business days for resolution or response, set a reminder to call back on that patient on the 11th day. Set out time every day to do all of the follow up in your calendar. If you don’t get through everything, move it to the following day until it is completed. If you wait until the next time you run a report 30 days from now, it’s delaying your eventual payment that much longer. If it was a simple fix you could resolve on the 11th day, it would be done and the claim paid before you would normally run the report again.
With solid registration skills, knowing your insurance plans and becoming disciplined at claims follow up, I guarantee you can easily maintain a solid Accounts Receivable aging cycle. During my time at a national company, I was personally responsible for bringing in 1 million dollars or more a month. When I started, the aging over 120 days was at 21%. By utilizing my knowledge of insurance and a disciplined follow up system, I made a huge difference. In six months I was able to reduce it to 10% and by 12 months I had it consistently at 5%. It is not difficult, but it requires firm commitment and discipline. Every month, it takes less time, and your overall aging will start to dramatically improve, allowing you to allocate time and resources toward other aspects of your practice.