5 Easy Strategies to Improve Collections at Medical Practices
For many medical billing professionals, accounts receivable (AR) objectives are the biggest challenge in revenue cycle management. Yet, benchmarking AR is not difficult if approached with the proper vision and technology. It is important to understand that AR at a medical practice is a dynamic and constantly evolving asset. Every single transaction has an influence on AR, either bringing it closer or pulling it further away from the benchmark. It takes constant endeavors to reach the magic number that accounting professionals define as an acceptable AR. An AR of zero is practically impossible, but here are 5 easy strategies to improve collections at your medical practice so that nothing exceeds the 30-day period:
#1: Understand filing rules
It typically takes Medicare two weeks to reimburse practices provided the claim filed is a clean one. If a medical practice is routinely experiencing a large number of denials or delays, it calls for an investigation into the filing process and analysis of denial codes. Coding resources are useful in identifying common errors and directing the billing department towards appropriate corrective steps. Of course, to expedite claim reimbursement, it is imperative to not waste time. The goal should be to file all claims on the day of the encounter.
By understanding the filing rules for Medicare and third-party payers, medical practices can initiate the procedures necessary to comply with the regulations and reduce processing time. The aim should be a first pass collection rate of at least 90 percent. This is imperative to eliminate overdue payments in the 60, 90, and 120-day periods and limit all accounts receivable to the 30-day column.
#2: Engage with providers
Every problem cannot be resolved by a medical practice alone. It is important to engage with each payer directly to tackle problems faster. Most large payers have local representatives who are trained to resolve issues and anticipate changes. For example, the rep will know what changes will occur in filing procedures if there is an impending merger of two payers. Proactive management helps improve collections rather than waiting to resolve problems after they occur.
#3: Review AR cycles
A comprehensive bi-annual review of the AR cycle is the minimum, but at some practices, a more frequent review may be necessary. If your practice is experiencing high volumes of aging accounts receivable, a shorter review cycle may help identify possible problems.
#4: Enforce patient policies
Many providers gain control over their accounts management with strict due-at-encounter payment policies. Enforcing a no-excuses policy could consist of three statements, a 15-day grace period with a demand letter, and then sending the patient’s file to a collection agency. However, accounting staff at the practice should be trained to decide when pressing for payment is warranted and when an extension should be granted. A strategy to improve collections is necessary to survive in a fiercely competitive healthcare industry. To this end, your practice should:
- Post payment schedules in the clinic and on the practice website
- Educate staff and patients about payment policies
- Link credit cards with automatic payment authorization
- Collect insurance co-pay and deposit on balance at the first encounter
- Offer multiple payment platforms (web and mobile-based) and options (cash, cards, vouchers)
- Set realistic collection terms with 6 months to 1 year for repayment of balance
- Offer financial counseling before elective procedures
#5: Train staff
The staff at a medical practice should be well versed in the payer provided and online tools available to estimate the cost of specific services and verify deductibles. These tools allow practice staff to put together a balance report and clearly explain financial obligations to the patient. Trained staff are critical in improving collections at medical practices because they are able to discuss payment options with patients before they leave the clinic. This not only lowers accounts receivable, but improves the patient’s experience at the practice and enhances the quality of care.