4 Common Mistakes That Can Inflate Your Practice’s A/R

​Medical practices experience high accounts receivable for one reason: Patients and insurance companies are not paying in a timely manner. 

Let's look at four red flags that suggest your A/R is higher than it should be...

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4 Common Mistakes That Can Inflate Your Practice’s A/R

How to Avoid Claim Denials, Errors and
Unnecessary Write-Offs

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Medical practices experience high accounts receivable for one reason: Patients and insurance companies are not paying in a timely manner.

 

Did you know that whenever a patient bill has been outstanding for more than 90 days it’s worth less than half of its original value? High A/R is one key indication that improvements need to be made to your practice’s overall revenue cycle.
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Here are a few red flags that suggest your A/R is higher than it should be: 

Avoidable Claim Denials

A recent survey by Harmony Healthcare indicates medical claim denials are at an all-time high. According to the American Academy of Family Physicians (AAFP), the average denial rate for health insurance claims is 5% to 10%. If your claim denial rate is hovering near the 10% “danger zone,” it’s time to investigate.
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Denials occur for a number of reasons, but the most common are:  

• Failure to submit for pre-certification
• Inadequate information
• Coding errors
• Missed deadlines
• Duplicate billing
• Failure to verify coverage, and
• Medical necessity denials.

​The vast majority of denied claims (and lost revenue) are avoidable with the appropriate procedures and staff training. Even medical necessity denials can be appealed by properly trained staff, further reducing revenue loss. ​

Inadequately Trained Staff

A well-trained staff is your strongest line of defense for preventing high accounts receivable. This requires a two-fisted approach: 1) hiring only those who are most qualified and then 2) providing them with ongoing education, as needed.

Staff members who don’t understand revenue cycle management are likely to make billing and coding errors. They may also forget to verify insurance or fail to educate patients on your payment policies.
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If you’re unable to train or hire qualified staff, you’ll want to consider outsourcing your revenue cycle management.

Low Collection Rate

A low patient collection rate can occur from both inadequate collection procedures and a general failure to prioritize collection efforts.
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Here are a few ways to improve a low collection rate:

• Encourage time-of-service payments.
• Keep patient credit card information on file.
• Update patient billing information during every office visit.

The Precertification Predicament

It's been estimated that up to 80% of denied medical claims are due to failure to obtain proper precertification.

 

But obtaining precertification for services can be tricky. Payer rules can change unexpectedly. Medical claims managers may simply be unable to keep up with the changes and additions to the precertification rules for the numerous and varied insurance payers.

 

On the other hand, if not obtained properly and in a timely manner, the insurance company will not pay, and the provider must try to obtain certification retroactively. This can be a long and tedious process of denials, appeals and reviews – all for a payment that may never be received.

 

If your practice is struggling with the ever-changing landscape of payer precertification, it’s time to call in the cavalry. RFS offers a comprehensive menu of patient access services, including insurance verification, precertification, and preauthorization for recommended medical procedures.

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• Thoroughly explain insurance benefits and financial responsibility to patients, and offer to negotiate a payment plan.
• Analyze financial reports at month end to identify problems.
• Train staff members on proper collection procedures.

With the recent increases in high-deductible health plans (HDHPs), it’s more important than ever that patients be educated on their financial responsibilities. Staff must be trained to effectively communicate this information to patients.
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If your staff’s collection rate is consistently subpar, you should consider retaining a first-party, early-out revenue cycle management service.​

Unnecessary Write-Offs

You can improve your revenue cycle performance by regularly reviewing write-offs for errors.
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Make sure your staff has easy access to your fee schedule and the reimbursement schedule from each primary payer, so they can closely monitor contractual write-offs. On the other hand, non-contractual write-offs are often avoidable (such as filing a claim past the payer deadline, or administrative errors).

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A monthly review of reports for both contractual and non-contractual write-offs can help you make significant revenue cycle improvements.

​We Can Help

​When you partner with Reliant Financial Services, you set in motion a process to reduce your overall accounts receivable and improve your cash flow. You’ll notice remarkably fewer denied claims and overdue accounts. Put us to work for you! 

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Sources:
Featured Image: Adobe, License Granted
RevCycle Intelligence
Change Healthcare
American Medical Association