You should look always be looking out to see if the accounts receivable are getting older. This is called bracket creep. If the accounts are getting older, the office may have a collection problem. The practice may not have a procedure for receivables collection or, if it does, the office staff may not be following it. It could also mean the office is understaffed and may need to hire someone to help with the billing and collection.
The following worksheet headings can be used to analyze accounts receivable and the associated bracket creep.
When you review this worksheet, make sure that the accounts receivable are not getting older as the months pass by (i.e. bracket creep). If they are, this will alert him or her to any receivable-related problem that might need immediate attention.
You should also review the aging of the accounts receivable by insurance class. The receivables can be aged by such classifications as Medicare, Medicaid, commercial insurance, and managed care. Most good medical billing software systems should be able to produce such a report. The purpose of this review is to determine if the practice is having trouble collecting from a certain payor, such as Medicaid, for instance. This process allows the office to identify a specific collection problem with a specific payor and to take immediate corrective action.
For example, a practice electronically bills all of its Medicare-related charges. Typically, payment turnaround on an electronically filed insurance claim in the practice’s state is 22 days. The aging worksheet shows $162,000 of Medicare-related receivables that are more than 90 days old. This obviously should not be happening if the claims were filed correctly and if Medicare patients were paying their co-payments on a timely basis. You will need to investigate the reason for this problem.
Besides printing an aging-by-payor class, you should see if the computer can produce a similar report by specific payor. Such a report will show you an aging for specific insurance companies, such as Prudential, Blue Cross/Blue Shield, Aetna, Pacificare, and so on. Again, this report allows the office to address a collection problem with a particular insurance company.