Where are Your Physician Practice Receivables?
Do you know how much outstanding accounts receivable you have in your 0-30 day, 30-60 day, 60-90 day, 90-120 day and 120-plus day categories? You should know this off of the top of your head on a daily basis. Knowing will allow you to spot problems, quickly. Why is knowing so important you ask? Because, your businesses cash flow depends upon it.
The ideal scenario
Middle of the road
Those claims and denials are in the 60-90 day category, and at this point some of your appeal rights have passed you by. Yet, staff are still in denial that the claims will remarkably disappear off of their accounts receivable.
Teetering on the edge
Once claims reach the 90-120 day range, this is the area where you are passing timely filing deadlines. Oftentimes, insurance companies “drop” claims in the same batch as others. This means that they will pay a majority of the claims sent over, but miss a few other dates of service. This is one of their classic “delay tactics.” But if you continue to ignore those unpaid, and non-denial claims, you can better believe if you don’t catch them, a majority of payers will tell you that you didn’t send the claim to them in time, per your contractual agreement.
You can try to appeal using your clearinghouses proof of claim sent, but oftentimes it’s not worth the cost to appeal versus what you will be paid. The insurance company is banking on this decision.
Worst case scenario
Now we’re into the 120-plus day category. This is the most dangerous place for your unpaid claims to sit. Claims come here to roost for the long haul. It’s like the child that swears to you they’ll never move out. Most practices just let claims sit here and age out for years. Either work them, or adjust them off. Don’t let the 120 plus day category hold most of your company’s monies due.
An additional area to consider is patient balance, which are often allowed to age out unnecessarily. There are so many options when managing patient balances. At my firm, we have a policy that we send a patient a statement, and if they do not respond or pay their bill, we send a second statement. Still no response, we will send a third. If there is still no response, the patient then receives a 15-day pay or go to collections letter.
Oftentimes, this will prompt a phone call. Patients don’t always understand why they owe, and assume we haven’t billed their insurance plan. The phone call opens up dialog. We then either receive the full payment, or set the patient up on a payment plan. For patients who choose to ignore that 15-day letter, they get set up in collections, and their balance is adjusted off in the billing system. This is less than two percent of patients that we send bills to. It took a while to get this process under control, but now that it is, we have happier and more satisfied patients, more inflow coming in, and 95 percent of our accounts receivable sits in the 0-30 day category.
It’s very important that you manage your physician practice receivables on a daily basis so that any or all of the above scenarios do not play out with your accounts. Even if you have a third-party billing company, you can still manage your accounts maintain constant awareness. If you are not in-tune with your accounts receivable, sit down with your billing representative and start the conversation.