If you suspect your existing billing solutions service or internal business office isn’t managing your accounts receivable well, you are likely concerned about uncollected revenue. Perhaps you recognize that acting quickly may allow your facility to recover lost income.
To obtain the objective data you need to make an informed decision about next steps, enter forensic collections mode. Your goal? Leave no stone unturned.
During your search for this potential uncollected revenue, include these activities:
- Analyze the A/R and payor mix. Look for sizable changes or significant swings in outstanding balances. Ensure you thoroughly examine patient balances.
- Investigate write-offs including bad debt adjustments. Are the write-offs consistent with the reimbursement terms outlined in your payor contracts?
- Examine billed charges. Review payors being billed. Are your secondary payors being billed after the primary payors have paid?
- Inspect implant billing and reimbursement. Compare the results to your contracts. If separate reimbursement is allowed for implants, are you billing them accurately and receiving full payment?
- Determine when the last fee schedule increase occurred. Are your billed charges keeping pace with your contractual reimbursement?
Here are a few examples of what my team and I have discovered while in forensic collections mode.
- Our analysis of workers’ compensation claims revealed payments equaled 100% of billed charges. This rarely happens which lead us to dig deeper. We compared the state’s work comp fee schedule to the facility’s charge master. The state’s fee schedule was much higher than the facility’s charge master which hadn’t been updated since 2006. We promptly notified the payors (per their contract requirements) that an increase to the facility’s fee schedule was scheduled to take place in 30 days. Consequently, the facility realized an immediate increase in work comp revenue.
- A review of Medicare claims revealed when a secondary insurance was active but not being billed. We queued up all claims within timely filing and billed them to the secondary payors. The results were an increase in payments to the facility, a decrease in bad debt, and correction of balances erroneously being transferred to patient responsibility.
- We reviewed ortho cases where implants were being used. Our analysis revealed the facility never billed for implants. We discovered facility personnel knew their contracts allowed for implant reimbursement when claims were filed with supporting documentation. However, they were unable to obtain implant invoices from their hospital partner thwarting their efforts to pursue payments on implants.
- A review of patient balances revealed patients had not received statements in more than seven months.
- In our review of claims denials, we discovered claims were never appealed. Payor payments were merely accepted. The balances between the billed charges and the allowed charges were written off without first confirming their accuracy with the contract terms.
- When changing patient accounting systems, a facility turned their entire A/R over to a collection agency. If they had opted to work that A/R themselves, hundreds of thousands of dollars could have been easily collected.
- Facility contracts were not loaded into the patient accounting system. With each passing year, contracts and fee schedules changed but the cash poster’s memory did not. Explanation of benefits (EOBs) were not compared to contracts. Amounts received were accepted, correct or not. Remaining balances were written off. Credit balances were never refunded.
The examples go on and on. It doesn’t have to be this way. Audit early and often. Be willing to dig a little to uncover potential problems and fix them. When you do, your reward is a nice increase in your net revenue per case and happier investors!
Carol Ciluffo – Vice President of Revenue Cycle Management
