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Dina Schardinger, Vice President of Operations Ginger McDonough, Director of Business Development

West Virginia HFMA Conference Ways to Manage Your Aged Accounts Receivable

September 29, 2016

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Objective: Ways to Manage Your Aged AR

This session will discuss ways to reduce your aged accounts receivable by promoting cash resolution, reducing bad debt expense, and transferring patient balances timely.

The use of claim scrubbing systems, 835 data, and timely filing guidelines help staff manage aged inventory by managing exceptions.

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Biography

Ginger McDonough •  BS in Healthcare Administration •  Over 30 years’ experience in the healthcare industry •  First healthcare job as ED Hospital Registrar •  Moved into Insurance Verification Supervisor and then

Patient Access Manager •  Became Patient Access/PFS Director •  Moved into vendor arena; Vice President of Business

Development 5 years ago

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Staffing Needs for a Successful AR

ü  Take the time to train your Billing and AR follow-up staff ü  Maintain a relationship with Coding and Patient Access ü  Ensure knowledge of payer contracts and payer

processing procedures ü  Use technology and automation when available to feed

accounts to the staff to work based on exceptions ü  Continued professional growth with CRCS (Certified

Registered Cycle Specialist)

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Work Flow Methodology

ü  Complete an analysis of your Aged Accounts Receivable by payer and by aging bucket

ü  Focus on having no more than 2% of your aged inventory in over 365 days and no more than 10% of your aged inventory in over 180 days and older

ü  Have staff focus on specific payers to ensure there is consistency in follow up and the staff can determine trends in reimbursement, denials and potential contracting issues

ü  Try not to assign more than 750-1,000 accounts per FTE to ensure that staff can handle the volumes and work through the inventory

ü  Complete weekly performance-based metrics to ensure you are generating cash, resolving inventory and reducing aged buckets

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Inventory Breakdown

Identify accounts at risk of exceeding payer filing deadlines. Make determinations on aged inventory, while focusing on claims that are getting ready to go timely. This includes first bills and appeal guidelines.

At Risk

Determine those accounts having the highest potential for collections. These accounts represent insurance and patient due balances which are neither at risk nor qualify for immediate write-off but are being held from payment due to a denial, request for additional information, or rebill request.

Evaluate all accounts with a partial payment to identify those that may warrant allowance, write-off, or patient transfer, in whole or in part, with no further formal collection activity.

High Probability

Potential Allowance Patient Liability

A tiered approach to working AR has proven beneficial as it increases cash collections, reduces bad debt expense, and resolves AR inventory quickly and efficiently.

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Receivables Management

ü  Manage clean claims, look for a rate of 95% or higher ü  Fix claim edits with 24-48 hours ü  Review acknowledgement/rejection reports ü  Follow up on accounts not paid within the first 14-21

days of bill, use claim scrubbing software for first touch ü  Follow up on denials, zero pays, and line item denials,

though the use of 835’s ü  Ensure allowances are posted correctly by maintaining

contract management systems ü  Manage credit balances through credit balance

vendors that get paid by payers ü  Ensure patient balances are moved timely ü  Determine trends in inventory by payers

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Insurance Process Map

Daily account placements loaded into the Aurora RCInet system

Staff Members’ Responsibilities•  Work a minimum of 50-60

accounts per day •  Choose a root cause for each

account referred•  Update insurance and rebill as

appropriate•  Send administrative appeals •  Post transfers, adjustments,

and denials•  Report denials and

underpayments to management for trending

•  Review contracts for underpayments; management captures trends in Aurora 
RCInet daily

•  Triage tended denials to new daily workflows

Daily 835 files imported to trend denials and implement into work flows

Accounts triaged into prioritized

categories 
based on 


payers and age

Triaged accounts then processed 
for proper work

flows to set priorities for staff

Work flows then distributed to team members by payer

& priorities

At Risk Approaching

Untimely

High Probability Billing &F/U

Adjustments, Patient Liability,

& Write-Offs

Zero Payments

Secondary 
or Patient Balances

Partial Payments

Acknowledgement sent daily —Reconciliations done weekly or monthly

Multiple scrubbing 
processes aid in reducing loss and maximizing collections – and ensure that ALL accounts are worked regardless of balance

•  Partial Payments with line item denials routed to denials team

•  Partial Payments without denials routed to contract review team

Medicare & MCare HMOs

Medicaid & MA HMOs

Blue Cross & Blue Shield

Aetna, Cigna, UHC

Workers Comp & Auto

Commercial Other

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Financial & Performance Metrics

Financial and Performance Metrics to track the project’s progress: ü  Daily collections – gross and net ü  Days in AR ü  Percentage of Inventory in aged buckets ü  Clean claim rate and account resolution ü  Percentage of write-offs, credit balances, and patient liability

transfers ü  Dashboard and productivity reports ü  Monthly narrative report with knowledge transfer and trends

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Questions

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Ginger McDonough Director of Business Development 540-842-5878 virginia.mcdonough@bolderhealthcare.com