In part one of our previous blog we discussed why the Accounts Receivable Report is so important. However the AR report is only a tool. There are many other factors affecting these totals which in turn affects your practice’s Centricity and EPIC Billing. In part wo we will take a look at some of those factors and evaluate some of the “Red Flags”
So what are Some “Red Flags” to Look For?
In the 0-30 day bucket, one of the factors that could influence the totals could be provider vacations. Having a couple of providers out of the office would account for a lower total in this bucket. But if that number is lower and your older AR stays the same, your days over 120 as a percentage will increase. In balancing these reports, you must take that into account.
Unresolved technical issues with Insurance. Is your practice having issues with a certain insurance company that hasn’t paid for whatever reason? This may leave claims to take two, three or ever four months because of some technical issue that hasn’t been resolved yet.
Appeals – which may take months to resolve. There could be multiple appeals, leading to a lot of insurance balances in the 120 or 151 plus days buckets. You’re still constantly working those claims, but they show up as outstanding. So your percentage and amount due may continue to increase but that may be OK.
Is your practice slow to refund patient credit balances? This could influence the patient AR. Common examples of such a credit balance would be when a patient paid a co-pay when they shouldn’t have, or they paid their bill twice. Credit balances can throw off your figures and make them look better than they really are.
Do you have a procedure for writing off accounts sent to collection? Some practices do not write off balances that have been sent to a collection agency. We follow a procedure that takes about 4 months in which patients receive two statements, a collection letter, phone calls and if after all these efforts have been exhausted without receiving payment, their account is forwarded to a collection agency. At that point, the balance is written off, which is proper accounting procedure. Some practices don’t do this, and their 151- plus day bucket becomes very large with money that will never be collected, misrepresenting the percentages.
In both Centricity Practice Solutions and EPIC, you can run reports in two ways: by date of service and by date of entry or transfer.
Patient AR should always be run according to when the patient become responsible. For example, you get an EOB 45 days after the date of service on which the patient was seen. The EOB indicates that the balance is assigned to the patient’s responsibility because of their deductible. The 45-day mark is when the patient becomes responsible, so the patient AR clock would begin at that time, placing that patient in your 0-30 day bucket. Then factor in any variables as discussed previously to give you a good picture of your accounts receivable.
Insurance reports should always be run by date of service. This will give you a true accounting of how long the insurance takes to be paid.
One last thing you’ll see on the report is a breakdown of the individual insurance companies. This gives you a good indication of which insurance company owes the practice the most money and which companies your practice should focus on to recover unpaid or denied claims.
“Gaming” the Accounts Receivable Report
One way some billers run the report to make the insurance AR “look better” is to run the report based on date-of-last insurance submission. Practice management systems can re-bill all or some of the old claims in bulk by setting the report parameters to last submission date instead of date of service. This, however, starts the clock over again, putting the old claims in the current 0-30 day bucket, thus making your AR reports look good.
But that’s not real. Make sure your reports are not being done this way.
As part of Health 1’s billing services, we offer a variety of customized reports for your practice that you can run at any time. If you need help with your analysis, give us a call.