Clean up your receivables as patients pay more

Some new approaches to collecting what you’re owed in the changing reimbursement landscape.

By Jerry Helzner, Senior Editor

Effectively managing accounts receivable and generating cash flow is the lifeblood of any medical practice. However, a sea of change in health insurance coverage is putting more of the payment burden on patients and causing practices to adapt their collections procedures to the new reality.

HIGH DEDUCTIBLES

Confusion from exchange plans

Deductibles on all types of health insurance policies have been climbing at a rapid rate over the past five years. Under the Affordable Care Act (ACA), this trend has only increased as many plans have been offering lower monthly premiums in exchange for higher out-of-pocket costs for the insured. The extent of the problem is dramatically illustrated by a new Medical Group Management Association (MGMA) survey of 700 medical practices.

Seventy-five percent of respondents cited high deductibles as one of the major problems with ACA implementation. Among the issues with patient cost sharing are patient confusion over their own payment obligations and the inability of practices to obtain accurate information regarding the cost-sharing elements of the exchange plans. What’s more, practices report that patients are canceling or missing appointments when they are apprised of their significant out-of-pocket costs.¹

Employer-provided policies

The trend toward high deductibles is not confined to exchange plans. It also is being felt in employer-provided policies. According to information compiled by the Kaiser Family Foundation, the average individual deductible for all employee health-care plans has risen from $735 in 2008 to $1,335 in 2013. In addition, 15% of all insured employees had to pay the first $2,000 of their health-care expenses out-of-pocket in 2013, compared to just 5% in 2008.²

This means that medical practices are facing the more difficult task of collecting larger amounts directly from patients rather than insurers. Yet, as this responsibility shifts from the third-party payer to the individual, some ophthalmology practices may be letting these payments go uncollected. This article will offer a number of concepts practices can put in place to maximize collections in an ever-changing healthcare reimbursement environment.

ASSESS RECEIVABLES

Determine their overall age

Mark E. Kropiewnicki, JD, LLM, president of the HealthCare Group in Plymouth Meeting, Pa., is a consultant to a number of ophthalmology practices. He says a first step in improving collections is to conduct an assessment of your current receivables situation.

“Determine the overall age of your receivables,” he advises. “Medicare pays quickly, between 15 and 21 days usually, so if you have a significant percentage of Medicare payments, the overall age of your receivables should be 30 days or less.”

Mr. Kropiewnicki calculated the overall age of the receivables for two of his client practices and found one was 25 days and the other 21 days. He says the overall age of receivables is a good benchmark for evaluating the efficiency of your collections process.

THIRD-PARTY PAYERS

Identify slow payers

Next, Mr. Kropiewnicki suggests you take a look at the insurers you deal with and determine the age of the receivables for each individual payer.

“The first thing you must do is get in touch with each insurer that is slow pay,” he says, “because your practice may be doing something wrong in submitting claims, and you need to find out if that is the case. If communication with the insurance company doesn’t help, you may be dealing with an insurer that is going to be chronically slow pay despite your best efforts. Then, you may want to decide if it is worth it to stay with that insurer if you are going to have to wait 60 days to get paid.”

Follow-up procedures

Mr. Kropiewnicki says practices should conduct a review of their procedures for following up on aging claims, because delays in pursuing payment can make collections more difficult.

“A lot of practices tend to be haphazard in dealing with aging accounts. Follow-up should be automatic and immediate,” he says. “You may have different collection steps that quickly go into effect at the 30-, 60- and 90-day marks.”

Mr. Kropiewnicki says solo and smaller practices tend to be more lax in following up on aging accounts because they lack the staff to devote to swift action.

“You are not going to be effective in collections if you follow up ‘whenever we get around to it,’ ” he says.

Focus your efforts

If you do not have a large enough billing staff to pursue all aging claims aggressively, follow the advice of Courtney Endicott, head of billing and collections at Silverstein Eye Centers, Kansas City, Mo. She recommends focusing on claims that are 31 to 60 days old “because these claims are still well within the window for insurance reimbursement.” She says that, because Medicare pays quickly, you can begin follow up on those unpaid claims at about 21 days.

COLLECTING FROM INDIVIDUALS

Get paid up front

The 31-to-60 day window can also apply to money owed directly by patients. Slow follow-up diminishes your chances of collecting anything owed to the practice by an individual. But there is a way to avoid patients owing large balances to the practice: obtain payment at time of service.

“Check patient insurance benefits before surgery and large procedures,” says Ms. Endicott. “Then collect co-pays and deductibles in advance.”

Benefit verification

Carrie Clark, director of revenue cycle management for Barnet Dulaney Perkins Eye Centers in Phoenix, confirms that the practice is seeing more patients whose health insurance entails higher co-pays and deductibles.

“It’s not so much the co-pays, but the high deductibles often make the patient responsible for large amounts of money,” she says. “It is more difficult to collect from patients directly. With insurance companies, you know you will eventually get paid; with patients, that’s not always the case.”

One outside service Ms. Clark finds invaluable is a company that verifies patient benefits and eligibility. By using benefits information the vendor provides and matching that to the medical services the patient is getting, the practice knows what portion of the bill insurance will cover and how much the patient will need to pay directly.

“We use Clearwave,” says Ms. Clark. “By knowing the amount the patient will owe, we can collect it at check-in. If the doctor finds that the patient requires additional services, we will collect that money at checkout.”

Clearwave says its proprietary technology enables it to verify patients’ demographic and eligibility data to ensure accuracy as well as share this data among an organization’s existing platforms and between different organizations. The company says the resulting benefits are increased cash flow at time of service, lower collections costs and fewer claims write-offs.

Other companies that verify patient benefits and eligibility are the Passport division of Experian, Emdeon, Outsource Strategies International, Nextech and Allegiance Global Services.

Benefits verification and Medicare

One caveat: Ms. Clark has encountered patients who have Medicare coverage but no “gap” policies to pay the 20% of their bill that Medicare does not cover. “This is where benefits verification comes in,” she says. “We will know who doesn’t have a gap policy and collect that other 20% at time of check-in.”

Patient financing as an option

Ms. Clark notes that with greater payment burdens now falling on patients, the practice finds that more patients are candidates for financing.

“We are seeing more patients taking advantage of the financing option,” she says. “In addition, we will sometimes work out a monthly payment schedule for a patient who is short of ready cash but who wants to work with us. If a patient refuses to communicate over a period of time, the bill goes to collection.”

CRAFTING A COLLECTIONS POLICY

First, build your team

A key to successful collection policies is creating a knowledgeable collections team that can take swift and persistent action to deal with aging receivables and slow-pay insurers. “You need to have a bulldog running your billing and collections department,” says one ophthalmologist whose practice has a high success rate with collections. “Some practices are too quick to write off claims when persistence would have paid off with at least a partial or monthly payment.”

A clearinghouse partner

Almost all medical practices now use clearing-houses to file claims electronically, receive payments and correct and resubmit denied claims.

“We look at our clearinghouse, Navicure, as an extension of our team,” says Ms. Clark. “They communicate with the insurance plans and keep us updated with plan changes on a weekly basis. Our clearinghouse has been consistent in identifying why a claim was denied and then in resubmitting it.”

According to the American Medical Association’s 2011 National Health Insurer Report Card, commercial health insurers process one out of five medical claims inaccurately. While clearinghouses do not chase down delinquent payers, they can offer a quick and efficient appeals process for denied claims. For example, Navicure offers prepopulated appeals letters, customized appeals and additional supporting documentation for a denied claim.

Train billing staff

The in-house billing and collections staff must be well trained in using the correct coding and modifiers that ensure prompt payment.

“Understanding appropriate coding and modifiers helps assure full reimbursement, which generates increased revenue for the practice,” says Ms. Endicott. “If a non-payable claim is the fault of the office, get it off the books, and move on. Learn from mistakes, but don’t leave uncollectable debt on your books.”

Rotate problem claims

Ms. Clark says that one mistake many practices make is assigning billing staff to certain doctors or certain insurance plans.

“We break up our accounts by alpha of the last name of the patient,” she says. “This gives every doctor the benefit of a seasoned billing staff member, and each billing staff member is cross trained with all of the insurance plans. We then switch up the alpha that the billing staff is handling every four to six months. This allows for continuous training and helps get older claims resolved by having a fresh pair of eyes looking at it.”

Ms. Clark adds, “It’s more of a total team approach. Sometimes, a more experienced staff member can immediately see where the problem is with a claim.”

The benefit of an aging patient base

“Medicare is one of the best payers,” says Ms. Clark. “Once you understand just what Medicare wants, you should have no problems in getting paid promptly. Two of Medicare’s best features are the consistent flow of helpful updates and an informative website.”

Because Medicare guidelines influence most commercial payers, understanding Medicare’s “multiple surgery rule” is a must for a practice to receive full reimbursement for each procedure billed,” Ms. Endicott says.

“Be sure surgical procedures are appropriately identified and submitted in the correct order with appropriate modifiers for the greatest reimbursement,” she says. “Check carefully for when units must be captured to code appropriately. Proper coding using the multiple surgery rule can make the difference in hundreds or thousands of dollars being reimbursed.”

Persistence pays off

In maximizing collections, the “bulldog” approach of pursuing payment in a proactive and timely manner until the situation is resolved tends to bring the best results. That can mean pursuing aging claims vigorously instead of writing them off, making repeated telephone calls to slow payers and, sometimes, negotiating a bill down to obtain at least some payment.

“This is money that the practice has rightfully earned, and it is entitled to full reimbursement,” says Mr. Kropiewnicki. “Being lax or inconsistent in collections policies is a sure way to lose important revenue.” OM

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