Is what’s out of sight, ever truly out of mind? From the unopened pile of mail on the kitchen counter to the unpacked boxes that get carted to each new home, these items remain largely untouched and out of sight, but I’d venture that most of us wonder from time to time if it might be worthwhile to open that box, file or letter.
I can’t speak for you, or for your moving company, but I can guarantee that the accounts receivable (A/R) in your ASC – especially those accounts 120 days and older – IS worth a second look. In fact, I’d even be willing to place money on that guarantee. In one recent case, a second look at A/R starting at $1.4 million was reduced to $867,000 with just two months of full-time A/R recovery, and that’s just the beginning.
Most accountants will consider A/R balances more than 120 days old “bad” debt, but there is a very good reason to look beyond the standard 120 days of A/R to as many as 150 days – because no established ambulatory surgery center (ASC) should consider writing off money that can be collected to the benefit of the center’s bottom line.
Beyond boosting the ASC’s finances, a “clean” A/R also benefits an ASC’s evaluation. By knowing exactly where the ASC stands financially, there is an opportunity to potentially increase its value because current A/R is usually deemed collectable. This also provides the business office with the most up-to-date financial status of the ASC, allowing for effective management and the ability to set cash goals for growth today and in the future.
A/R greater than 150 days old carries a strong implication – there’s something wrong with the claim. This problem could be something as basic as a human error that requires correction, a billing company that never sent a statement or a statement didn’t reach the patient because of an incorrect or outdated address. No matter the cause, the process of uncovering exactly what caused the problem(s) can only be discovered through a series of thorough steps.
This investigative task is best assigned to an experienced collector who is patient and willing to search for answers starting at the very beginning of the process. The role may include sifting through stacks of files, reading previous appeals and comments, and looking for errors in multiple claims with the same or similar denials.
Working through Old Claims:
- Run an aging report
- Identify specific carriers or aging trends and high-dollar claims
- Investigate any state- and payor-specific requirements for the facility’s geographical area
- Review all documentation on the claim
- Correct and resubmit the claim or appeal
In most cases, the information required to recover old A/R exists, but it is connected to a claim that was never processed – or one that got “stuck” along the way, lost in the system. The collections retrieval process can be best compared to the studious work of a private detective – a methodical search for clues about why money was not collected previously and how it can be recovered in the most efficient manner.
The recovery process continues with a determination of the payors, knowledge of how many accounts exist and the average amount of money owed in each account. Once this step is complete, concentrate on a group of accounts with the highest dollar amounts and indicate which insurance companies are involved with those claims. This review process allows the collector to establish the most important aspects of the claim as well as identify any similarities among those accounts.
Finally, read the contract language. If the collector determines that a number of claims are missing the same information on the explanation of benefits (EOB) or finds another commonality among the claims, contact the insurance representative and ask for a review process for multiple claims with the same issue. If possible, provide the insurance company with a spreadsheet of all patients who have the same claim issues. By working directly with a representative from the insurance company to “short cut” the process, it’s possible to get multiple claims processed at once as opposed to processed individually.
Remember this initial phone call to the insurance company is the first of many calls that will be needed to resolve the claim, so work to build a relationship that can benefit the billing service and the insurance company. At this point, be prepared to offer the insurance representative the following information:
Claim Inquiry Information:
- Facility specifics
- Tax ID number
- Date of service
- Total dollar amount of claim
- Insurance plan name
- Policy number