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Goal: Reducing Hospital Accounts Receivables

Reducing Hospital Accounts Receivables A Primary Goal for Revenue Cycle Teams
Reducing hospital accounts receivables is a huge factor in speed to revenue recovery.

Billing errors are an ongoing headache for hospital revenue cycle management teams. Working toward the goal of reducing hospital accounts receivable generally starts with reducing billing related errors, then following through with payers to best present billing claims.

In an article about four common medical billing errors at Revcycle Intelligence, the scope of the problem is laid out well: “The medical billing process can be a pain point for some providers because it involves an array of healthcare stakeholders and each step to getting paid relies on the previous interaction. Healthcare organizations must communicate across departments and payers as well as ensure that crucial information is properly captured in each step of the process.”

A Healthcare Finance article takes a closer look at accounts receivables, where, “days in accounts receivable measures the amount of time between patient discharge and when payment is made. This directly impacts cash flows for the facility.”

Sean McAleer, senior director of revenue cycle operations at NYU Langone Medical Center in New York City is then quoted, explaining, “the quicker the turnover in your accounts receivable, the less cash you have to find somewhere else. More to the point, it is the metric we use to monitor how quickly insurance companies process claims and pay the cash we are owed.”

Revint works with client hospitals and health systems to review and implement solutions for billing related challenges and a/r (accounts receivables) challenges as part of our larger scope solutions for speedy revenue recovery. Here is some additional advice from the industry for reducing a/r days:

  • Reducing Hospital Accounts Receivables: Check Insurance Availability Up Front –  An article in Medical Economics explains that, “this data includes, for example, not just whether the patient has coverage, but how much of the deductible has been used up and even if the policy is in danger of suspension due to nonpayment of premiums. Ideally, practice employees communicate (and potentially translate) this information to patients before they come to the office for an appointment.” The problem with this, “if patient insurance eligibility is not being verified or we’re not connecting with the patient prior to them presenting to the office, it creates a massive amount of work on the back end to try and resolve open AR or open claims,” says Stephanie Davis, director of revenue cycle management for Halley Consulting Group in Ohio.
  • Reducing Hospital Accounts Receivables: Inexperienced and Untrained Employees – Although training might be costly and time consuming, it can save a healthcare organization money in the long run. Coding errors can equate to medical error, which cause unnecessary spending. For example, in 2015, twenty-three hospitals in New Jersey paid a $500,000 penalty for medical errors,” according to another article in RevCycle Intelligence. The article continues, observing, “If healthcare staff members are not trained effectively, they might not bill correctly or capture patient data correctly. Healthcare staff who are responsible for billing need to know how to properly capture a patient’s demographic information on the front-end, and how to translate that data to successful insurance claims after that. Coding staff should complete a 60-hour long training session in four hour increments in order to learn how to code effectively. A well trained staff can reduce billing errors and make the whole process of billing more efficient.”
  • Reducing Hospital Accounts Receivables: Understand Your Payer Mix –  As the Healthcare Finance article states, “One of the variables tracked as part of A/R days planning is your payer mix. You need to have a good handle on which payers cut a check sooner than others.” This tracking pays off. “Insurance payment is absolutely the biggest part of what we do and what we manage,” said Wesley Smith, vice president medical center finance, revenue cycle operations at Langone. “We have payment goals based on our experience with the major payers. From this history, we know we should be getting a certain amount of money each month. If we don’t, we have metrics in place to find out where the issues are.”

Understand your payer mix. Train employees. Check insurance availability. It’s solid advice. This takes a team effort, which is an approach Revint has seen succeed at over 1,600 healthcare organization clients in the U.S.