Volume VIII Number 1
|The Newsletter of
D E K A Y E Consulting, Inc.
231 Oakview Avenue
Focus and Intensity: A/R Critical Success Factors
By Allan P. DeKaye, MBA, FHFMA, President and CEO, DEKAYE Consulting, Inc.
For those who are responsible for A/R Management, the monthly challenge of "meeting and exceeding" expectations should not be left to chance. I am often asked to help providers attain an increased cash flow position, which in turn lowers A/R. Easier said; harder to achieve. For the most part, there are two elements that should be considered "critical success factors." They are "focus" and "intensity." Let me explain what they are, how they work, and why they are important ingredients of a successful A/R Management Plan.
Defining "Focus" and "Intensity"
Creating the Focus
In today’s healthcare environment, provider and payer are often at opposite ends of the payment spectrum. In theory, healthcare claims–"clean" and electronically submitted, should be paid within contractual or regulatory time frames. In reality, not as many claims as providers believe are "clean," actually are. Payers, too, are not above reproach: more often than not, there is no credible reason why payments are not timely and accurate. With this as the larger reality, providers need to realize that they must take certain actions to refocus efforts to deal with this "new" reality.
One area about that should be scrutinized is the deployment of staff. All too often, we see the same staff both "billing and conducting follow-up." And although this might sound appealing to have a special payer unit (or staff) for each payer, this will not get the job done.
The "focus" is created by having dedicated follow-up staff who are in "hot pursuit" of the open claims. Whether it is one, two, a few or many, the management team sets the focus by determining which payers:
Have the greatest propensity to pay (e.g., Medicare should pay an electronically submitted clean claim within 14 days; and a contracted commercial/HMO payer may have contractually committed to a 30-45 day payment cycle, and your state may have passed a "prompt pay law" mandating that clean claims be paid in "X" days);
Represent a significant portion of your business or outstanding A/R (and when they are one in the same, this condition should be viewed as a "danger sign");
Utilize electronic or telephonic technologies to support electronic billing, claims tracking or inquiry status, eligibility, etc., and/or provide Internet access to provide this information; and
Contribute a disproportionate number of pended or denied claims.
The payers who share these characteristics should make up the "core cash flow contributors." Without these payers’ remittances, providers will have a hard time meeting (or exceeding) their monthly cash flow goals.
Commensurately, sufficient resources need to be assigned to conduct effective follow-up efforts. While "resources" is generally construed to be "staff," they can also include sufficient numbers of PC’s with Internet access to facilitate electronic claims inquiry and electronic eligibility requests from those payers who provide this access. Additionally, the ability to produce "targeted A/R" reports that can sort open accounts in descending balance order, or in a format suitable to send to a payer for their research and advice is also a plus.
Staff productivity and effectiveness cannot be over-emphasized. Supervisory review to ensure that optimum levels of accounts are being "worked" with definitive outcomes is essential. For example, if payment cannot be confirmed (i.e., "the check really is in the mail"), or a "promised payment has already been approved with a definitive payment date," then the staff needs to know what actions it can and should take to ensure that the claim is adjudicated.
What is "intensity?" It is the force with which you strive to exceed your objective! This force should be both individual and collective. It is a state of mind, as well as a characteristic of one’s "work ethic." It is evidenced in the approach to resolving each open account, and lowering the investment in any payer’s A/R.
Intensity starts at the top, and should be part of the CEO’s and CFO’s support and confidence in the Patient Financial Services departments ability to overcome obstacles, resolve issues, and exceed cash goals. This support is not just "cheerleading," but should be tangible in terms of resource availability–when demonstrated, interdepartmental directives–when needed, and guidance when sought.
At the department head level, "coaching" (sometimes read: "coaxing," "cajoling," or "co-opting") is necessary to motivate and lead the staff (or "troops") into battle. The battlefield could be the trial balance, the information system, or even a visit to a payer’s headquarters–especially when a payer has either not honored the payment terms of its agreement, or if the non-payment of "clean claims" is "arbitrary and capricious."
If intensity is a state of mind, then everyone on the staff should be of that mind set. The ability to have everyone on the same page of the play book can result in a more concentrated effort that produces discernibly better results.
While "focus" and "intensity" alone cannot carry the day, it will be hard to achieve your goals and objectives without them. When taken together, they help form a "can do" attitude among the staff. This increase in esprit de corps should translate into targeted performance that is evident in staff’s understanding and execution of its tasks. Mission Accomplished!
: Ask The Expert
by Allan P. DeKaye, MBA, FHFMA
Q: We are having problems with verifying MSP information for patients who receive recurring services. Other than getting new questionnaires every month, what can be done to verify this information and show an audit trail to prove that the information is no more than 30 days old?
A: While having the questionnaire automated on your registration/patient accounting system would go a long way to solving the concerns raised, you will need to keep in mind the following.
For hospital outpatient visits, the MSP questionnaire must be completed for each visit, so it would be prudent to re-visit the "monthly" attempt at securing the questionnaire Obviously with a manual system this will present logistical problems such as: should we get it on the first visit or last visit of the month, what if the patient only comes once this month, etc. Therefore, getting it every time takes the guess work out of the process.
Why not consider the following. First, while the hospital needs to demonstrate its understanding of the rules (as usually stated in its Compliance Plan), why not incorporate the questionnaire process as part of a financial screening process. You can use the opportunity to remind the patient how the facility is working to ensure its compliance (which is a good thing). Given that there seems to be a preponderance of psychiatric patients, why not enlist the support of Social Services and/or the Psychiatrists themselves to help ensure that the facility is adhering to the rules.
You are correct in documenting your efforts to secure data (even if it proves futile), and by incorporating these tasks into "an every visit" regimen, you may be better able to demonstrate the continuity of working to obtain that data. If you have a central registration area, this task will be simplified by setting up a patient MSP file. If decentralized--obviously a more difficult process--but consider using the questionnaire formatted in a Word/WordPerfect file that could be emailed between location as the basis for quasi-automating the process--assuming you have a secure Intranet/Email system.
Q: Relative to "time of service" payments, what can we do to increase collection?
many providers say they "collect at time of service," in reality, they may have
omitted several key elements. The following are "key elements" of any program:
1. Create patient expectation that payment is required (e.g., signage, literature, brochures and pamphlets, etc.). Establish a written policy, have it approved by the Board, and promote it through staff training and patient communication)
2. Be able to generate a demand bill (patients won't pay if you can't give them the price and a bill)
3. Provide convenient places to pay (cashiering stations nearby service areas)
4. Accept alternatives to cash (e.g., check, credit and debit cards, electronic payments, etc.)
5. Enforce payment of managed care deductibles and co-payments
6. Where appropriate, have a "deferral of service" protocol.
For more information on this topic, go to our web site to see the following references:
The Patient Accounts Management Handbook (Aspen) by Allan P. DeKaye, MBA, FHFMA has a several chapters on this topic, including "The Impact of the Admitting Process on the 'Cash Flow Cycle,' " and "The Self-Paying Patient." Our OnTarget newsletter also discusses this issue of Collection at the Time of Service in the October 1998 issue.
can we do about billing and collection vendors who want to charge fees for
A: A recent inquiry suggested that billing and collection vendors should absorb the costs of working accounts that have no payout because they often collect on accounts where the hospital may have done the work, and payment occurs just after referral.
Hospital business offices often refer "valueless" claims to their billing and collection vendors. Why? They're old, have small balances, and usually because the hospital didn't work them for any number of reasons.
So why should you expect the vendor to do it for nothing? In fact, the effort they expend will demonstrate that "a last ditch effort" was made, or it may result in obtaining the needed EOB that is needed to bill the next payer. It is not uncommon for vendors to accept this type of work, but in effect–not work it. Because there is no return! Then they send it back uncollected, and maybe the hospital finally writes it off.
While these comments should not be construed as a "pro-vendor" response, it does raise what I call the basis for negotiating better agreements that spell out the scope of work, and expectations regarding performance and fees. When cases are perceived as having no value, or need the documentation afforded by the "zero" EOB, why not develop an administrative fee for those cases. If the vendor accepts the work (which I suspect many will do because they know it is an accommodation) at least they'll be able to recover the cost of postage or electronic mail, and perhaps a follow-up action–knowing in advance that an administrative decision is the likely outcome. These "close-out" accounts need to be differentiated from the legitimately referred account that doesn't get paid for a variety of substantiated reasons. That is the real risk the vendor should be asked to take–not collecting on a collectible account. It's almost like trying to write-off a bad debt to charity. You can't if you had the expectation was that the account should have been paid.
The importance of differentiating this type of work will help the provider negotiate better pricing to recognize when true backlog relief is needed as opposed to special clean-up projects.
Health Care On The Web
Recent Health Care press releases:
HHS TO POSTPONE IMPLEMENTATION OF OUTPATIENT PROSPECTIVE PAYMENT REGULATION
CMS: REPORT DETAILS NATIONAL HEALTH CARE SPENDING INCREASES IN 2000
CMS: CMS GIVES NATIONAL COMMITTEE ON QUALITY ASSURANCE AUTHORITY TO ACCREDIT MEDICARE+CHOICE ORGANIZATIONS
OF TOM SCULLY, ADMINISTRATOR CENTERS FOR MEDICARE & MEDICAID SERVICES ON
MOTION TO STAY PROCEEDINGS IN FEDERAL COURT CONCERNING MEDICARE-ENDORSED RX DRUG
DISCOUNT CARD INITIATIVE
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