Let it go! The curse of “dead” A/R
Let’s talk about A/R aged over 90 days, or 120 days, or 365 days. How “aged” is too aged?
This is a common hurdle faced by many organizations hit hard by increasing denials and rejections from medical insurance payers: How should we effectively and efficiently manage A/R that has aged and is no longer collectible?
In this industry, we all strive to collect on every insurance dollar to provide the best possible financial outcome for our patients and our organization. Despite this effort, when A/R ages, decisions must be made to determine how to best liquidate “dead” A/R and focus collection efforts instead on areas that meet organizational objectives.
A successful roadmap to tackling the process of relieving “old and ugly” A/R can be achieved by incorporating the following steps into your A/R management model:
Data Driven Decision Making Use data to capture the “why” of appropriate liquidation. Drilling down on payment trending to determine when return on investment (ROI) is low is essential. If it costs more to continue efforts to collect on insurance A/R, the best business decision is to liquidate and reallocate resources to more collectible A/R. Data analysis lends insight about operational challenges and downfalls. It is the catalyst to deciphering which areas of the organization are performance outliers as well as to initiating the evaluation of why A/R is aging more aggressively across a specific payer or billing area.
Communicate Payment Barriers Many parties within an organization are keenly interested in determining why their insurance claims are not being paid or being paid in a timely manner. Often, there is push back about the appropriateness of liquidating aged A/R. Validating the reasons for liquidation across all parties with a stake in the process will aid in a cohesive understanding of how improvements can be made to increase collections and decrease A/R days. Highlighting performance shortcomings within all areas of the organization encourages ownership of operational challenges and intensifies commitment to resolve those challenges.
Deploy Mass Adjustment Tools Deploy mass adjustment programs within your billing system. Relying on manual liquidation endeavors takes away from follow up time better spent on more collectible, less aged A/R. Tailor adjustment routines to accurately reflect payment barriers. This will further highlight areas within the organization that are responsible for why A/R is aged and non-collectible, and it will provide incentive for those areas to improve.
At the end of the day, a consistent, strong revenue stream is essential to the process of providing the best outcomes for patients and organizations. Learning and growing from the lessons found in aged, non-collectible A/R is often an overlooked and neglected area of the A/R management. Despite the difficult and uncomfortable discussions that must take place as a result of letting go of “dead” A/R, the lens of performance that is produced can often be the most helpful way to determine how to overcome payment barriers and exceed operational objectives.