Aging claims may not have been touched for a long time, but why?
Sssh, listen. Do you hear that?
Your aged A/R is trying to tell you something. Almost every organization has a bucket (some substantial, some negligible) of aged A/R. That’s not a good thing; even if you rebrand it and call it vintage A/R, or if it’s really old, you may have some classic A/R on your hands, the trouble is, unlike a car or coveted 80’s fashion items, those older claims are not bringing in any revenue.
If your healthcare organization has a problem with older claims that have become unviable and are sitting on the books awaiting write-off, it’s definitely worth figuring out what led to the issue, then making the necessary changes to prevent A/R from aging. It takes work to dive in and investigate deeper why and how those claims became aged, but don’t ignore what those claims are telling you.
Acquiring complete and accurate patient information from the outset is imperative and affects everything downstream on the revenue cycle. We’ve emphasized the importance of front-end operations from the perspective of the patient financial experience, but it holds true for all aspects of the revenue cycle. Ensuring that precise demographics are entered and the correct insurance information is recorded in the system alleviates a significant percentage of claim issues. If registration information is incorrect or missing, the claim will often hit an edit before it is sent to the payer. While edits are a great fail-safe and strongly encouraged, you will save time if the information is entered correctly from the get go.
Some provider organizations refer to claims in the early stages as ‘Pre A/R’. A/R can include charges that are entered into the system but claims have not yet been sent out. The first goal is to get claims submitted as quickly as possible so you’re not holding charges. It starts with properly credentialed and enrolled providers, moves to timely signed notes, then to accurate and thorough medical coding, and then to effective charge entry.
In general, the best way to prevent aged AR from turning into adjustments is to make sure the oldest dates of services are being prioritized and worked accordingly. Here’s how your business office can get organized to prevent aged A/R issues.
Check staffing ratios: Analyze how many employees you have working claim follow-up versus the total volumes of claims your organization processes weekly, monthly or yearly and divide it out. Typically, you’d want an average of 3,000 accounts per employee. If you’ve got way more accounts than staff, you may need some help. If that is not an issue, it may be a productivity concern. Set a standard for the number of claims that need to be worked per shift and make adjustments as necessary.
Assign designated staff to each payer: If you have the appropriate staffing level and those employees are meeting their productivity goals, yet you still have claims that are not being worked cleanly and getting reimbursed by payers, then the problem may be strategy. This is where it is worth some analysis and good old-fashioned trial and error. One of the best ways to sort A/R is by payer. Assign each staff member a different payer to work—commercial, Medicare, Medicaid, etc. Instead of everyone working whatever accounts fall into the queue, create a clear assignment to give each employee a chance to learn their assigned payer’s intricacies and issues, making the claim follow up more effective.
Implement a smart work strategy and sort claims by denial type or by procedure code: High dollar claims are top priority, but if your employees are only working those claims, they are missing opportunities to identify trends and work similarly pended or denied claims en mass. This is a key point when small dollar claims start to build up. Instruct staff to sort by procedure code or denial reasons and take a look at all of the claims that were denied similarly. Resolving a whole gaggle of claims that need a simple correction all in one go is ideal. It also becomes apparent quickly if there is a reoccurring issue that needs resolution, such as building in a system edit to catch the error prior to the claim being sent or an educational opportunity.
If you’re willing to listen to your aged A/R, you’ll be taking the next big step toward improving performance. That “listening” step is one that many revenue cycle leaders might not have time to complete. They may ask for help in the form of trends analysis.
Like a pathologist conducting an autopsy, trends analysis is a ‘post mortem’ on accounts to look for clues into what caused the ‘death’ or denial of that claim. Hint: it stems from the root cause.
If “why do we have aged A/R?” is the question, the answer for you will be different than the answer for the healthcare organization across town. And that, precisely, is why there is value in trends analysis — it’s specific to your organization, your specialty mix, your staffing model, your internal processes, and your revenue cycle priorities.
By tracking accounts as they move through each step in the revenue cycle, a trends analysis can reveal potential bottlenecks, areas prone to human error, other discrepancies, system errors, and much more. Discovering what could have been done differently earlier in the revenue cycle to increase the opportunity that a claim would be paid quickly and accurately is the first step. Examine what happens when the patient is registered and scheduled when the charge is coded, when the claims are submitted and when the payments are posted. Then make sure that reports provide information that is actionable.
The Bottom Line
Instead of just hoping those old claims can just be puzzled out and muddled through, revenue cycle leaders must be thoughtful and proactive to prevent aged A/R issues from happening from the outset. You will need deep-dive reporting capabilities and analysts tuned into identifying trends within your specific processes, staffing models and revenue cycle operations goals. Or, you might consider a partner to help identify issues before they become aged claims.