Often when organizations are trying to decide what areas need the most help, they emphasize revenue gain opportunities first (i.e. missing charges, denials, etc). This usually means revenue acceleration opportunities like insurance follow-up (outstanding AR) enhancements and clean-up are put on the backburner in your revenue cycle.
However, if your outstanding AR isn’t getting the love it desperately deserves and needs, you could find yourself in a messy situation that will cause your AR days to increase, total denials to rise, and cost your organization a lot of money in time and effort.
In a recent survey conducted by Recondo Technologies, it was estimated that the cost of follow-up on a per claim basis is $4. For hospitals with thousands of outstanding claims, that’s quite a costly situation. However, with guided analysis and a thoughtful approach to reviewing and enhancing your current outstanding AR situation, it doesn’t have to be that way.
You can reduce the number of claims your staff needs to work and accelerate your AR with just a few simple housekeeping items.
- Use Epic’s insurance toolkit.The insurance toolkit is a great tool provided at no cost from Epic. It takes raw data from your system and puts it into meaningful buckets and graphs that allow you to take action quickly on issues and items plaguing your insurance follow-up numbers.
- Hold outside vendors accountable.It’s not uncommon to pay for outside vendors to help you work down your outstanding AR. If not managed, it can be quite the opposite. What I find is organizations look at vendors as a “set it and forget it” item, when in all actuality, you should be holding them accountable just like you would hold your full-time employees. If you aren’t getting consistent reports detailing the key metrics of their productivity, you should be. As an organization, you should be monitoring each vendor’s progress closely to ensure you are getting the impact you want. Furthermore, a common method employed by organizations is to take a multiple vendor approach that fosters competition with the intent of increasing the performance from both vendors.
- Continual evaluation of processes and workflow.This may seem tedious, but you should be constantly evaluating your insurance follow-up workflows with the mindset of “is there a better way to do this”. Likewise, you should deliberately evaluate the underlying logic supporting your workflows at least once a year to ensure it is accurately set up. Payor guidelines change, contracts change, and the system improves. If you are not constantly evaluating your team and your system workflows, you could miss something in the long run. For example, after reviewing the insurance follow-up processes at one organization, we found a significant volume of accounts that had a payment posted but had not moved to the next responsible party because there was manual intervention required. The users, however, were not completing the very last step which was to manually move the balance down to the next responsible party. It was an easy fix—we created a system action to automate the last step.
In today’s healthcare environment, there is an increased emphasis on accelerating payment collection on the front end, but we should be focusing just as much time accelerating payment collection on the back end considering the financial impact is much more significant.
Imagine your organization is paying $4 for claim follow-up as mentioned above, and you were able to cut out even 5% of that unnecessary work as a result of following the steps above? At 1,000 claims a day, saving $4 a claim on 5% of claims would save you $73,000 right out the gate.
By following the three steps above, you can get your organization in position to better control outstanding AR in the future, which, in turn, can lead to a decrease in AR days, greater staff and vendor productivity, and better financial viability.
If you’re not sure where to begin, please reach out to Cory Mecham and Andrew Wade today. Our team at The Wilshire Group has years of experience operating in this space and assisting organizations with getting their outstanding AR under control, and we would love to help.