If you’re a CFO, controller or revenue cycle manager at a long-term post-acute care (LTPAC) organization, you know how important it is not only to generate revenue, but to collect it in a timely manner while minimizing lost or uncollectible revenue. If your accounts receivable (AR) aged 90 days and greater exceeds 15% of total AR, that’s too many to accept in a world where COVID-19 is ravaging skilled nursing occupancy rates, census, case mix and consequently, revenue.
At Richter, our Revenue Cycle Management (RCM) professionals work with LTPAC organizations across the country to provide a full range of revenue cycle services, including AR recovery and resolution, or simply AR cleanup. In our work, we’ve seen days in AR range anywhere from 60 to upward of 100, as well as 60-80% of an organization’s revenue categorized as outstanding. This begs the question: If your organization needs cash, and dollars are sitting on your books, why wouldn’t you be as proactive as you can in getting them off your books, and in the bank?
Understanding the Accounts Receivable Recovery and Resolution Process for LTPAC Facilities
Through decades of experience in the LTPAC realm, it’s always been our belief that post-acute care providers struggle to stay current and also clean up old AR. Moreover, the older the AR, the harder it is to get, and the more taxing it can be for someone who’s also responsible for a full plate of day-to-day duties. After all, if the money was easy to get, it’s likely you’d already have it in the door.
Unfortunately, getting the money often is difficult, as AR cases can be complex. They may involve extensive denial management efforts, including lengthy phone conversations and negotiations with insurance companies and sometimes even appeals. The appeals themselves often take considerable time and effort—sometimes hours-long conversations with insurance representatives. While this by itself is taxing, many RCM employees don’t have the requisite experience to identify the reasons why balances are uncollected, why denials are occurring and how to move toward resolution.
In short, AR recovery and resolution is tough in any “normal” operating environment. But with the COVID-19 pandemic continuing to evolve by the day, it’s enough to make a controller’s head spin.
That’s where Richter’s AR recovery and resolution service comes in. When Richter, as a leading consulting firm, is engaged by LTPAC organizations for AR recovery and resolution projects, we deliver a thorough and proven process. For any AR recovery and resolution initiative your LTPAC organization undertakes, we strongly recommend that it begins by creating a strategy that prioritizes accounts by amount and age and riskiest payers. That process should also validate the correctness of the outstanding charges, determine corrective actions required on the claim and proceed to electronic resubmittal to the payer.
From there, an electronic payer response should be initiated to receive the timeliest payer denials or request for more information AND validate payer acceptance of the corrected claim or reconsideration. Next steps including validating either payment or payer denial, and effectively analyzing denial reasons to determine the appropriate appeal actions; establishing relationships with legal collection resources for non-third-party receivables to escalate collection actions timely; removing uncollectible accounts from the books; and validating credit balances to identify potential overpayment liability.
Finally, it’s essential to document all activity within the billing system for full audit trail and visibility and monitor progress regularly.
A truly exceptional AR recovery and resolution initiative should be about more than just getting
dollars in the door. Yes, that’s the primary goal, and it’s critical, particularly as COVID-19 continues to threaten organizational viability. Yet it should also generate relevant and usable insights on your long-term care organization’s AR processes—specifically, what’s working, what merits adjustment, how much your current processes could be costing you and what types of improved processes can help ensure timely AR payments down the line.
er your AR challenges may be, the time to act is now. We hope this article helps you understand the important role that AR recovery and resolution plays in optimizing revenue cycle management, and by extension, organizational health, as well as each critical step in a truly thorough AR cleanup process.
If you have questions about Richter’s AR recovery and resolution services or the approach we can recommend for your organization, please call our revenue cycle management consultants at 866-806-0799 to schedule a free consultation. We also encourage you to read our e-book, “Six Strategies to Optimize Your LTPAC Revenue Cycle Process.”
To aid you in promoting financial health for your LTPAC and other issues surrounding COVID-19, we have developed a COVID-19 Resource Center which is regularly updated with the latest information.
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