With proper planning and the right tools in place, every healthcare provider can learn to optimize their accounts receivable (AR) management. By staying ahead of issues that may be preventing or delaying repayment and correcting them at the onset, claims will be more accurate for submission – getting you paid sooner.
To improve the state of your accounts receivable management, use the following basic steps as your foundation, then be sure to customize them for your unique organization.
1. Establish Your Baseline
Even if you think you’re already aware of the pain points in your organization’s AR processes, do your due diligence and look at your data. Metrics will play an important role in how you focus your time and efforts to improve these assets, so use the information that is already at your fingertips. Most healthcare software providers offer built-in canned reports, which is a great place to start to better understand how well your AR is currently being managed. Be sure to compare data across different timeframes, so you can better identify any trends that will need your attention.
Below are some performance indicators you should be measuring:
Days sales outstanding
After you have reviewed enough data and gained a better sense of how you measure up, you will then need to establish some realistic goals – and those should be unique to your organization. For example, if your invoice accuracy at the front-end/intake level currently averages about 85%, perhaps your goal should be to achieve 87% by the next reporting period. With these new objectives established, you can then focus on how to optimize your AR.
2. Create a Communication Strategy
You know where you stand now and where you want to be – but how will you get there?
This is where your team will need to step up. Arrange a committee that will be your primary communication team, and get regular (preferably monthly) meetings scheduled on the calendar. This team will be responsible for identifying specific issues that are dragging down your AR numbers, and for making suggestions on how to effectively resolve them.
Ideally, anyone who is a part of the revenue cycle process should be involved in the meetings, as these are the individuals who will really make an impact on your operation. While the structure of every organization is different, consider the entire lifecycle of a receivable and the many hands that touch it along the way. Administrative/center directors, for example, may not be directly engaged in every detail of a receivable, but they are involved in the set-up or intake process, so they should participate in the meetings. Everyone attending the meetings should be prepared to talk through reports (performance indicators noted above) and progress made along the way. It is important that everyone is on the same page with revenue cycle numbers, and these meetings serve as a forum for opening lines of communication between departments that may not otherwise share information. While employees from the back end may be very aware of certain errors or issues, they may not be relaying their concerns to the front end, so the same issues are consequently repeated without any resolution. Your communication team should be held accountable for bridging that gap.
Goals for the communication committee should include:
Representation from every department involved with the revenue cycle process
Now that you have established your goals, identified your issues, and discussed the best course of action, it’s time to get to work. How you go about correcting your issues will vary greatly depending on the source of your problem, but one important point to remember is that you will not be able to fix every issue overnight. You may need to prioritize and focus on improving one or two metrics to start. If issues exist throughout multiple points in the revenue cycle, focus first on front-end issues. Many issues can ultimately be avoided if you can create a clean invoice before a claim is generated. When implementing changes, try not to focus on just fixing the immediate need, which is not always the best plan. Think about the long-term effects of your actions, and especially if there are procedural changes involved, consider how those would be received by staff (this is also where your communication committee should weigh in).
Corrective actions you may want to consider include:
Verify your system is set up to pull the right information
Confirm all contracts are loaded correctly
Set accurate revenue amounts
Develop best practices for intake, eligibility, and any other common problem areas
4. Validate Your Changes
After a change has been implemented – regardless of how small you think it might be – it is important to periodically evaluate those efforts to determine whether they are successfully driving your performance up. Your first check-in point should be approximately 30 days after implementation, then again at 60 and 90 days. If the state of your AR seems to be improving, then continue to reevaluate on an annual basis or intermittingly as needed. On the other hand, if performance continues to lag then circle back to the communication committee and revisit the source of the issue. Seek input from every department, brainstorm alternative solutions, and try again. If you’re still coming up short, let the experienced team at Richter help you with a comprehensive review of your revenue cycle process.