Every organization exists to serve a purpose, but without adequate rules in place, operations are chaotic, financials are difficult to track, and goals become impossible to attain. Healthcare providers need to establish the right framework to protect the integrity of the business, improve operational efficiency, and strengthen the revenue cycle.
While there are many different philosophies to consider when establishing an internal controls strategy, there are two primary categories they generally fall into: preventative or detective. For long-term post-acute care (LTPAC) providers, preventative controls should take priority, as they are designed to keep issues from occurring in the first place. It is far more cost-effective to eliminate errors before a claim is submitted, for example, than it is to rely on denials management to recover your revenue.
Let’s dive into three preventative control measures your organization should consider.
1. Establish Critical Policies
To prevent revenue leakage resulting from errors or fraud, policies and procedures in the internal control structure must be established, practiced, and maintained. When a problem is uncovered with your people, process, or technology, a policy should be put in place to prevent that issue from continuing and growing into a larger problem.
Restrict access to sensitive data, keeping close tabs on all user rights
Document standardized AR workflows from start to finish
Define and communicate processes for escalating issues and concerns
Adhere to payer contractual filing deadlines
Conduct periodic reviews of training materials and update to reflect new industry or regulatory changes
Incorporate benchmarks and reporting to measure progress over time
Build in annual internal controls review processes
2. Practice Segregation of Duties
Given the circumstances of today’s staffing challenges, providers may be tempted to hand over all financial tasks to a single person within the organization. Even if they deem this person to be reliable and trustworthy, this puts the company in a very vulnerable position. When only one set of eyes is paying attention, mistakes can slip by – intentional or not – costing the organization significantly.
Segregation of duties between at least two individuals decreases the likelihood of errors and inappropriate actions. For example, an employee at a long-term care facility who is responsible for data entry should not also be responsible for authorizing withdrawals from a resident’s account, or for balancing a monthly bank statement.
Establish and reinforce themes of ownership and accountability
Align with individual job descriptions
Take your employee’s unique skill sets into consideration when assigning responsibilities
Ensure each workflow is handled differently
When duties cannot be separated, implement compensating controls to supervise key activities
3. Concentrate on Quality
Another way for providers to combat financial risk is to implement controls that focus on obtaining, storing, generating, and using quality information. The goal is to achieve 100% reliability of the data in your system, and this requires a great deal of accountability from your administrative teams who are inputting or validating data. The more you can rely on your data, the quicker you can submit a “clean claim” – and in turn receive full reimbursement.
Develop an effective order for working your claims (e.g. oldest and biggest first), prioritizing progress versus meeting quotas on the number of claim “touches”
Instead, require designated actions on each open claim every 30 days
Ensure individuals are cognizant of control processes and how their individual activities impact the organization
Hire individuals with the right experience
Ensure your system is set up to capture the correct (complete) information
Incorporate automation to promote consistency and reduce the likelihood of data entry errors
When proper internal controls are established and followed, providers will see an improvement in performance and have greater confidence in their financials. The experienced revenue cycle consultants at Richter can help your organization identify and correct unnecessary risks within your accounts receivable procedures. To learn more, contact us here or call us at 866.806.0799.