Healthcare providers had to manage many predicaments in 2020, but most would agree that an excess of cash was not among them. Even if the cost of responding to the global pandemic had not been an issue, the implementation of the Patient-Driven Groupings Model (PDGM), among other challenges, resulted in serious cash flow problems for home health agencies.

A steady cash flow is essential for paying your expenses, funding your employee payroll and other aspects of running your day-to-day business. Your revenues may be strong – in fact, many home health agencies benefited from the shift in preference for patients to convalesce at home versus in a COVID-19-ravaged post-acute care facility. If you aren’t collecting on those revenues, however, you won’t have the cash you need to operate your agency when you need it.

Home Health Billing Challenges

Collecting payments and reducing accounts receivable for home health agencies relies upon a strong billing process. When the process is working efficiently, accounts are billed and receivables are collected in a timely manner. When a balance due languishes for too long in accounts receivable, however, your cash flow takes a hit. Too many balances due and your cash flow is in big trouble.

The process has been made significantly more challenging by the new requirements and changes under PDGM. One such change is that billing occurs every 30 days instead of 60. This means that the initial RAP (to be replaced by notice of admission (NOA) in 2022), which is required to be submitted within five calendar days from the start of care date, and the final claim will happen in a shorter time period, making timeliness crucial. Furthermore, new rules require a specific diagnosis that will place a patient into a particular clinical group, which then determines payment. No longer can a diagnosis be vague, and it must have a physician’s signature along with signed orders and plan of care.

These changes, among others, have made managing referral sources more difficult than ever. Many referral sources are pushing back and failing to provide adequate diagnoses or physicians’ signatures, and required documentation is not being submitted in the appropriate time frame.

Your key performance indicators (KPIs), including Days to RAP (or Days to NOA in 2022), Days to Final Submission, Physician Order Signing and Days Sales Outstanding (DSO), will reveal whether your billing process is running smoothly or highlight its weaknesses.

There are many steps along the billing process that need to happen seamlessly or they will lead to delinquent accounts and higher accounts receivable. You can decrease your accounts receivable and collect more revenue by monitoring and honing each component of your billing process every step of the way. Your ticket to success is your billing team and making sure that it is contributing to a well-oiled machine.

How to Set Up Your Billing Team for Success

Billing for a home health agency, as with any medical provider, is not a simple process. Managing referral sources and payers, submitting invoices and following up on unpaid claims can be overwhelming for employees who lack the skills necessary to manage it all. Optimize the performance of your billing team by providing adequate tools and resources within three main areas – training and education, policies and procedures and technology.

Training and Education

Failure to capture and reduce errors within the billing process affects accounts receivable collection, cash flow and your bottom line. Your billing team must understand the revenue cycle process in order to think strategically about how billing affects the process, otherwise they’re unlikely to be invested in doing more than simply data entry.

Provide your billing team with adequate training, including:

• Educate staff on how billing affects the bottom line and how revenue cycle management works. Your billing team must have basic accounting skills in order to understand that an uncollected account receivable turns into bad debt and, ultimately, less income.
• Cross train staff with other departments. This can illustrate to billing staff how an error in insurance verification or another intake task can cause a bill to be uncollectible or shed light on repeat offenders of unpaid bills.
• Train staff on the collection of patient information, including referral source, Face-to-Face visit notes, diagnoses and documentation like physicians’ orders, and how it affects payment.
• Educate staff on Health Insurance Prospective Payment System (HIPPS) codes and the importance of proper diagnosis and optimal clinical group placement for accurate coding, which in turn affect reimbursement.
• Educate staff on Low Utilization Payment Adjustments (LUPAs) and how the reduction in the number of visits provided during a patient’s period of care will result in a payment adjustment.
• Ensure that staff is up-to-date on all Medicare and Medicaid requirements, which change often, and understands the connection between a patient’s eligibility and reimbursement.

Policies and Procedures

COVID-19 resulted in considerably more responsibilities for all areas of home health care. For billing staff struggling to keep up with an increased workload, structure is essential.

To help your billing team move smoothly from claim generation to delinquent account follow up, detailed policies and procedures should be in place for each step of the billing process, including:

• Verifying patient information and documentation
• Setting up payers
• Making timely claims submissions
• Following up on claims with Medicare and other payers
• Submitting RAPS within the required five calendar days
• Posting payments
• Monitoring outstanding claims
• Reporting on denials
• Defining, rebilling and writing off a delinquent account
• Determining the reason for a delinquent account

The Five Whys

The most difficult part of the process may be determining the cause of delinquent accounts. Continuing to resubmit a claim will be fruitless if an error will keep it from being paid. Your billing team should be well versed in getting to the “why” of delinquent accounts. This is where adequate training and strategic thinking come into play. Continuing to ask “why?” when a claim hasn’t been paid can get to the root cause of a denial so that the issue can be corrected prior to rebilling.

For example, asking why a claim hasn’t been paid may set off the following sequence:

1. Why? Because it was denied
2. Why? Because it was not submitted in a timely manner
3. Why? Because the billing team didn’t have necessary patient information by the due date
4. Why? Because the referral source neglected to submit the appropriate information in a timely manner
5. Why? Because the referral source is uninformed or unwilling

In this case, drilling down to the root cause will allow you to ensure that the referral source understands their responsibilities and is willing to fulfill them prior to admitting a patient.

This technique is called the Five Whys because five questions are generally adequate to get to the root cause. The idea is to keep asking until you can solve a problem at its origin.

Technology

Streamlined workflows within the billing process depend upon the availability and proper use of technology, primarily electronic health record (eHR) software. Optimizing the entire RCM process can be facilitated by eHR software that covers all areas of the home health agency, including:

• Intake
• Invoicing
• Claims submission
• KPI analytics
• PDGM preparedness
• Delivery of patient care and quality assurance

Robust, up-to-date systems as well as proper manuals and training can help equip your billing team with the tools they need for success.

How Can Richter Help? Contact Our Home Health and Hospice Consultants

A successful RCM process starts with your billing team. A knowledgeable and efficient billing team can do more than process claims, it can influence your bottom line.

Richter can help your agency optimize your billing team for a streamlined RCM process. We can provide assistance with training, implementing effective policies and procedures, evaluating your systems and other home health and hospice challenges you may have. Call Richter’s home health consultants at 866-806-0799 or request a free consultation.