All providers hate the idea of having uncollected receivables. Why does it occur? What can be done to minimize the risk for bad debt? Bad debt is the term used to describe any revenue that is uncollected.

Bad Debt Can Occur for a Number of Reasons  

These include:

• Bad information upon admission
• Miscommunication with patients/families
• Poor training and education of staff
• Lack of a proper environment for staff to work
• Lack of accountability with staff, management oversight

LTPAC providers can help to minimize their risk for bad debt by paying attention to their processes and the checks and balances available to help the processes.

Ensure that Admissions processes are in alignment with the industry Best Practices. 

• Are you completing an eligibility verification for each new inquiry/intake? This helps to determine if anticipated coverage is available and identify the documentation and certification/authorization requirements of the payers
• Are you completing either an application or having a discussion about the financial terms of payment for services at the time that services begin or just before?
• Are you working with residents/patients to become the authorized representative for discussions with payers such as Medicaid?
• Are you collecting all deductibles, co-pays, etc. as appropriate?

Review all resident/patient accounts at least once per month

• Are the payers listed correctly?
• Were all claims reviewed via a Triple Check or similar process prior to submission to payers?
• Were all submitted claims accepted?
• If a private pay payment was not made after 30 days, have you begun the collection process utilized by your organization? Do you have a collection process?
• Are there claims or accounts that require referral to a manager, corporate office, legal counsel, etc.?
• Is the Business office following up on claims timely?

Review the Medicaid pending process

• Are all Medicaid pending cases identified?
• Does the facility/agency offer any assistance to residents/patients in completing the application and review process?
• Are Medicaid pending patients billed privately until a decision is rendered by the Medicaid review entity?
• Are you collecting any co-pay each month?
• If appropriate, has the SNF become the rep payee for the Social Security check?

Establish a process to review all aging balances that are past 90 days

• Can additional or separate resources be allocated to focus extra attention to those accounts?
• Does the Business office need a set schedule for “closed door” hours to allow them to focus on collections without interruption?
• Is it time to consider an outsourced Accounts Receivable cleanup so that staff can maintain current accounts and not spread themselves too thin, resulting in an even greater bad debt?

Ensure that Business Office staff have the tools and education needed

• Does your business office know the timely filing limits of all third party carriers? Some can be as little as 30-45 days.
• Does your business office know the billing requirements of all third party carriers?
• Are you utilizing electronic submission of claims whenever possible? Are you using a clearinghouse that provides denial/rejection feedback and claim tracking?

Uncollectible revenue can very quickly spin out of control. It is vital that management take a key role in ensuring it is avoided as much as possible. Asking some simple questions of your current processes can give you the keys to improving the outcomes and reducing bad debt for your facility.