With the type of consulting I do, I spend a lot of time working with chief financial officers or vice presidents of finance in some capacity,
as well as working with billing and other staff. One of the things I've noticed, though I pretty much knew it already, is that the upper
management folks think they know more about billing and receivables than the rest of us do. I don't really have all that big a problem
with it, because many of them are willing to listen, but when they're not, then problems arise, feelings get hurt, and expectations can't
be reached. So, I've decided to answer some questions and give some facts that the rest of you can quote back to those same folks when
you see it coming down the pike towards you.
1. Patient Accounts is responsible for unbilled accounts receivable. This is a misnomer, but I actually understand where this one
comes from. Many CFO's and the like believe unbilled AR means that billing isn't doing its job in making sure all the bills have gone out
the door. What those of us in the know realize is that unbilled AR means one of two things: these are accounts that are waiting to drop
into the billed queue so that they can be billed, or they're accounts waiting for medical records to get them coded.
Either way, there's nothing patient accounting can do to get these claims out of the door. We know that these same CFO's believe patient
accounting should monitor these numbers, and if they get high that they should pound on medical records to get to them. I'm sorry, but
who does medical records report to anyway? It's one thing to analyze why, suddenly, your AR went up drastically in the 0-45 category and you
realize that medical records is catching up on some accounts; it's another for patient accounting to be "pulling rank" by telling medical records
they're deficient in their responsibilities.
2. All outstanding receivables can be taken care of if patient accounting would just keep billing the claims. We all know that's not
how it works either, but I've heard it more than once. Patient accounting's job is to get the claims out of the door at least the first time,
hopefully as clean as they can be, and hope that the overwhelming majority of them get paid. When they're not paid on time, if all we do is
rebill we're never going to get anything taken care of. Insurance companies deny claims for a lot of different reasons, and all of us know
that it's not because we're not constantly sending them more bills. It takes picking up the phone; it takes working the mail; and it takes
working EOBs to discover the reason why some claims aren't paid. Sure, there are times when what's needed is another claim to be sent
(compensation carriers still seem to lose the most number of bills; maybe they should all start accepting electronic claims and stop requesting
all those medical records, eh?), but that's not the norm for all insurances.
3. It should only take 60-90 days to reduce outstanding receivables to acceptable levels. CFO's want results now; don't we all? The
truth is that there's no one way of getting all receivables down in every single circumstance at every hospital in the country without doing one
of two things. Those would be throwing a lot of bodies at it or doing a lot of write-offs. Most of the time, what CFO's really want is better cash
flow, and more of it, and, of course, just reducing the AR isn't going to always get that done. I have been to many hospitals where the AR is
high because no one ever wrote off allowances, or where CFO's haven't allowed outstanding self pay accounts to go to collection agencies
because they didn't want to reflect bad debt on the balance statement. They can't have it both ways and expect results from patient accounting;
life just doesn't work like that. And, while we're at it, they also need to be told that when cash is high, adjustments are high, and that's
actually a good thing.
4. If the people doing the billing knew what they were doing, we'd get better results. Actually, I can't argue against this one all
that much, but the background of it is incorrect. Training always makes everyone better; finding the time, or the money, to do all the
training that's needed is another thing. Whereas almost every other profession within the hospital has people with specific training and
certifications to do their jobs, patient accounting doesn't have that luxury overall. Although AAHAM
does offer certification for billing personnel and patient account managers, it's not mandatory in most states. And, for those billing people
who'd like to get this certification, most of them are expected to pay for it, and then aren't given the encouragement to go to meetings to
keep the certifications. Or, if they are allowed to go, they're expected to always pay for it. If you're a manager, maybe that's okay, but if
you're a front line employee only making $10 an hour, it's not as fair. Patient accounting people do as good as they can with training personnel
during the work day, but it would be so much easier if more billing personnel came in with qualifications on par with other employees, especially
with the critical nature of the job they do. If more CFO's let go of a little bit more training money, they'd be surprised just how much more
money could be coming in the door.
5. Patient accounting needs to try to get every single dollar they can, no exceptions, including all late charges. That sounds
good, but the fact is that there's not a single hospital patient accounting office in the country that pays as much attention to the $10
account as they do the $10,000 account. Should they? Well, this is a tough question because there are way more $10 than $10,000
accounts, but it takes a heck of a lot of $10 to equal only 10 accounts of at least $10,000. Of course there are varying dollar amounts
on all claims across the board that have to be dealt with, and when cash gets tight, all patient accounting managers tell their staff to
start on the big dollar claims first and work their way down.
The same goes for late charges. Patient accounting hates late charges with a passion because it causes a lot of rebilling that sometimes
insurance companies don't understand the first time around, believing they're duplicate bills instead; seems not every insurance carrier
knows what a 135 bill is (denotes late charge bill, in case you didn't know either). Some late charges are for such small dollar amounts
that it seems idiotic to even worry about it; some are so late that it makes us wonder what prompted someone to go looking for it to begin with.
I've always believed in "bang for my buck" working rules. That is, we get a good return on our sweat equity when we can close
out the larger and cleaner accounts, and of course we reduce the numbers to workable amounts by not worrying so much about the low
dollar accounts that we're going to write off anyway before we think about sending them to collection. Sometimes we still send them to
collection, but we look the other way or roll our eyes when these agencies tell us they're going to work those small dollar claims as hard
as they work the big dollar claims. Trust me, collection agencies aren't having their staffs waste their time calling up past clients of a
hospital looking for $10 dollars.
The same goes for late charges. If a department isn't trained well enough to get their charges in on time, that's not the fault of
the patient accounting department. Sure, there are times when there will be legitimate late charges, such as gross micros, ambulance
bills, and transplant fees, and some of them are of sufficient dollar amounts where you want to bill for them, but in my mind, if late
charges are under certain amounts, which should be set by the hospital, I'm not even going to bother with them. Every hospital should
have a policy on late charges, and it should address both time limits and dollar amounts.
Save this newsletter so you'll have some counterpoints to use when your CFO brings up any of these issues again. Tell them I said it; they'll like that.