Save $$$ with this guide to enhancing revenues
Save $$$ with this guide to enhancing revenues
Need a primer on optimizing revenue? The Southeastern Urological Center in Tallahassee, FL, has some suggestions that might help.
The independent, physician-owned ambulatory urology care center has 45,000 patient encounters each year. And it has saved tens of thousands of dollars annually by carefully monitoring payers and vendors and setting up safeguards against employee fraud.
Susan R. Kizirian, RN, BSN, MBA, executive director of the center, says anyone can do it by following these 10 guidelines:
1. Analyze defined financial parameters on a set schedule. (See guide to defined financial parameters, inserted in this issue.)
2. Trend contractual adjustments.
Find out whether the contractual amount and percentage are acceptable, and if not, whether there is one of the following problems:
· having a poor payer mix;
· performing procedures that are not reimbursable;
· incorrect posting of explanation of benefits (EOBs);
· possible embezzling;
· shifting of payer mix;
· lacking knowledge of managed care contracts;
· lacking understanding of dental codes.
3. Analyze aged accounts receivable (A/R) every month.
These are the key questions to ask:
· Is the A/R timely? Is follow-up done daily, weekly, monthly?
· What is the efficiency and competency of the collections staff?
· Are insurance companies or patients delaying payments?
· Is the facility collecting cash at the time of service?
· Is the facility doing pre-certification with payers?
Here are some possible resolutions to aged A/R problems:
· Have a written policy and procedures, including specific job descriptions.
· Provide continuous monitoring.
· Make a daily review of collections.
· Effectively use a collection agency.
· File insurance claims on a timely basis.
4. Identify the causes of uncollected accounts past 60 days and resolve them. These steps are crucial:
· Be sure that follow-up is always documented.
· Ask: Do the collection personnel have a set follow-up procedure?
· Ask: Do personnel have time to follow-up delinquent accounts?
· You must resolve and not just identify; be proactive rather than reactive. (See Southeastern Urological Center's policy and procedure for collections, inserted in this issue.)
5. File insurance claims within five days of the date of surgery. "Studies show that if you do it within five days, you can turn your receivables over every 45 to 60 days," Kizirian explains.
"The more time it takes, the longer your accounts receivable will become," she adds. So it's a good practice and provides good cash flow to file them within five days.
6. Organize insurance claim forms, EOBs, and all carrier correspondence for review on a set schedule. Kizirian has organized a notebook that has a sheet in the front where an employee charts exceptions in payer reimbursement. These are monitored for trends to see if some payer is consistently reducing reimbursements.
It's one thing if a payer makes a mistake once, but if there's a trend that they're doing it repeatedly, then their mistakes are wasting the center's time and money, Kizirian says.
"We created a document that shows on this particular code you did this, and our agreement was to do it this way," Kizirian explains. "So we stop it quickly rather than let it happen so many times, and this makes the staff more productive."
7. Investigate and/or appeal all denials or reduced charges. Southeastern Urological Center's employees who are in charge of insurance follow-up are each assigned to certain carriers. If they see any reimbursements that are reduced, they follow-up with a phone call, Kizirian says.
Sometimes they can fix it over the telephone. With other carriers, they may have to fill out a document.
8. Know the terms of reimbursement and coding for your major carriers. The center uses fee schedules that list the coding and the allowed charges. Thus every time a payment is posted, it is monitored for compliance by the carrier according to the agreed-upon terms.
The business manager keeps up-to-date fact sheets on all of the carriers. The fact sheets are stated simply with bullets listing the major points of their reimbursement.
"We also have a matrix that some of our people use," Kizirian says. The matrix lists the carrier and its different plans and their rules.
9. Maintain fiscally sound internal controls. This step is crucial, and far too few medical centers take this step, says Kizirian.
"You want to set up a system where the employee who opens the mail cannot make adjustments or deposits, and you want to make sure the checks go into the bank that day," she advises.
At Southeastern Urological Center, the employee who opens the mail runs two calculator tapes on all payments. One copy stays with the bookkeeper and the other with the checks.
The adjustment rule is critical because if an employee can make an adjustment, then he or she should not be able to open the mail or handle the checks. "That's where a lot of embezzlements happen," Kizirian adds.
Finally, the accounts receivable should be balanced each day, and they should always reconcile. "Make sure the ending balance is equal to what you posted for different payments and adjustments," she says.
10. Maintain budgetary controls. Keep a close eye on accounts payable, and hire a good purchasing agent because this is where a real windfall may be found, Kizirian advises.
If a center is spending $100,000 or more on supplies and pharmaceuticals, then a purchasing agent will pay for his or her own salary and even make the business some money, she adds. (See story on running a tight ship, above.)
"This could save you tens of thousands of dollars because although it's not generating revenue, it's optimizing the revenue you have," Kizirian says.
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