Episode Transcript
Speaker 0 00:00:01 Hello, and welcome again to Revenue Radio. This is Jeff Dance. We are powered by Kassouf and Kassouf healthcare solutions, where we enhance the business of medicine. Our revenue radio is designed to help you as the practice manager or practice owner, physician maximize your revenue in your practice and in your business today. It's great to have, uh, Marti Sandifer back with us. Marti is the director of revenue cycle management, Marti. Good to have you here. She's uh, our revenue cycle manager at Kassouf Healthcare Solutions. Today. We're gonna be discussing a, uh, a, a topic that is kind of confusing to a lot of folks, uh, but we know it's really important. It's the aged AR dilemma AR the accounts receivable side, uh, as, uh, of the business and revenue cycle. Marti. It's great to have you here. It's
Speaker 1 00:01:03 Great to be here.
Speaker 0 00:01:04 Good. Tell us, uh, or explain a little bit about the aging AR report, the process, how it's structured, why it's so important. And, uh, then we'll get into a few more details and maybe pull out our slide rules and calculators, and, uh, do a little math, uh, later on. So, uh, go tell us why this is so important to as a, as a topic.
Speaker 1 00:01:25 Well, I guess the first reason that it's so important is that we want our money and we want it now, right? That's right. That's so the sooner the money gets in the bank, the better, so no time
Speaker 0 00:01:34 Value.
Speaker 1 00:01:35 That is the number one reason that we want it. Um, the, to monitor that what we need to do is run aged AR reports and every, um, practice management system should have a reporting package that can give you in some form or fashion, your aged accounts receivable. You can break that down into insurance or patient, uh, or a total of both, each different type of aged AR is handled a little differently. The patient AR and I, I don't know that we'll focus too much on that today will mainly talk about insurance AR, but the patient AR is perhaps the most difficult for practices to navigate their way through because the physicians have such a personal relationship with their patients. And those that are, um, sometimes have difficulty in paying physicians are more likely to either adjust that off as a courtesy or charity AR uh, set up payment plans. It's a lot more manual of a manual process,
Speaker 0 00:02:42 But let me interrupt you. Yes, it's still the responsibility of the practice. Yes. To collect that, recover it. It's still part of the patient's responsibility to pay that
Speaker 1 00:02:56 It is. And it's it's, I think it's the hardest for the practice to navigate their way through. And the best thing I can say about patient AR is to set your expectations. When the patient walks in the door, be prepared, run your eligibility checks, see what their benefit coverage, um, covers what their benefits cover, know what the patient's out of pocket will be before they get there. Do they have a deductible? Have they met that deductible? Uh, those type of questions. And then when the patient even calls, or we do a reminder call, remind them, be prepared to pay for any copays or deductibles. When they walk in the door, you can say for today's visit, um, is gonna be out of pocket for you, you know, $75 is your copay. $65 is your copay. How would you like to pay for that? And you set that expectation up front. Um, once a patient gets out of the office, um, you are a lot less likely to collect from them. You are 90% able to collect while they're there. And then it goes down from there when they walk out the door. So setting expectations and being prepared, know your patient base, know who their payers are and know how to read those eligibility checks. So that's the biggest thing for patient AR and then
Speaker 0 00:04:16 That takes a lot of training up front. Doesn't it? Absolutely
Speaker 1 00:04:19 At the front dose. Absolutely. Yeah. Uh, every payer, every practice management systems, eligibility check works differently. Some you can run based on appointments up to two to four days in advance reading those eligibility checks and what the payers send back to the practice. You really need to know what to look for mm-hmm <affirmative>. And, um, we try to very much so to help our clients navigate that and understand how to read those responses. They get back from the payers
Speaker 0 00:04:46 Now is that, uh, I'll call 'em the front desk person. Are they looking at this report that has the zero to 30, 31 to 60, those buckets that are broken out and seeing it by month. And is that what they're looking at?
Speaker 1 00:05:04 No most practice management systems will at the check in, or the, from the appointment scheduling system. When you arrive that patient will bring up their demographics. Most of them have a patient balance on there. Um, a lot of my practices that I work with, they have, um, notes that they put on. And so they know that if this is a, they've had trouble getting in touch with a patient or, um, they need updated insurance information, they'll communicate via messages, but most practice management systems will tell you what the patients, uh, owe. If they have an outstanding balance and most will prompt for a copay mm-hmm <affirmative>, if they don't preparation can be, um, made utilizing your back office in some type of reporting. I know we do that for several of our
Speaker 0 00:05:55 Clients. Yeah. I understand. You've, uh, developed a kind of a tool if you will, and a, which really is developed into a customer service, uh, interaction. If you will talk just a little bit about, uh, how that innovation and, uh, collaboration with your, with your clients is working,
Speaker 1 00:06:15 Uh, it's it's going well. It, it came out of a need. The, when you're talking about your front desk receptionist, they are, they're the ones who greet your patients. The patients are already anxious. They have to come to the, to the doctor. Um, many of them don't wanna talk about money. And so your receptionist needs to, to know why they owe their balance, but many of your reception, um, personnel, they don't have a billing background. And so they were anxious and became very stressed, trying to look through a ledger, a patient ledger to find, answer the patient's questions and just in conversation with them. And I said, you know, wouldn't it be helpful if we took our client representatives, our client account reps, and they went through your appointment, scheduling the previous day, and we sent you notes on all the patient balances and who has copays. And we can alphabetize that. We could do it by doctor. However, it works, mm-hmm <affirmative> best for your practice. And they thought that was worth a try. And it was probably three days and I was getting emails. This is wonderful. This is working. And so the account reps will put notes on there, um, collect, you know, $200 remaining Medicare deductible for the patient, from their January visit. Right. Um, after that they've met their deductible. There's, you know, their secondary will pick up the rest, right. It's been invaluable for that front desk.
Speaker 0 00:07:41 So really from a revenue cycle outsource standpoint, there's some resources there that, uh, most smaller practices can't afford, but from an outsource standpoint, there is, there is some return there
Speaker 1 00:07:58 Absolutely.
Speaker 0 00:07:59 That we can. Yeah. Good, good. Um, so from a management standpoint, as you're looking at aged AR, and we do get into those buckets, mm-hmm <affirmative>, and there's kind of that Marti factor, I've heard about that, you know, what you're really how you approach that and the way you look at that landscape on that, um, that, that report, help us understand what you're looking for as you see all of those numbers moving across, um, you know, from month to month and then down the, the time buckets, give us some, uh, some understanding of how to read that and what to, what to really analyze.
Speaker 1 00:08:41 Sure. So your ACH reports need to be run first of all, by date of service. Okay. Um, a lot of your insurance follow up personnel will argue. I don't wanna know from data service, I wanna know from the date of responsibility. So if they're following up on a secondary, they don't wanna know that it's 180 days. They wanna know it's only been in my bucket for 30 days. My argument to that is that's nice to look at just for you to know, but that money is still 180 days
Speaker 0 00:09:09 Old. So is that responsibility date, is that a claim date, or is that just when it changes financial class?
Speaker 1 00:09:17 That is a, so there's the date of service? The date services were rendered mm-hmm <affirmative> and hopefully that claim is filed to the insurance carrier the next day. Right. Okay. Or the next business day. Right. So you don't have a, a large lag time there, right. Then, depending on your payer, when they get the claim, and of course you wanna do everything you can to make sure that claim is clean when it goes out the door, which is a whole nother topic. But, um, if they get a clean claim and it's adjudicated based on the payer, um, most will be seven to 21 days to pay those claims. And so you need to make sure you're getting those out once that's done, uh, is say your primary payer pays, then the responsibility then goes to the secondary. And so that's kind of a changing that financial class, if you will, or changing responsibility.
Speaker 1 00:10:12 So if you have, for an example, Medicare primary, blue cross secondary, I've worked in practices before where those were two different follow up personnel staff members. And so Medicare, they may have gotten, um, a claim that wasn't clean and they had to send in a reconsideration. And so the payer payment was a little delayed mm-hmm <affirmative> and then when it hit blue cross as the secondary, um, it may only have been there for a couple of days, but if it took three months to get that appeal or payment from Medicare, right. The claim is still that old. Right. But your blue cross follow up person doesn't wanna feel like their claims are that old. Right. So I do run them both ways, um, because I do need to see right. How fast each individual is getting those claims paid.
Speaker 0 00:11:00 Yeah. And that's, that's, uh, a super point there in that. You're not trying to find fault in someone that works with and for you. Um, it's, it's, it's a matter of having the proper controls and understanding what the, what the information is saying to you so that you can make the right decisions.
Speaker 1 00:11:20 Yeah. That's exactly right. And even if something gets old or ages in a bucket for a while, you need to understand why, right. Why is it getting that old? That's not, of course, to place blame it's to get help. Right.
Speaker 0 00:11:34 And, and writeoffs there writeoffs um, and I guess once it moves to collections, where do you see that, uh, occurring in the AR report?
Speaker 1 00:11:46 So different type of adjustments are write offs. There are contractual mm-hmm, <affirmative> write offs, so you have your charge and then you have your payers allowed amount. Mm-hmm <affirmative>, you cannot bill balance bills, what that's called, right. The difference between your charge and the allowed amount. So that's a contractual adjustment. And so that is written off depending on the payer and your practice management system. Some can write that off at the time of, of the charge, which is great, because then it's off your book. You're not gonna get that money. Right. Um, it, that is also, uh, kind of a tedious task to go in and keep up with those. Right. So most just wait until the remittance comes in from the payer, and then the payment is applied, the adjustment is taken, and then the responsibility is either moved to a secondary tertiary or to a patient balance.
Speaker 0 00:12:38 Well, we could follow that down a, a rabbit trail into the, what to ask for when you're selecting a practice management system. Yes. And how you like to see your, your reports run and such, uh, I know you, you run off of, you've told me what 11 different
Speaker 1 00:12:54 Systems I have used about 11 different systems over the course of my career currently using eight
Speaker 0 00:13:00 Differently. But, uh, it's a, it's a, certainly a matter of what you want to see on a report and can that system
Speaker 1 00:13:08 That's right.
Speaker 0 00:13:08 Function, uh, what are some rules of thumb then in those, in that AR report, what are some rules of thumb that you really kind of look for again, as you're analyzing?
Speaker 1 00:13:22 So especially when we receive a new client, mm-hmm, <affirmative> the first thing I wanna do is run an insurance age report to see where the money is. I run that report by payer and my goal for all AR is for that, um, 1 21 plus bucket, anything over that should be less than 10%. That's my goal, less than 10%, if it's less than 15, you know, that's kind of a, B minus C plus in my book, but let's get that to 10 and below and keep that below 10. So I run that by payer and I look specifically first at, um, the payers with short, uh, timely filing guidelines, your United healthcare, the yeah.
Speaker 0 00:14:09 United, you gotta prioritize somehow.
Speaker 1 00:14:11 Absolutely. Yeah. Okay. So the first thing is to look at your, um, payers with the timely filing and see what is getting near timely, filing, get those out the door. Cause if you can get them out the door and have them adjudicated, then if something is wrong with them, you do have your corrected claims time, right? Gives you a little breathing rate, right. And so that's the first priority. The second priority is to look at those, um, by, by payer again, and you wanna look at anything to me over 365 days, the reason is your Medicare, your Medicaid, our blue cross of Alabama on those three particular, which are our largest payers. Mm-hmm, <affirmative>, you have 365 days from the date of service to get that claim in. So I look at anything over that for those three payers to make sure have those been adjudicated, if they haven't, as much as you try and cry and plead and beg, you're not gonna get those paid,
Speaker 0 00:15:15 You really missed that window.
Speaker 1 00:15:16 You've missed it. Right. And the best thing you can do at that point, um, for the sake of everyone is to bite the bullet and just adjust those off. Yeah. Because you will not get paid right
Speaker 0 00:15:26 There. And as the billing manager, you certainly want the business owner, the physician to bless that.
Speaker 1 00:15:35 Absolutely. Absolutely. We will adjust off nothing, especially like that. That is a large balance without, uh, quantifying it and saying you have $10,000 in Medicare claims from two years ago, that for everything that we can tell Medicare never got these claims.
Speaker 0 00:15:56 So being realistic, yes. You see that one 20 bucket. How are we ever gonna get this? Not all is lost.
Speaker 1 00:16:06 No,
Speaker 0 00:16:07 It just takes some elbow grease on the, on the revenue cycle team. It does. And really getting in there and, and figuring out again that prioritization that's
Speaker 1 00:16:17 Right.
Speaker 0 00:16:18 But we also have to be realistic that that is a that's hard money to get.
Speaker 1 00:16:24 It's very hard money to get, because most of the claims that have been adjudicated have been, if they're still on the books, then there's a problem with them somewhere mm-hmm <affirmative>. And at that point you probably need to run another report. Mm-hmm <affirmative>, which is for zero pays is what we call, you know, uh, I've had,
Speaker 0 00:16:44 Yeah, I talked about zero and low, you know, it kind of runs together and then right.
Speaker 1 00:16:48 You're
Speaker 0 00:16:49 What you're supposed to be looking
Speaker 1 00:16:50 At. Zero pays are some of the most important payments mm-hmm <affirmative> if you will. Yep. Um, to a business, because that's telling me I'm not going to pay you mm-hmm <affirmative>. But what it also tells me is why are you not paying me? Right. And if I know why you're not paying me, then I can answer your question. And at, at that point, so you go after those first, what is out there that's been adjudicated that is still sitting in a timeframe that we can get money and let's go after it. Right. Sort those by denial reason, your remark codes, uh, sort them, you know, first of all, of course, by payer. And then by that denial, see if there's a pattern. Yeah. Because it could be something, uh, as easy as an office visit with a, uh, internal procedure that's bundled. Right. And so that you're not gonna get paid for one of those, you get those off, but you provide that feedback to the providers.
Speaker 0 00:17:46 Well, let's switch gears for a moment here and kind of get into, uh, some of the metrics that we see, you know, there's the gross collections. There's we we're meeting with clients, you meet with staff, whoever, and there, that word collections jumps up. Well, is that what I charge? Is that what I get is that what I've sent over to a collection agency, how do we handle that semantics, uh, with that word collections. And then now we got gross collections. What is that? How do you calculate that?
Speaker 1 00:18:20 So your gross collection is basically, and usually you define a timeframe. Mm-hmm <affirmative> we, we do this monthly, so we just closed, uh, the month of February. So for the month of February, for all the payments that we took in, we take that amount and divide it by the charges that we put on the books during that same timeframe.
Speaker 0 00:18:39 Okay. So the charge is the denominator and the Nope.
Speaker 1 00:18:45 Yes. Yep. Payments
Speaker 0 00:18:46 Make sure our long divisions right here. Yes.
Speaker 1 00:18:47 Look, yep. I didn't know. There was gonna be a pop quiz.
Speaker 0 00:18:50 <laugh> yeah. So the divide that that charge goes into what was actually collected. Correct. Which will give you a percentage, that's
Speaker 1 00:18:56 Your gross
Speaker 0 00:18:56 Collections. Okay. And that's gonna be typically lower yes. Than the net collection. And why is that?
Speaker 1 00:19:03 Because in your net collection, you take your charge amount that you put on the books, in that timeframe, and then you take your adjustments, your contractual adjustments, and that is money that you could not collect anyway. Right. And you subtract that from your charge amount, and then you take that number and divide it into your
Speaker 0 00:19:24 Payments. Right. So then that brings really the, the, the net collection is what I'm supposed to be getting for you.
Speaker 1 00:19:32 That's correct.
Speaker 0 00:19:32 To begin with. It's not always a hundred percent. It's not, you've got that payment.
Speaker 1 00:19:37 There, there are timing issues, you know, for charges that you put on the books, uh, if you're a surgeon's office in the last three days of the month happen to fall on your surgery days, right. There's no way to get those paid. Right. And so your charges will be up, but your payments and adjustments may have not been realized for those yet.
Speaker 0 00:19:58 Right. And if you have charges that go in at the end of the month, correct. You're never gonna see that unless you're a cash business. That's right. So then we look at alright, how many days is my money sitting out there? Or how fast am I turning it, I guess is the other way to say it. So on the AR days, is that looking at O over a full year or the last month, how do you typically structure your, your, um, calculation on
Speaker 1 00:20:28 AR days? The, you can do it over a, a year, six months. The general rule is three months mm-hmm <affirmative>. And so you take, um, the number of days in the last calendar three months, uh, you use that, um, for your calculation and your goal, our goal overall is less than 32 days. Mm-hmm <affirmative> okay. Now, based on the type of specialty that you are, or type of practice that will vary. Right, right. Uh, from time to time, uh, things that also add into that factor is how fast the charges get put on the books and out the door. Right. And so if you have a physician who likes to hold charges, then that's gonna, you know, drive those days up because it's gonna take longer to get
Speaker 0 00:21:14 Those face sheets that come back. Yes. Yeah. You gotta track 'em down, then you've got to get the demographics and, and such
Speaker 1 00:21:21 Yeah. Yes. The keyword is automate, right. As many things as you can automate, automate, automate. Right.
Speaker 0 00:21:26 Right. Um, as, as you, you know, staying up on things, we've got this, uh, surprise billing situation going on, that's new legislation. What else are you seeing? That's kind of new, maybe payer, not necessarily calling out payers, but some things trends that you're seeing that are affecting AR right
Speaker 1 00:21:49 Now. Well, the most recent, I just had, uh, a couple of emails on this last year. All of the, uh, COVID vaccines were billed to Medicare. What we call red, white and blue, your traditional Medicare, even if a patient had an, an advantage plan. So even if they were covered by blue advantage or Aveva, Medicare, Cigna health Springs, you still filed your vaccine, your COVID vaccine to red, white, and blue, traditional Medicare. That changed January one of this year. And, um, but we are seeing not all advantage plans have gotten that memo yet. Right. And so we're seeing some denials on those and that's gonna, that takes contacting your payer rep, if you have one, um, contacting the payers, providing them with the information from CMS. Sure, sure. And so that's one of the most recent ones, um, that I see. Yeah.
Speaker 0 00:22:44 Uh, is any of that going to the patient and then the patient flooding the calls? No,
Speaker 1 00:22:51 No. It should not be going to the patient that should all be handled internally. And that would be, uh, on a denial report. Right. And so you want, after you post a remit, then you wanna know what didn't pay on there and why. Sure. And so you need your denial reports and always work your remittances. Yeah.
Speaker 0 00:23:10 Well, it sounds to me like, uh, the AR dilemma, the AR dilemma is one really understanding what the report is and understanding what those, um, what, what can, and can't be done. Mm-hmm <affirmative>, um, to correct the situation. And really once you have that in place being consistent with it and, um, and really helping, uh, the, the business owner, the decision maker really know what they're looking at and what, what are priorities,
Speaker 1 00:23:45 Right? That's right. You could help them make some business decisions. Do you, if you have a charge, an office procedure that's bundled, right. For 90% of your payers, are you still going to charge it? Is it worth it for the 10% that may cover it? Right. Uh, and that's not a decision I will make, but it is information I'll present and let that business owner know that because if you're putting that charge on the books and you're not gonna get paid for it, you're inflating your charges a little bit. Yeah. So possibly a lot, depending on the procedure. So you just have to educate your, I educate providers, office staff, and then I try to continually educate my staff mm-hmm <affirmative> and have them educate me as well on what they're seeing. Good.
Speaker 0 00:24:33 Well, what are the, the last pearls of wisdom before we, uh, sign off for today from, from revenue cycle land that, um, Marti wants to impart to the
Speaker 1 00:24:44 Audience? Well, if I could say anything, it would be clean claims, make sure that you've done everything to pre Scrubb, those claims, and that you get the information out the door clean, you'll get paid faster. That's on insurance money on patient money, set expectations and educate your employees, collect money when the patient's in the office. Great.
Speaker 0 00:25:05 Well, Marti, thank you so much. I know this is, uh, just the tip of the iceberg as we deal with a really complex part of our business. And thanks for helping us get started on that and thinking a little more clearly about how we look at that, that aged AR uh, report and, and all that goes into it. And the, all the background calculations and such hope we haven't, uh, overwhelmed anyone today, but I think it's good practical reminders and, and, um, and advice. So again, thank you for being a part of revenue. My pleasure, enjoy to our listeners. Uh, thank you for being a part of revenue radio, being back with us today. This is Jeff Dance. Uh, we're powered by Kassouf Kassouf Healthcare Solutions, where we enhance the business of medicine. We hope to, uh, have you back soon with us as we explore other topics that, uh, practical, uh, information and tools that can make your business in healthcare maximized to its fullest potential. Thank you, and have a great day.
Speaker 2 00:26:12 Thank you for tuning into the Kassouf Podcast Network resources for today's episode are linked in the episode notes. Thank you to our producer Russ Dorsey and for Kassouf for powering this podcast. Be sure to stay up to date on new episodes and more information about today's episode by following at @kassoufco until next time. Thanks for tuning in.
