Collection rate tops 98% for multispecialty group
Collection rate tops 98% for multispecialty group
Group tracks trends to spot problems
When Valley Medical Center, PLLC, in Lewis-ton, ID, purchased a new information system four years ago, the request for proposals included four pages of requirements that the staff needed to use the system to gather detailed information about accounts receivable (AR). Creating monthly and sometimes weekly reports detailing all aspects of the practice’s financial health is just one of a series of initiatives that helps the multispecialty practice keep an eye on its bottom line.
The group of 28 physicians and three midlevel practitioners collects 98.5% of its charges, after contractual adjustments, and collects its AR in an average of 60 days.
The group’s statistics put it among the best performing groups in AR management in a survey by the Medical Group Management Association (MGMA) in Englewood, CO. Because of the outstanding performance of the group, Valley Medical Center is spotlighted in Successful Accounts Receivable and Collections, one of a series of videos designed to show medical groups how to raise the bar for successful operations. The series, Medical Group Focus, is a four-part series of 25-minute educational videos.
An effective information management system is crucial for successful management of AR, says John Houser, FACMPE, chief executive officer of the multispecialty practice. "Most software will give you some type of aging reports on your [AR] and the outstanding balance for each patient. We wanted a system that would narrow down any rejection of claims or outstanding balances so we could follow up on them rapidly," he says.
Instead of just producing a sheet of paper listing all the AR, Valley Medical Center’s software can break out the accounts with problems. "We don’t want to be having to work with an [AR] that is current. We want to look at things by exception as opposed to everything that’s on the books," Houser says.
The staff at Valley Medical Center produces "key indicator" reports monthly. "We look at five to 10 items every month to compare ourselves to our peers and to ourselves. If we are trending toward unacceptable status, we take steps to correct it," he says.
Tracking indicators
Among the indicators the practice tracks are days outstanding in AR, gross fee for service collections, adjusted fee for service collection, net medical revenue per physician, and operating cost as a percentage of net medical revenue.
The practice conducts an in-depth analysis of AR each month, including a look at each payer. The analysis compares how much each payer has in unpaid claims as compared to a month ago and a year ago. "[Our staff] are looking for trends to see if there is something going on. For instance, if our review shows that one insurer paid us less than usual even though we billed the same, that’s an indicator that we need to look further," Houser says.
The practice examines each payer’s efficiency, how fast it is paying the claims and proficiency, and if the company is paying the claims the way the contract says it should.
"If a trend continues, we have a real watch going on. If a payer is bundling codes or doing something that decreases our reimbursement, it leads us to consider whether to consider that payer as an ex-contractee or to negotiate a better arrangement," he says.
Keeping close tabs on insurers helps Houser spot problems that occur over time and correct them. "If you’re not making money on a contract, you either need to replace it or renegotiate it."
The office has two full-time-equivalent employees who collect on the private pay system and 13 people handling billing.
Every week, Houser gets a report telling him how many clean claims were accepted electronically and how many dollars were billed. Those figures are compared to the amount of money coming in from each payer.
The practice focuses on submitting clean claims. That includes making sure each procedure is properly coded, making sure the practice has current insurance information on the patient, and ensuring that procedures are covered and produced in the format each insurer requires.
The practice submits most of its claims electronically. Each insurer’s computer software automatically audits the claims and rejects those that are not clean, Houser says. When a claim is rejected, the staff analyze it immediately, find out what the problem is, and resubmit it. The practice bills its payers every week. Rejected claims are usually resubmitted the next week.
Gaining acceptance
Good AR management begins with the acceptance of the owner of the practice or the stakeholder physicians, Houser says. Management can provide good information, but if the physicians don’t think tracking AR is important, those efforts won’t work. "The physicians must recognize the importance of collections and written policies that can be adhered to," he adds.
Here are some tips from Houser on how you can improve your accounts receivables:
• Educate and train your staff on their role in AR. Give them positive feedback when they do a good job as well as notifying them when something is not working.
• Analyze your collections system and decide what is working well and what is not working.
• Get involved in professional organizations that offer you education on how to increase your collections. Develop a network of your peers. Houser exchanges information on a weekly basis with 25 other administrators in a similar capacity. "It gives you a sounding board, and remember, plagiarism is an accepted form of management in our business," he says.
[The MGMA launched the first two components of its four-part video education series, produced by the Stratos Institute for Healthcare Performance, this fall. In addition to Successful Accounts Receivable and Collections, a second 25-minute video, Improving Profitability, is now available. Effective Production, Capacity, and Staffing, will be available in January 2001. Negotiating and Managing Managed Care Contracts is scheduled for release in April 2001. For more information, call (040) 388-2100 or e-mail: [email protected]. Contact the West Coast office at 29805 Weatherwood, Suite 200, Laguna Niguel, CA 92677-1945, or the East Coast office at 7990 Old Georgetown Road, Bethesda, MD 20814-2430.]
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