Advice from the field: Reducing accounts receivable and improving collections

Source: PPS Alert for Long-Term Care, November 9, 2018

Deborah Collum, national director of revenue cycle management for Covenant Retirement Communities in Skokie, Illinois, uses one word to prepare people for how they’ll feel during their company’s first monthly accounts receivable (AR) meeting: naked.

“When my company first started conducting AR meetings, they were an hour and a half long, but now we’ve pared them down to about 20 minutes because our AR is so clean. You have to identify the ugly before you can get to the pretty,” she says.

Collum is a big believer in having a system where all the pieces form a complete and fluent process. Here’s how she’s managed to run a smooth ship in her AR and collections departments, with a few words of advice from others in the field.

Thorough documentation and sorting out relevant data
Becky Ziviski, CPA, LNHA, CEO for Profit Without Census, says all collection activity should be clearly and thoroughly documented to expedite the follow-up process. “Based on the documenta-tion, anyone should be able to pick up where the last biller left off.”

Most AR software now includes a spreadsheet function that can collect and track this documentation. Collum recommends working with your software vendor to ensure this functionality is available, allowing the software to do the organizational work for you. The human component, she says, comes in once all the data has been collected. Collum prints these spreadsheets and then pulls out the most relevant data, including the following:

  • Resident name.
    Resident ID (which may or may not be important, depending on which system your facility uses).
    Whether the payer is coinsurance or primary.
    Last payment date.
    Date of discharge, especially for private-pay residents, because in Collum’s experience, it’s very hard to collect once the resident has been discharged. “We start making collec-tion calls for private-pay individuals immediately.”
    “Buckets,” or how many days the claim has been outstanding.

Once this data has been pulled out, Collum puts the information in a separate tab labelled by month. She then creates a separate spreadsheet where she tracks trends for the whole year—in an ideal world, those trends would show that AR is going down.

Prioritize claims
Collum and her team then prioritize which claims they need to collect on. To do this, they sort their payers by shortest timely filing windows, starting with the oldest claims. Medicare, for example, allows a year for timely filing, but UnitedHealthcare only allows 90 days per their contract with Covenant. Timely filings will vary based on each company’s individual contract, however most timely filings are anywhere from 60 to 365 days. “We start working on the claims that are closest to their timely filing limit. For example, if we have a claim with commercial Medicare Part A insurance and 365 days timely filing, we’ll start working on those claims first. The only exception to working from the oldest claims to the newest claims is those private-pay claims, because those are the most difficult to collect on and follow-up needs to be started right away.”

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