Monitoring Accounts Receivable : 5 Accounts Receivable KPIs Every Company Should Track.
Session 115 How to Manage Accounts Receivable & … 19, 2014 3 Session 115 How to Manage Accounts...
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October 19, 2014 1 Session 115 How to Manage Accounts Receivable & Cash Flow Session 115 How to Manage Accounts Receivable & Cash Flow M. Aaron Little, CPA BKD, LLP Managing Director [email protected] Melinda A. Gaboury, COS-C Healthcare Provider Solutions, Inc. Chief Executive Officer [email protected] OBJECTIVES 2
Transcript of Session 115 How to Manage Accounts Receivable & … 19, 2014 3 Session 115 How to Manage Accounts...
October 19, 2014
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Session 115How to Manage Accounts Receivable & Cash Flow
CPAs & ADVISORS
Session 115How to Manage Accounts Receivable & Cash Flow
M. Aaron Little, CPA
BKD, LLPManaging [email protected]
Melinda A. Gaboury, COS-C
Healthcare Provider Solutions, Inc.Chief Executive [email protected]
OBJECTIVES2
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Session 115How to Manage Accounts Receivable & Cash Flow
OBJECTIVESIntroduce Home Care & Hospice Financial Managers Association (HHFMA) revenue cycle surveyExamine industry benchmarks & performance dashboardsExamine effective billing operations performance & cash flow management strategies
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WE NEED YOUR HELP!!
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A/R – REVENUE CYCLE SURVEY NAHC/HHFMA – A/R Sub-Committee
ONLY 30 Responses
The two primary objectives are:Establish standard national averages for Average Days in A/R/days sales outstanding; and Find some consistent ways of dealing with Non-Medicare/Commercial Payers.
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REVENUE CYCLE BENCHMARKS6
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Intake Eligibility & authorization Service delivery
Documentation & orders Pre-billing audit Claims
submission
Claims tracking & collecting
Payment posting &
reconcilingReporting
REVENUE CYCLE7
• Verbal order• First billable visit• OASIS completed• Plan of care completed
RAP billing requirements
• OASIS transmitted• Episode ended• Signed & dated face-to-face encounter• Signed & dated order for every visit• Visit accounted for every order• Therapy reassessment requirements met
PPS claim billing requirements
REVENUE CYCLE CHALLENGES8
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• Patient election• Physician certification, verbal• FTF encounter, if applicable• Initial plan of care
Notice of election billing requirements
• Patient status• Month ended• Signed & dated physician certification• Pharmacy & infusion pump invoices• Levels of care confirmed• Services documented• Nursing facility room & board
Claim billing requirements
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5 days
Suggested Home Health Revenue Cycle Performance
Metric Poor Average Best
Medicare days in AR 45 days or more 35 days 25 days or less
Non-Medicare days in AR 75 days or more 60 to 75 days 60 days or less
Total days in AR 60 days or more 50 days 40 days or less
Medicare AR older than 120 days
10% or more 7% 3% or less
Total AR older than 120 days
15% or more 10% 7% or less
Collections Less than 100% 100% More than 100%
Medicare write-offs 2% or more 1% 0%
Total write-offs 3% or more 2% 1% or less
Days to bill RAPs More than 10 days 7 to 10 days Less than 7 days
Days to bill claims More than 10 days 7 to 10 days Less than 7 days
HOME HEALTH METRICS10
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REVENUE CYCLE13
Medicare RAP Payment Analysis
31 Days in August- 8 Average number of days to pay RAPs
23 Day by which all RAPs would have needed billed to pay during month
101 Number of episodes beginning in August- 30 Number of episodes beginning after August 23
71 Total episodes beginning by August 23- 23 August RAPs paid in August
48 Unpaid RAPsx 1,900$ Average RAP payment
91,200$ Estimated missed RAP payment opportunity
8 Net days of revenue2 Number of RAP auto-cancellations during month
7 Fewest days to bill15 Average days to bill
108 Most days to bill
42 Paid RAPs billed within 12 days or less57 Paid RAPs billed within 13-19 days
+ 5 Paid RAPs billed within 20 days or more
104 Total Paid RAPs
• 31 days in Medicare receivables
• Could have been further reduced by up to 8 days
• Potential improvement represents more than $91,000 in one month’s cash
Medicare Final Claim (FC) Payment Analysis
31 Days in August- 15 Average number of days to pay FCs
16 Day by which all FCs would have needed billed to pay during month
93 Number of episodes ended in August- 34 Number of episodes ended prior August 16
59 Total episodes ended by August 16- 7 August FCs paid in August
52 Unpaid FCsx 1,142$ Average FC payment, net of RAP recoupment
59,384$ Estimated missed FC payment opportunity
5 Net days of revenue
10 Fewest days to bill24 Average days to bill
135 Most days to bill
13 Paid FCs billed within 12 days or less63 Paid FCs billed within 13-19 days
+ 52 Paid FCs billed within 20 days or more
128 Total Paid FCs
REVENUE CYCLE14
• 31 days in Medicare receivables
• Could have been further reduced by up to 5 days
• Potential improvement represents approximately $60,000 in one month’s cash
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Suggested Hospice Performance Guidelines
Metric Poor Average Best
Medicare days in AR 45 days or more 35 days 25 days or less
Total days in AR 55 days or more 45 days 40 days or less
Medicare AR older than 120 days
10% or more 7% 3% or less
Total AR older than 120 days
10% or more 8% 5% or less
Collections Less than 100% 100% More than 100%
Medicare write-offs 1% or more 0% 0%
Total write-offs 3% or more 2% 1% or less
Days to bill claims More than 5 days 5 days Less than 5 days
HOSPICE METRICS15
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Medicare Payment Analysis
26 Number of patients with services in July- 15 July claims paid in August
11 Missed claim payments
96,625$ Estimated net revenues from July claims- 62,908$ Total payments from July claims paid in August
33,717$ Estimated missed payment opportunity
10 Net days of revenue65% Percent of prior month revenues collected in current month
6 Fewest days to bill30 Average days to bill97 Most days to bill
2 Claims billed in 12 days or less18 Claims billed in 13-19 days28 Claims billed in 20 days or more
48 Total Paid Claims
REVENUE CYCLE18
• 57 days in Medicare receivables
• Could have been further reduced by up to 10 days
• Potential improvement represents approximately $34,000 in one month’s cash
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Payers
Technology
Process
People
KEY INFLUENCES19
Senior financial leader
Medicare billing specialist(s)
Medicaid billing specialist(s)
Insurance billing specialist(s)
Insurance authorization specialist(s)
Payment posting specialist(s)
PEOPLE
Accountability void
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MANAGING DATA21
KEY PROCESS ISSUES22
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KEY BILLING & COLLECTION PROCESS ISSUESLack of Pre-Billing AuditsInaccuracy of Cash Posting
Lack of Cash Reconciliation
Collection IssuesLack of Time to CollectNo AuthorizationTimely Filing
Unsigned ordersF2F Issues
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When do we conduct these audits?End of episode – no need to audit prior to end of episode or discharge
What do you need for audit?Patient ChartAudit ToolTrial Bill (Pre-bill)
PREBILLING AUDIT
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Audit 100% of ChartsCatch Compliance IssuesCatch Issues Associated w/PPSAvoid unnecessary denials
Who should conduct these audits?Billing or Clerical Staff are sufficient – it is not a
clinical audit
PREBILLING AUDIT
Quick Review of 485All Blanks Completed, Signed & Dated by
ClinicianSigned & Dated by PhysicianSupplies ordered on 485
Supplemental Orders Signed & Dated by PhysicianOnly exception is Discharge Orders
PREBILLING AUDIT
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Clinical Note for every visit
Frequency & DurationMap out visits and check against orders
Disallow visits and supplies as required
PREBILLING AUDIT
Cash Posters –Posting payments to Patient AccountsTransferring balances to secondary payers or
private payMedicare Patients – reconciling the type of
adjustment that was received and if you were paid correctlyReconciling amounts posted to amounts
deposited into bank
CASH POSTING IS CRITICAL?
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CASH POSTING IS CRITICAL?Medicare Cash Receipts Should be Posted on a
Daily Basis:If payments are less than the original HIPPS
recorded, research reason for difference in DDEDifferentiate the various types of PPS
adjustments in your billing system to obtain statistical data.Make sure adjustments are appropriate.Don’t assume anything!
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AUTHORIZATION QUESTIONS• Do Contracts Exist for all Payers?• Contracts Current?• Rates Negotiated Often?• Uncollectible Ones Terminated?• Intake Staff Aware of Contracts?
AUTHORIZATION QUESTIONS
When contacting insurance company –Customer Service should be able to verify the patient has coverage and the dates coveredMake sure to verify ID # - most likely no longer the patient’s Social Security # due to securityVerify correct spelling of patient’s name per the insurance company’s records
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AUTHORIZATION QUESTIONSDoes the company require 1500 or UB-04 forms?A fax of the authorization from the insurance company is idealWhat are timely filing requirements?Confirm electronic transmission or paper claimsConfirm Address to send information if paper is sent or copies of notes/authorizations, etc. must be sent
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TOOLS FOR EFFECTIVE COLLECTIONS Accurate Receivable Reports Access to all Contracts w/rates Timely Copies of EOBs & Remit Accurate Recording of Authorizations and
Verifications in system Adequate time to perform duties – NOT
other assignments Effective tracking system for follow-up work
done
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Accurate Receivable Reports Access to all Contracts w/rates Timely Copies of EOBs & Remit Accurate Recording of Authorizations and
Verifications in system Adequate time to perform duties – NOT
other assignments Effective tracking system for follow-up work
done
SUMMARY36
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SUMMARYSubmit HHFMA revenue cycle surveys to either
Melinda A. [email protected] 615.399.7790
M. Aaron [email protected] 417.865.0682
Evaluate your agency’s process & personnel performance against suggested benchmarksExamine your agency’s billing operations performance & cash flow to evaluate effectiveness
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QUESTIONS38
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CPAs & ADVISORS
Session 115How to Manage Accounts Receivable & Cash Flow
M. Aaron Little, CPA
BKD, LLPManaging [email protected]
Melinda A. Gaboury, COS-C
Healthcare Provider Solutions, Inc.Chief Executive [email protected]
