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Are You "Workin" the A/R?

 

Unless you have a large group of staff or use a billing service, most of us have to deal with many different tasks with respect to getting a claim paid. Unfortunately, due to understaffing and lack of proper training, in many offices, working the A/R is the last thing anyone in the billing department ever wants to do or does.

The undertaking of “working the A/R” is a monumental one. For most practices, just printing out the report takes hours and then there’s the actual pile. Working on four, five, maybe even ten inches of names and dollar amounts is daunting. Most A/R reports are not organized by any carefully predetermined thought process. The printing of the report is usually just the result of pushing that one key, "print".

Separate the horses from the cows

When you run an A/R report, always, I said always, separate your patient-owed balances from your unpaid insurance claim balances. The two reports should be totally separated and should be dealt with using entirely different processes.

The patient A/R: It's easy to work.

  1. Bill patients two months in a row.
  2. If they make no payments at all during that 60-day cycle, then Write them off and turn them over to collections. (Yes, you can do this. You really can. I promise it won’t hurt.)
  3. If the patient should make a payment, then the 60-day cycle starts again.
  4. On a monthly basis, run a report that breaks out patients with balances over a certain dollar amount, say $200. (Your office may want to analyze these larger balances, taking into account that a $5 payment every 30 days is not enough to bring the account to a zero balance in a reasonable period of time. These patients should be offered payment options limited to the balance being transferred to the credit card of their choice.)

The Insurance A/R Report: If the horse dies, get off!

Before you start to run your monthly insurance A/R report, you must make it manageable for your staff. Step one is to rid the report of its dead weight. This means that you must write off balances that are 12 to 18 months old. There should be nothing in your A/R that is older than 18 months. I use 12 months as my goal.

Even if you think that someone, at some time, on some unknown planet, will pay for those old claims, write it off anyway. You can create a new write-off category that allows you to track those write-offs and run a report, anytime you want, so you can review all those claims you wrote off. You can even take the report home and cuddle it thinking about all the time you spent together. But you shouldn’t leave those dead accounts on the active A/R report.

The Summary Carrier Aging Report

This is a report that summarizes all the carriers that you have billed that have any unpaid claims or open items. The report lists the carriers in alphabetical order and only tells you how much unpaid money is sitting in each of the aging buckets. The most common aging buckets (or categories) are:

  1. Current (30 days or less)
  2. 31 to 60 days
  3. 61 to 90 days
  4. Over 91 days

The Detailed Carrier Aging Report

The way this report is generated will affect how effective your efforts are when you work it. Run a separate aging report for each of your major plans such as Medicare, Blue Shield, Aetna, United, CIGNA, or whoever else represents a large portion of your monthly revenues. This report is often referred to as a Detailed Aging by Carrier Report. For all the others (smaller carriers), you can lump them into one, separate miscellaneous report.

What is important here is that the aging is based on the date of service, NOT the date the claims was last touched, filed, reviewed, or run. It must be run using date of service. Run each payer report listing highest balances first to lowest balances last.

Make sure that the report puts each account into the aging buckets (e.g., current, 31 to 60, 61 to 90 and over 90 days).

You don’t need to separate beyond 90 days, as those accounts should already been in some tertiary stage of appeal. If it makes you feel good, you can age them up to 365 days, but then they must be written off into that special category I mentioned earlier in the article.

Who’s on first?

You now have two types of insurance reports: the Summary Carrier Aging Report and the Detailed Carrier Aging Report. Your first step now is to look at the Summary Carrier Aging Report and identify where most of your money is sitting.

Carriers               Current          31 to 60         61 to 90         Over 90

Aetna                    $14,246.99      $2,987.00        $ 678.34       $9,123.44

Blue Shield             $44,675.87    $15,987.56    $10,051.99       $4,592.11

CIGNA                     $7,567.42      $6,534.99    $13,453.99         $ 745.98

Medicaid                $21,333.56      $8,212.34         $965.67        $1,110.56

Medicare                $64,234.99      $8,456.33      $5,647.88      $18,345.33

Railroad MCR            $5,673.89      $3,425.56        $ 579.33       $1,234.89

TriCare                     $9,435.66      $8,711.23      $3,276.12       $6,456.45

UHC                       $13,548.56       $3,756.29       $ 678.38       $1,212.56

A quick review of this report shows you where you need to start working the A/R first. Based on what I see, I would establish the following priorities:

I would first look at my Medicare over 90 days. Medicare is easy to collect, and you shouldn’t have any money over 60 days with that carrier. Next, I would look at CIGNA at 31 to 90 days. That’s quite a chunk of money. I would pay attention to Blue Shield in both the 31 to 90-day categories. You have over $25,000 sitting there. Finally, I would hit Aetna over 90 days and see why there’s so much money sitting out there.

If you start with those four things, you could collect almost 55% of the money that is sitting out there over 31 days. The total over 31 days is about $135,000 and cleaning up the categories that I mentioned above would allow you to address $72,000 of that. That’s where you get the biggest bang for your buck. 

After you do that, you set another set of priorities based on what is left:

Carriers                     Current          31 to 60         61 to 90         Over 90

Aetna                      $14,246.99        $2,987.00          $ 678.34

Blue Shield               $44,675.87                                                  $4,592.11

CIGNA                       $7,567.42                                                    $ 745.98

Medicaid                   $21,333.56       $8,212.34           $965.67     $1,110.56

Medicare                   $64,234.99       $8,456.33        $5,647.88

Railroad MCR              $5,673.89        $3,425.56          $ 579.33    $1,234.89

TriCare                       $9,435.66        $8,711.23         $3,276.12   $6,456.45

UHC                         $13,548.56        $3,756.29           $ 678.38   $1,212.56

Phase two of the job would look like this:

  1. Go after the Medicare money in the 31 to 90-day categories.
  2. Work the TriCare money all the way from 31 to over 90 days. You’ve got over $11,000 sitting there.
  3. Medicaid over 31 days represent $8,212, a chunk of money that needs to be looked at fast and furiously.
  4. UHC and Railroad MCR in the 31-60 day column needs to be called on. They total over $7,000.

The next phase addresses about $40,000 or another 30% of the outstanding A/R. So, between the two phases, you now should have cleaned up 78% of your outstanding claims. 

Phase three would allow you to go after the rest. Of course, before you work any category of claims, always check first for the following two criteria:

  1. Does the carrier have a filing limit?
  2. Does the carrier have an appeal/review time limit?

Any carriers that have time limits should be worked first no matter how much money is in the bucket. If you don’t follow up within the carriers’ limits, you’ll have no chance to recoup the money; so, make that your priority one.

I like to paint; you like to read

If you have more than one or two individuals in your billing department, it’s best to divide up the A/R clean up. Someone in your department may really like working Medicare, Railroad Medicare and TriCare while someone else feels they have a real handle on Blue Shield and UHC.

The point is, either assign or ask for volunteers. Find out who wants to work which carriers. Divide up the work and be sure to set deadlines when the report must be completed. A knowledgeable staff member should be able to work 60 claims per day. This includes finding out why the claim has not been paid, fixing the denial by attaching notes, requesting reconsideration, and refiling the claim with notes attached in the account message section for future reference on account activity. Working the A/R does not mean hitting the refile button in your billing software. 

Someone should be responsible for monitoring the work done by staff to make sure that the claims are actually being worked, not just refiled. The goal should be that no more than 10% of your total insurance A/R should be over 90 days. That is the goal most professional billing services use as a benchmark of excellence. In the example above, you have a little over 13% over 90 days and chances that another 11% from the 61 to 90 column will fall into that category quickly if someone doesn’t find out why the claims haven’t been paid. 

Groovin

Getting the process started, identifying who is good at what, and establishing time tables for getting the work done is the hardest part. Once you and your staff get into a routine, and you consistently work your 31 to 90-day buckets, very little money will fall into the over 90-day category, and those that do, you’ll already know what the problems are.

Finally, if you work your A/R consistently, you will find that your work load gets smaller and smaller as you are able to identify problems early and keep accounts from getting out-of-control. Soon you’ll be groovin’ and boy that feels great!

 
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Reed Tinsley, CPA
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21175 Tomball Parkway #194, Houston, TX 77070
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