When Might You Need an A/R Swat Team?

An accounts receivable (A/R) crisis slowly creeps up at most hospitals, even though signs are evident that the revenue cycle is lagging and breakdowns in workflow and processes are numerous.

But, it usually takes some singular event or development that proves, once and for all, that receivables are getting out of hand and immediate, quick help is needed to reduce A/R – and rejuvenate a flagging A/R process.

Signs You Need Emergency A/R Help?

There are many signs that point to the need for a concerted, focused effort to work down aging receivables. Perhaps the starkest sign of all is when 28 percent or more of your A/R has aged more than 90 days or greater (a benchmark set by the Hospital Accounts Receivable Analysis report on statistical data related to hospital receivables). Before you ever get to this point, however, look out for other warning signals that your A/R is creeping up to an unmanageable state:

• Your A/R accounts are timing out regularly. Third party insurance carriers set deadlines for filing claims and if you don’t submit in time, you won’t get paid. If you don’t submit in time, or properly, the amount of unclaimed reimbursement will creep up to a “breaking point.”
• Cash flow problems. You’ve just flipped the calendar and year-end is nearing and your cash flow is not where it should be – and your A/R days are 10-14 days higher than last year. This is the time you need to quickly, systematically lower your A/R and improve cash flow – not to mention improve your bond rating and show the hospital board that things are under control.
• Computer conversions gone awry. Switching to new software or even more involved computer conversions wreak havoc on accounts receivable. Traditionally, A/R days spike up 10 A/R days outstanding due to conversions and take awhile to come back down to pre-conversion levels.

Other important, yet less blatant signs include: high staff turnover rate, growing number of denials, a breakdown in the patient registration process and simply, just an immense volume of unmanageable claims for the patient financial services staff.

Arming the A/R Swat Team

Handling an A/R crisis should be swift, focused and handled by a pool of resources that are focused on accounts that are the source of the A/R crisis. In other words, tackling aging A/R should be a separate project and not added to the staff’s current workload.

Here’s a step-by-step approach to quickly lowering your A/R:

1. Appoint the most seasoned patient financial services professionals to work on high dollar accounts.
2. Work aged accounts in descending dollar order.
3. Gather all untimely-filed accounts — determine which ones can be appealed and most importantly, determine those that have little chance of payment and write them off.
4. Re-bill as many claims, as quickly as possible.
5. Work with large groups of accounts simultaneously. For example, gather 50 accounts from the same payer, contact the payer and ask them about them all at once. Caution: don’t work one claim after another.
6. Leverage your provider representative to help you get paid.
   
   While some of these steps seem obvious, most patient financial service departments just don’t have the manpower resources to handle an A/R emergency.

Focused A/R Team Pays Off

Some hospitals will decide to manage A/R emergencies themselves, but this is often difficult and unrealistic with existing workloads. Rather than outsourcing — and having to work with off-site staff on separate computers and systems — many hospitals opt to “in-source,” bringing in a dedicated, professional team of patient financial services experts and directors to work on-site and execute an A/R swat team approach.

Case in Point

For Charles J. Santangelo, Executive Vice President/CFO for Susquehanna Health in Western Pennsylvania, in-sourcing was a blessing in disguise when his department underwent a computer conversion that began adversely impacting A/R. Mr. Santangelo’s department decided they needed a 6-person Expeditive team to come in and handle a massive A/R cleanup. Eight months later, not only was A/R under control, but cash was not just flowing, but gushing.

“The results produced from the efforts of Expeditive and our patient account teams were that Susquehanna Health Hospitals collected $18.7 million of targeted A/R over the course of the project. Staff members were professional, friendly and worked well with the Susquehanna Health Patient Accounting staff,” says Mr. Santangelo.

During the course of the effort, the lead Expeditive person worked with the Mr. Santangelo to keep him abreast of progress; weekly and monthly reports showed money coming in, accounts resolved, and detailed A/R summaries by payer and descending balance.

Stop Wheel Spinning

When A/R ages to the point of no return, hospitals need to recover cash quickly and work down aging receivables. Hiring an in-sourced “swat team” allows CFOs and directors to oversee an A/R operation that can quickly get into the system, resolve issues with laser focus and get out with more cash in hand and a rejuvenated and improved revenue cycle.

CMS Continues Reforming Claims Processing

First Coast Service Options, Inc. (FCSO) was awarded the contract — which has a value up to $368 million — and will serve as the first point of contact for the processing and payment of Medicare fee-for-service claims from hospitals, skilled nursing facilities, physicians and other health care practitioners when the program becomes operational in March 2009. Beneficiaries will pose their claims-related questions to a Beneficiary Contact Center.

Under the current system, fiscal intermediaries process claims for Medicare Part A providers, such as hospitals, skilled nursing facilities and other institutional providers. Carriers process claims for physicians, laboratories and other practitioners under Medicare Part B.

As planned, new contractor will take claims payment work now performed by three fiscal intermediaries and two carriers in the newly reconfigured MAC region. As an A/B MAC contractor, FCSO will begin implementation activities and will assume full responsibility for the claims processing work in its three-state jurisdiction no later than March 2009, according to CMS.

By 2011, a total of 15 new Part A/Part B Medicare contractors will be operating in every state and the District of Columbia, says CMS.

The list of new contractors and the states they cover, along with other information, can be found at http://www.cms.hhs.gov/MedicareContractingReform/

SOURCE: CMS

Positive ROI Reported with Health Information Exchanges

Some are providing alerts for eligibility checking.

While computer conversions have the potential to cause your A/R to back up, the good news in all of this is that when Health Information Exchanges (HIE) are operational, costs are reduced, patient care improves and there is a positive ROI.

That’s according to a recently released study based on responses from 130 community-based health information exchanges (HIE) in the continental U.S.

The study conducted by the non-profit eHealth Initiative and released September 11, 2008, indicates that there is “significant impact fully operational initiatives HIEs on improving healthcare delivery and efficiency.”

For the first time, a majority (69%) of the fully operational
respondents (29/42), report a positive financial return on their
investment (ROI) for their participating stakeholders, including
health plans, hospitals, laboratories, and physician practices.
In 2007, just ten (31%) reported a positive ROI.

Other highlights from the 2008 Fifth Annual Survey of Health Information Exchange at the State and Local Levels include…

• A majority (69%) of the fully operational exchange efforts (29/42) report reductions in health care costs.
• About half (52%) of fully operational exchange efforts (22/42) report positive impacts on health care delivery.
• Forty-two health information exchange efforts are now in the advanced stage of development and fully operational-a 31% increase over the 32 operational initiatives in 2007.

As in previous years, according to the study, health
information exchange initiatives are continuing to focus their
efforts on supporting direct care delivery. 2008 survey results
show that 26 of the 42 operational initiatives are offering
clinical messaging, results delivery, or clinical documentation
as one of their services. Sixteen are providing either alerts to
providers, consultation/referral services or enrollment or
eligibility checking.

The report is available on the eHI Website at http://www.ehealthinitiative.org/.

Aggie Gajewska Diamond Joins Expeditive

Expeditive, a leading provider of interim staffing and recruitment of revenue cycle personnel, announced that Aggie Gajewska Diamond has joined the firm as the company’s director of operations.

James Yarsinsky, CPAM, president of the firm, made the announcement. He said the addition of Ms. Gajewska Diamond was reflective of the company’s continued growth.

“We are pleased to have Ms. Diamond join us, as she brings impressive experience in the field of healthcare interim recruiting,” said Mr. Yarsinsky. “As more and more vacancies occur in providers’ revenue cycle and patient financial services department, the more we find our company is in demand. Ms. Diamond will help us increase our penetration in many of these underserved segments.”

Before joining Expeditive, Ms. Diamond was the director of interim staffing and consulting for a Staffing and Consulting firm.