20 May Accounts Receivable: What’s Going On?
Hopefully you routinely monitor your practice Accounts Receivable (A/R) to make sure your bottom line is healthy. If you are like most pediatric practices, you are probably wondering what in the world happened in 2014!
At first glance you may be asking yourself what’s going on in your billing department. Your accountant may be telling you your A/R has never looked this dismal. Was your biller on vacation? Did you miss ICD-10 updates and your claims are not being processed cleanly? (Oh, wait a minute, ICD-10 has been delayed.) If you look more closely, you may notice what I did. It’s not outstanding insurance payments that are the problem, it’s the patients’ responsibility.
For the past few years my practice has always noticed more payments from families with high-deductible plans in the first quarter of the year when they have not yet met their deductible. But this year is ridiculous. What’s going on?
First, more private patients have moved to high deductible or co-insurance plans. For many patients, this no longer means a $20 copayment at the time of service, but a portion of the total bill is moved toward their payment responsibility. Many of the ACA plans have patient/family deductibles. The overall purchase cost of the insurance plan may be lower to the company or the individual, but some of that lower cost is shifted to deductible thresholds. For some of our patients, they may continue to owe us significant amounts of out-of-pocket payments for the entire year.
So what can you do about this? It is imperative that you do the following:
- Have strong practice financial policies in place
- Enforce the policies that you have established
- Verify insurance eligibility at each point of service
- Checking outstanding family balances and enforcing their collection should be a routine part of patient check-in
- Identify patients who have a deductible or coinsurance type of plan and flag their account accordingly
- Have strong billing staff to consistently monitor and address personal A/R
- Use collection agencies or small claims court to capture outstanding balances
In order to minimize the impact to your cash flow, practices should find a way to capture payment at time of service or as soon as the claim is adjudicated.
If you plan to collect payment at time of service, it is essential that you know your insurance contract language. Certain contracts prohibit you from collecting a “provisional” amount of what you expect to be paid. Instead they only allow you to collect the patient responsibility portion after you have submitted and processed claim. Some payers are offering “on demand” adjudication to allow practices to know the exact amount of patient responsibility to facilitate collection at the time of service. The downside of real time adjudication is that you may fail to capture all of the total charges that you eventually want to submit with the claim. This may leave you having to submit a corrected claim and then balance-bill the patient for additional outstanding monies.
Many practices have instituted a credit-card on file policy specifically for families who have high deductible or coinsurance type of plans. This can be done safely if you use a third party vendor who stores the information on the banking side, and you just maintain a “token” which can be applied when the adjudication is received from the payer. You are not storing the credit card information internally, but a token code that links the account to the credit card processing company for use at a later time. You can swipe their card at the time of the visit (note: if the patient insists, you can indicate a maximum to be charged) and inform the parent that the card will be charge when the claim is processed by their insurance company.
The second thing your biller may have noticed, is that many payers are shifting what used to be the patient copay for a well visit, to other services. You can avoid this with correct use of the -33 modifier. The 33 modifier instructs the payer that this service is also part of preventive services for which, according to the ACA guidelines, cost sharing does not apply. So if you do a hemoglobin, developmental screening, and a Hepatitis B vaccine at the 9 month visit, all of those codes should have a -33 modifier (in addition to the vaccine administration code). The E/M code for the well visit does not need a modifier since the visit itself is always preventive. Some plans are not yet using the -33 modifier (Medicaid plans and few others) so it is always best to check with your payers for verification.
Note: In OP14, Office Practicum users will be able to set this globally at the payer level as a preference.
So, if you haven’t looked recently, go look at your practice A/R. How does it compare to the last several years? Is the patient responsibility significantly higher? If so, do something about it. Your practice’s financial health depends on it. You wouldn’t let your patients with persistent asthma go without a controller. You shouldn’t let your practice finances go without appropriate control either. Remember, the mantra of the Section on Administration and Practice Management: “No Margin, No Mission.”