7 steps to prevent overdue payments

Practice Pointers. By Karen Schechter, amednews contributor. July 28, 2003.

PRACTICE POINTERS

Answers to questions about the business side of your practice

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Question Our practice's percentage of outstanding accounts more than 60 days old is increasing each month. What could be a potential source of this problem?

Answer The billing and collection process consists of seven steps, any of which can trip you up, and cause an insurer not to pay you.

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Step 1: Appointment scheduling. When a patient makes an appointment, the staff should make sure the physician is on the patient's insurance plan. Every day a designated staff member should verify that all authorizations required for the following day's appointments are in the patients' charts. If not, a reminder call to the patient might be in order.

Step 2: Registration. It is critical that the patient complete a new patient information form or verify and sign an existing form at least once a year. It is important to politely insist that the entire form be completed and verified.

Each time a patient signs in, the receptionist should ask to see an insurance card and verify demographic information. The receptionist should compare the card with the copy in the patient's chart. If there are differences, the new card needs to be copied.

It also is important to enforce the policy of collecting co-pays at the time of service.

Step 3: Charge collection. Charges and associated diagnosis codes should be documented on the superbill. Codes should be well-documented in the patient's chart. All superbills for a day's worth of appointments should be accounted for no later than mid-morning the next business day.

Step 4: Claims submission. If the information collected and entered in the first three steps is accurate, then submitting claims should be a relatively easy task. A sharp biller will "scrub" the claim information on the superbill and in the computer before transmitting it to an electronic claims clearinghouse or directly to the insurance companies. This process includes verifying that all services are accounted for and entered into the billing system accurately, that the procedure codes are attached to the appropriate diagnosis codes and that insurance information is accurate and complete.

The next task is to review transmission reports that are sent from the claims clearinghouse or insurers. All transmission errors should be addressed as soon as possible to ensure that claims are processed on a timely basis. The staff also should compare the number of accounts or transactions they submitted to the number that were accepted by the clearinghouse and/or insurance companies.

Step 5: Payment posting. As payments are received, it is imperative that they are posted to the correct account and service code/charge.

Step 6: Accounts receivable management. This includes routine review of aging accounts and continuous communication with insurers to ensure that the latter received outstanding claims and that they have all the information they need to process and pay them. The office manager should contact the insurer's provider representative if problems persist.

If a charge is denied, the staff should take immediate and appropriate action to appeal the denial.

Once insurance payments and adjustments are posted, the remaining account balance needs to be transferred to the secondary insurance or to the patient's guarantor. When the staff transfers the account to the guarantor, the billing system will begin generating patient statements.

Step 7: Collections. Once the staff has exhausted efforts to collect payment from the patient's guarantor over a reasonable time, it is time to send delinquent accounts to a collection agency. Most accounts older than 120 days are not likely to be collected via routine procedures. It is better to turn them over to a collection agency. Then your staff will have more time to work on collecting younger accounts.

Practice Pointers is provided by the St. Louis-based accounting and management consulting firm Stone Carlie & Co. LLC. The author and publisher are not rendering professional advice and assume no liability in connection with its use. Consult with professional advisers regarding your specific situation. Readers are invited to submit questions to the Business Editor (bob.cook@ama-assn.org).