July 1996 Bulletin

How to corral accounts receivables

Consultant urges activist approach to collections

by Karen Zupko

Karen Zupko is president of KarenZupko & Associates, a practice management consulting firm.

If there's enough money in your accounts receivable to send a set of triplets to an Ivy League school for four years, it's time to start implementing changes that will move some of those dollars into an interest-bearing account. Larger insurance deductibles, managed care-induced reimbursement changes, and a failure to re-engineer business practices to keep up with the times, are some of the reasons why accounts receivable are rapidly increasing.

Take an activist approach. Try the following proven solutions and watch your collection percentage improve as the amount in all aging categories shrinks.

Preregister new patients. At a recent meeting of orthopaedic surgeons and their administrators in Connecticut, several people shared their successes in preregistering most new patients by phone. Gathering demographic information allows these offices to verify the patient's insurance coverage and determine the deductible and applicable copays. If there are any special rules that apply to the patient's condition, that information also is obtained. Patients then receive accurate financial counseling from the start, eliminating dozens of accounts which used to wind up in the "problem" category.

Preregistration takes a different form for patients covered under workers' compensation. Never take a cavalier attitude and assume the patient probably hurt his or her back at work and that his or her company will pay for the care. Many of the best-run orthopaedic practices verify that an episode of care is covered under workers' compensation with the human resources department, the medical director, or a responsible person at the patient's place of employment. In turn, the company is asked to fax a letter of authorization with full information on the workers' compensation carrier. Next, the orthopaedic office contacts the carrier.

With the emerging growth of managed care comp plans, it's especially important to be extra careful in checking things out-change is happening. Naturally, there are state regulations that apply to workers' compensation and your office should have the most up-to-date copy of your state's rules and reimbursement schedule.

Collect copays. Sending 50-plus statements each month to collect $5, $10, and $15 office visit copays is far from cost-effective. Cost accounting gurus estimate that, including supplies, postage, labor, and overhead, a statement costs the practice from $5 to $7. It's far better to know what the copay is and ask for it at the time of service. Staff should have copay information for each plan and employer at their fingertips-either in the computer system or on a "cheat sheet" at the check out desk to facilitate collection. You should take care of this "detail" when you sign the contract, not after, when the practice is swimming in bills for small amounts.

Be certain your coding is correct. Coding mistakes cause delays and denials, as well as cost money in staff time. In an orthopaedic practice, lack of sufficient diagnosis codes, old CPT codes, and billing for follow-up visits within the global surgical package are all common reasons for denials. Unusual and creative coding approaches land your claim in the black abyss of "in review."

Check the quality of claim form submission. One client was surprised to learn that his practice lacked any pre- or post-submission claim quality review. The attitude of the business office was send out claims and hope something comes back. No one read the "remarks" section on the "explanation of benefits" forms which came from the insurance companies to see what the problems were; they felt it was easier to take the adjustment and go on. For example, there were repeated denials for consultations because the referring doctors names or UPINs were missing. That's plain sloppy work at the front desk and by the business office. The staff should check the encounter form for a referring doctor's name when a consultation code is marked off and be sure it's entered into the system.

Rethink that decision to "downsize" the business office. In an ill-fated attempt to manage overhead, many orthopaedic surgeons are resorting to anemic staffing in their business office. Eliminating positions without carefully assessing the need to revamp processes and systems, improve the quality of supervision, or schedule more computer training, will hurt the collections bottom line.

KarenZupko & Associates conducts the Academy-sponsored Accounts Receivable Management and Coding and Reimbursement Workshops. For more information about the workshops contact Eliza Ginn at KarenZupko & Associates, 625 N. Michigan Ave., Chicago, Ill. 60611. (312) 642-5616 or fax (312) 642-5571.


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