Days in accounts receivable (A/R) is one of the most important key performance indicators for growing practices.
In an increasingly complex healthcare environment—and one in which financial responsibility is shifting to the patient—keeping track of how long it takes to collect healthcare revenue that a practice has billed but has yet to receive from payers and patients is key.
The lower the number of days, the more cash a practice has on hand, which has become increasingly important as margins have tightened and the healthcare industry recovers from the economic troubles brought on by the COVID-19 pandemic.
But ensuring this number stays as low as possible can be a challenge for a growing practice like Key-Whiteman Eye Center in Dallas, Texas.
“We had a difficult time efficiently tracking and working our accounts receivable, our insurance accounts receivable specifically,” Matt Chapman, revenue cycle director at Key-Whitman Eye Center, recently shared in an interview with RevCycleIntelligence.
“I was concerned because, as our practice was growing, I was realizing that the way we were doing it was taking more and more FTEs and more staff time to work the claims. I knew in the back of my head that there’s got to be a better way to do it,” Chapman stated.
The practice of nine board-certified ophthalmologists and six board-certified optometrists has served its community for over 50 years, providing the most advanced equipment and techniques to improve eye care in the Dallas area.
However, the practice’s A/R management processes weren’t as modernized as its clinical practices.
“You have your practice management system, and you have all of these thousands of claims sitting out there. Trying to determine which ones need attention and which ones don’t, it’s a very manual process going through those,” Chapman explained.
“Then, trying to assign an A/R representative either an aging bucket or a specific payer or whatever it is becomes difficult because you want to direct them in the way that you want them to work and sometimes there’s miscommunication in their understanding of what you’re wanting them to do,” the revenue cycle leader continued.
These challenges led to decreased efficiency in A/R management, and therefore, revenue collection.
And the practice isn’t alone. Revenue cycle management workflows, in general, are still largely manual, especially when it comes to claims management and follow-up.
With the practice growing, though, leaders at Key-Whitman Eye Center decided to invest in revenue cycle management (RCM) automation to reduce manual A/R workflows and improve efficiency. And that decision helped to decrease accounts receivable over 60 days by 38 percent within three months.
“We were able to improve, using this software package, our ability to organize claims in a way that maximizes the efficiency of our A/R staff, and I was able to, at that point, begin tracking their productivity,” Chapman said regarding the practice’s implementation of RCM automation software from MedEvolve.
Automation technology has enabled Chapman to create worklists for staff based on a number of factors, such as date of service, cash collection opportunity, and denial code.
“It really allows us to slice and dice, if you will, queues for each agent who is going to be working the accounts receivable,” Chapman said. “So, if I know somebody has much more experience in one arena or with one payer, I can focus their attention on that.”
A/R efficiency also improved since staff didn’t have to spend time switching between health IT systems to manage each account. Integration with the practice management system and the practice’s clearinghouse was an added bonus for Chapman.
“Instead of jumping back and forth between two portals for that account, they can work that queue inside of that one software package and it goes out and it’ll send claims back out to the clearinghouse,” Chapman elaborated. “At the same time, it’ll also update and add their notes and follow-up inside of our practice management system. It just makes it more efficient. It makes them more productive with their time.”
With automated workflows, Chapman noticed significant improvement in the areas that were the most challenging for staff: the 31-to-60-day aging bucket and the 60-to-90-day aging bucket.
Big improvements have tapered naturally over time, but RCM automation has refined the practice’s workflows.
“We’re not going to keep seeing those gains because we got on top of things,” Chapman explained. “It does help us stay running and running very clean and very efficient.”
Chapman’s staff, for example, can now identify high-value claims that will be worth the time and resources to chase.
Alternatively, staff can also identify low-cash opportunity claims and “not worry about those because, a lot of times, some of those small balances cost more for me to have my employees work than what our cash opportunity for that is going to be,” according to Chapman.
This, in turn, has boosted productivity among staff as well as satisfaction with their jobs. Chapman can also see the improvements in productivity happening and ultimately influence how the team is running.
“[The software] tells me what is in each person’s queue, how many claims are left. I can watch it on a daily basis,” Chapman said. “So, if one week I see somebody has slipped, I can find out why they weren’t as productive that week. I can also offer incentives or gift cards to the person who receives the most revenue in from the claims work in a certain amount of time. I can make it fun.”
Being able to track productivity via work queues has also allowed the practice to keep operations going when staff were unable to make it into the office whether because of the pandemic or even a personal decision to move.
“Previous to this, I didn’t have the ability for remote A/R staff, and now I do because I can track productivity and assign the direction I want them to go as far as insurance accounts receivable,” Chapman added.
With A/R management running more efficiently, Chapman is now focusing the practice’s RCM automation efforts on another pressing challenge: collecting patient financial responsibility.
“I’m stuck in this dichotomy of either you don’t collect from the patient and you send a ton of statements out and you increase the amount of bad debt that you take on or you are very aggressive in collecting and you have tons of patient credits that you have to staff extra for to get all these refunds out,” Chapman explained.
This area is ripe for RCM automation, Chapman continued, because software can make the jump between verifying a patient’s benefits, determining financial responsibility after cost-sharing, and estimating what they owe that day.
“That’s what I’m looking into next so that we can collect as appropriately as possible without the patient owing money or having to receive a refund,” Chapman stated.
But the sky is seemingly the limit with RCM automation, vendors just need to meet practices where they need to improve revenue cycle efficiency.
“What I’m waiting on is finding some of these software packages that are catching up to where we need to be so that I can utilize them,” Chapman said. “As we move forward in this healthcare environment, and specifically this insurance environment, we have a lot of plans that are becoming super narrow network plans or IPA-affiliated plans or ACO-affiliated plans, and the staffing required to administer or to see these patients is becoming, in my mind, a little too much.”
“I’m trying to think about ways to make our practice more efficient with less staff,” Chapman concluded. “And that’s why I keep looking for solutions that automate that process for us and allow us to be as efficient as possible.”
For More Information: https://revcycleintelligence.com/news/rcm-automation-boosts-practices-accounts-receivable-efficiency