With various operations taking place under one roof, the central billing office is amongst the ones suffering the most. One operation amongst many includes denial write-off which has increased substantially in recent years. Their increase is defined by 79% but still, the billing office personnel have not properly worked on it. They have a reason to contribute resources to it but strategies are yet to be developed. With proper effort, the correct ones can help to tackle this in an effective and long term manner.
The accounts receivable management or billing staff does not always take part in denial resolution efforts. This abandonment has resulted in 65% claims never being properly processed. They are abandoned once they reach a specific age. Thus, they never get to be corrected or re-submitted. This is the result of a belief that the scarce resources of a business can be better utilized somewhere else. Considering this thought has been instilled amongst the staff, the hospital ends up with a poor follow-up rate.
The staff is unwilling to chase after claims that surpass 300 days. Therefore, these claims are frequently written off which leads to a considerable amount of insurance dollars left behind.
In order to handle such problems rising within the hospitals, decisions are taken through the consideration of a cost-benefit analysis. Certain organizations feel like the best way to deal with a highly-aged claims problem is by providing a certain resolution time-frame. This means that the AR or billing staff is given a specific amount of days. This duration is when they are encouraged to work upon aged claims. In case, the management is unable to reach an appropriate resolution within that time, the claim is written off. This seems like one way to make sure that resources are not wasted while making sure denial volume decreases.
According to the studies conducted, the results have portrayed that a number of hospitals are facing issues. Approximately one-third of the facilities are facing bad debts. These bad debts range from a hefty amount of $10 million to $50 million. Some institutions may even have greater than $50 million bad debts. One of the reasons behind such a high bad debt can be classified as insurance AR. This is due to the absence of effective strategies that can help in insurance collection
Solution and It’s Benefits
Fortunately, many hospitals are starting to realize the importance of proper resolution for highly-aged claims. In order to deal with their financial problems, they are viewing these claims as revenue generation options. This realization has led to hospitals hiring the services of prewrite-off AR recovery firms. The specialization of these firms can prove helpful for the hospital in handling the highly-aged claims.
Taking off this workload and resolving it appropriately can prove helpful in various ways. These firms can also make sure that the hospital is given all the insurance payments due to it, whether the claim has passed a certain age or not. Other benefits that the hospital can enjoy through such outsourcing are:
- A reduction in bad debt reserves that bring stability to the firm by increasing cash flow.
- The aspect of almost eliminating all chances of writing off a claim.
- An encouragement for primary AR vendors who may wish to make the best of the opportunity through optimization.
- Ease for the hospital in terms of performance evaluation. They would have less burden to deal with. Moreover, they’ll be able to come up with a clearer image of the business’s position.
- The hospitals will be able to focus their energies on other aspects and bring about more efficiency.
Zero-Percent Write-Off Strategy Incorporation
A strategy that can prove helpful for the business is one where time frames are kept in a more organized manner. These time frames would be allotted to pursuing the claims in order to have greater focus. Such a practice would result in the possibility of no denials taking place. The primary AR management must be considered as the first option before the claims are outsourced to a specialist. The claims must be sent to the specialist if the management is unable to resolve them on their own. In cases of high inventory, the internal staff can consider turning to the pre write-off insurance collection vendor.
This choice would help the hospitals to ensure that all the dollars owed to them are collected timely. The finances would be easier to organize in this way as well. This means that a zero-percent write-off strategy can prove quite beneficial to the organization. To make sure that any chances of loss or as such are eliminated, the claim must be exhausted. It should not matter whether the balance is a small or large one, either may prove helpful.
An aspect to incorporate into your strategy is research regarding the origin of the delayed, denied or underpaid claims. Finding out this cause can help the organization to come up with proactive measures. Measures which are aimed to make sure no such problems takes place again.
When to Outsource?
In order to decide whether or not you require the services of pre write-off AR assistance, here are some questions;
- Are there any claims present that are aged past 300 days?
- Has a systematic process for accounts receivable been established?
- Are the claims aged past 300 days still being worked on?
- Has a time frame or process been established in regards to writing off claims?
Technology to the Rescue
This field has also benefited from the advancements in technology. Sybrid MD has introduced technological advancements to its clients. Through its digitalized methods, Sybrid MD is able to provide the organization with 70% cash. It decreases the time and effort consumption whilst guaranteeing effective results. It does not only help improve cash flow but also finds ways to improve the revenue cycle. Incorporation of such resource in the strategy can prove significantly advantageous for the organization in several ways.