Amidst rising costs of operations and declining reimbursement rates; increasing Accounts Receivable (AR) days is a major concern with physicians as partly paid, late or denied payments can significantly impact a practice’s bottom line.
Minimum payment days: On filing a clean claim the minimum time a physician will be paid differs on the payer: Federal payers – (Medicare/ Medicaid) – pay clean claims within 13-15 days and other commercial payers – pay clean claims within 27 to 30 days
Industry standards: Claims generally take anywhere between 40 – 169 days to be paid, with an AR cycle of generally 60 90 days
Get It Right the First Time! -Claims are typically delayed or denied due to human error or misfiling. Additionally a variety of factors can influence why claims are not paid immediately, including:
•Claim may not be for a covered contract benefit
•Patient’s preexisting condition is not covered or patient coverage has been cancelled
•Case is under consideration as Workers’ compensation (WC) is involved
•Payer considers the physician’s procedure experimental
•Preauthorization for a procedure or for hospitalization was not obtained
•Services were provided prior patient’s health insurance contract went into effect
•Payers may ask for additional information
•Payer has requested information about another carrier for coordination of benefits
How to get paid faster?
Self-assessment is a vital step your practice can take to better understanding the processes used and also discover opportunities for improving the processes to help improve payments and AR. Following questions can assist Physician’s in determining cause and also do a maintenance assessment:
1.How many claims were submitted in the recent 30 day period?
2.Of those claims approximately what percent were denied and most frequent reasons for the denial?
3.Of those claims approximately what percent were delayed and most frequent reasons for the delay?
4.Does the denied or delayed percent vary between paper and electronic claims?
5.Does the billing staff track the percent of claims that are denied on the first submission?
6.Is there a policy in place for bad debt collection?