Article

10 Steps to an Efficient Accounts Receivable

Maintenance of your AR system allows you to invest in your patients and better serve your business

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Optometrists are typically great at being Santa and giving things away. However, some of us have a more difficult time collecting money. Consider this: A practice that has an annual gross revenue of $600,000 should look to keep the total amount owed to the practice at less than $50,000, which is also the average 30-day gross revenue, according to Neil Gailmard in a “Management Tip of the Week.” That’s a significant number of services, glasses and contact lenses for which to remain uncompensated for any length of time.

Staying current on accounts receivable (AR), collecting payment for services and products rendered, allows our businesses to thrive and, as a result, to purchase new technology that aids in providing the best care to patients.

I started my practice four and a half years ago. Back then, I was a bit na├»ve: I thought everyone just paid their bills like I did, and I relied on one staff member to take care of AR. Nine months after opening my practice — following the implementation of a new EHR system (see “Software” p.21) — I was able to review AR reports. I saw balances 90 days to 120 days outstanding and whole insurance balances or remaining patient balances written off for avoidable reasons, such as missed deadlines to submit the correct insurance claim or a desire to avoid patient conflict.

Now, a system is in place to avoid these issues; these 10 steps outline that system.

1 ASK FOR ALL THE PATIENT’S INSURANCE COVERAGE

While scheduling appointments, make sure the staff asks for the managed vision care plan and the medical insurance information of every patient, every time. Even if you saw a patient recently, verify nothing has changed. The patient may have started a new job, retired or experienced some other life changes that can affect coverage, and therefore, whether claims will be accepted.

2 VERIFY BENEFITS ONE WEEK PRIOR TO VISIT

Ask staff members to check each patient’s coverage one week before the appointment. Place a call to patients who do not have the coverage they provided or who are not eligible for their exam and/or materials. This leaves plenty of time to get back to the patient and fill in a canceled slot, when necessary.

My staff goes back through the schedule the day prior to exams to see whether any patients have been added, since insurances were verified the prior week, and to verify any necessary changes have been made.

Common Pitfalls/Mistakes

AVOID THESE MISTAKES in your AR system:

→ Not having a system in place/no follow-through

→ Not monitoring the reports for your system

→ Allowing one staff member to have full control of the system

→ Being afraid to ask for payment for your services/products on the day you provide them

→ Offering partial payment at time of service/order

3 INSTRUCT PATIENTS TO BRING COVERAGE PROOF

Use patient communication technology to send text messages to patients about what to bring to their exams, which should include their coverage cards. This is the final verification to ensure medical and/or managed vision care coverage. For patients skeptical about providing their medical insurance card, the staff member can remind them that O.D.s can submit claims to a patient’s medical insurance carrier if the reason for coming in is a medical condition, such as glaucoma. Also, let these skeptics know that providing their information ahead of the appointment will save them wait time in the office.

Require that staff members scan the front and back side of medical insurance cards into the EHR, so your office has the information on file to reference.

4 CODE PROMPTLY

After the exam, code it appropriately, and apply the charges to the patient and the patient’s medical insurance or managed vision care plan, and leave the claim pending in your EHR.

As a check and balance, I ask a staff member to run a report of all the pending claims made throughout the day. Each pending claim is reviewed by a staff member to make sure all the numbers from the medical insurance card and/or managed vision care plan are input correctly, before she authorizes the claim. It is then ready to submit. There are three staff members at my practice who work through the AR process — providing checks and balances.

5 COMMUNICATE BILLING WITH PATIENTS

Terminology is critical in maintaining an efficient AR. In the past, we would tell the patient what her balance was for services and materials and say, “Half is required to place your order.” Now, we say, “Your balance is $xyz. How would you like to pay for that today?” It is amazing the difference in total balances we are able to collect on the day the patient places the order vs. collecting half and paying the other half when the patient picks up her products. Benefits to this process include saving money on fewer credit card transaction fees; less staff time spent on one transaction per patient and happier patients when they pick up their glasses or contact lenses, as they have no remaining balance.

Copays, specifically, are almost always collected on the date of service. However, for those patients unable to pay in full, we ask them to pay in full for their services and put half down on the products they have purchased. If they are unable to put anything down on the products, we hold the order until at least half down is collected. Some patients will comment that they need to wait for their next paycheck, etc. (We also offer CareCredit, which eases the burden on patients and on the practice in this waiting period.)

Regarding medical services, remind the patient that you will submit the claim to her medical insurance and that both the patient and the office will receive an explanation of benefits. Then, bill the patient for any remaining balance. Before we explained this to our patients, we had many questions when they received a statement, as they assumed their medical insurance would pay for everything.

6 UTILIZE A CLEARINGHOUSE

Once medical claims have been reviewed by the aforementioned staff member and are changed from “pending” (work still needs done on them) to “authorized” (claim is ready to submit), a staff member is able to run a report that nets all the claims to be submitted. With a click of a button, claims are sent to a clearinghouse, or an agency that submits and collects on insurance claims for you. (Examples of these agencies for eye care include: TriZetto [formerly Gateway EDI] and Apex EDI.)

The clearinghouse is beneficial, as it detects claims that would be denied by third-party payers and flags them for correction by our office (via its website). (Note: Some third-party payers still require a printed claim.) Once submitted to the insurance company, a clearinghouse will have payment or information on a claim after about a week.

This service has been a huge time-saver in getting claims submitted in a timely manner and resubmitting, if needed, so that we can collect payment as soon as possible, thereby lowering our AR. (Tip: When utilizing a clearinghouse, make sure to archive old explanation of benefits, so the screen is not overwhelming with too much information on it. It is then easy to see only the new payments you have received.)

What To Say

SOME HELPFUL SCRIPTS for specific billing-related situations.

If a patient tells us after the exam that she doesn’t have money with her to pay the copay for the exam: “Are you able to bring payment to us by the end of the day?” or “Are you able to provide the balance tomorrow?” Try to get the patient to commit to a specific time frame to come back, so she is held more accountable to return.

If a patient refuses to pay for her products: “We are unable to place the order until we receive at least half of the payment.” If a patient has been known to refuse payment in the past, or if she has taken a long time to pay the second half, we put an alert in the EHR, and we require payment in full before we place her next order.

If a patient refuses to pay what her medical insurance did not cover: “We will need to collect the balance and payment in full of the next service. This will be required before your next exam.”

7 EXECUTE INVOICES

Take note of payment schedules with your contracted plans to work out an appropriate timeline for invoicing patients. For example, some managed vision care plans send payment on day 15 and 30 of the month, so we use day 16 and 1 of the month to input all managed vision care plan information into our EHR and reconcile accounts. Medical insurance claims come back any time during the month, so they are worked on as such.

Between day 15 and 20 of each month, we send out patient invoices. Between week 1 and 2 of the month, we call and send texts to those who have not yet paid their bill. If no payment is received, we send a second invoice between day 15 and 20 of the next month. A second phone call and text occur if no payment has been received by week 1 to 2 of the following month. This provides your patients with multiple opportunities and reminders to clear their balances with your office. (Tip: If you are able to connect with a patient, ask her for a specific time when she can come in to pay the bill. We then put that day and time on our calendar in our EHR, so that if we haven’t received payment by then, we will call and text to remind the patient of the missed payment.)

8 SUBMIT TO COLLECTIONS

We try to avoid using our collection company because it keeps 33.3% of anything it collects. (If you use a collections company, be aware of its fees.) As such, the fourth invoice we send, following the same system as outlined above for the third and fourth months without payment, says: “Final Notice: Going to Collections.” Sometimes, just telling a patient that she will be sent to collections is the nudge she needs to pay her bill.

Another thing to note about your collections company: minimums. Our collections company does not go after balances of less than $25. This is a great reason to collect co-pays on the date of service because many times the balances that remain under $25 are from those who have not paid their copay — and these fees add up.

If a patient has been sent to collections, we put an alert associated with her name in our EHR. The alert pops up on the screen any time a staff member pulls up the patient’s name to remind the staff member that the patient has been sent to collections in the past and, as a result, all payment must be collected in full on date of service. Staff members will call patients before their appointments to let them know that payment is due in full when they come in for the exam to avoid the patient coming in without payment — however, I have never refused service to a patient who didn’t pay.

In the case of a balance on the account of $25 or less, we write off the balance to clear it from our AR report, but create an alert that signifies this balance needs to be paid before we will see the patient again. In this case, the staff will be alerted of the balance when the patient calls to schedule the next exam and will remind the patient of the outstanding balance.

9 REVIEW AR MONTHLY

Review your AR report monthly, containing total balances (patient and insurance) to be paid by the age of the outstanding debt (in days): 0 to 30, 31 to 60, 61 to 90, 91 to 120 and more than 120. Do not leave it to chance that it is being managed correctly. I now meet with my office manager monthly to go over our results and come up with ideas on how to improve where we may have a weakness.

Software Support for AR

A NUMBER OF SOFTWARE SYSTEMS, including EHR, patient communications, practice management and others can assist with accounts receivable. These systems include:

→ 4PatientCare

→ BinaryFountain

→ Advantage-branded solutions (Compulink Healthcare Solutions)

→ Crystal Practice Management Software

→ myCare-branded solutions (Eyecare Leaders)

→ Eyefinity and ExamWriter (Eyefinity)

→ Foxfire Systems Group

→ MaximEyes

→ Practice Director

→ PracticeEHR

→ Revolution EHR (rev360)

For a listing of patient communications/relationship management technology, see p.25. And for an updated listing of software that may assist in AR, view the online version of this article at OptometricManagement.com .

10 CHANGE THE SYSTEM

If your system is not working well, don’t be afraid to change and try something different. The worst thing you can do is do the same thing over and over and expect different results. That’s insane. (Literally, that’s the definition of insanity.) OM