It takes how long to get paid? AR days can be cut
File clean claims to get money faster
Just four years ago, accounts receivable days outstanding for HomeReach Homecare in Worthington, OH, reached 116 days. After investigating reasons for the delays in payment and implementing changes that solved problems, the agency now enjoys an average of only 43 days.
With no hope of increasing reimbursement levels, home health agencies need to carefully evaluate their claims processing and collection activities to ensure that they maintain optimum cash flow, say experts interviewed by Hospital Home Health.
"Our first step was to get our clinical and billing staffs working together," says Michael S. Ellis, RN, BSN, director of clinical services for HomeReach.
Opening the lines of communication
When researching the accounts receivable process, Ellis and other staff members discovered that not only did the clinical and billing staffs not talk to each other, neither group understood what the other one did in terms of collecting information needed to file claims.
Another key to reducing accounts receivable days is to verify coverage up front, says Terry Cichon, CPA, director of homecare operations for FR&R Healthcare Consulting in Deerfield, IL.
"I believe that the 85% of all claims that are paid with no problem are more a matter of luck than a matter of a good billing process," she says. "I frequently encounter agencies that don’t verify eligibility for coverage," she explains.
Medicare-approved agencies should be checking the Common Working File that is accessible on-line through the Centers for Medicare & Medicaid Services’ (CMS) web site, Cichon says.
"This site will show you if the patient is covered and eligible. You’ll also find out if the patient already is in an open home health episode, which may mean that the former agency neglected to discharge the patient in a timely manner," she adds.
Make sure to identify Medicare patients who are members of an HMO, Cichon warns. While patients or family members may not be aware that they are a part of an HMO, the easiest way to find out is to ask who pays for their prescription medication, she suggests.
"If the patient says that Medicare pays, then he is in an HMO," she says. If you do provide service for an HMO patient, the claim will be denied and there is no appeal, Cichon adds.
If your patient is not covered by Medicare, be sure to check with the private insurance company to verify coverage as well, points out Nancy L. Boyd, senior consultant with Boyd & Nicholas, a Rohnert Park, CA-based financial consulting firm that specializes in home care. With Medicare or other insurers, be sure that you don’t just accept the word of your referral source, she adds. "If you don’t check coverage and eligibility, you will have a hard time appealing your denial," Boyd says.
Be thorough with claim forms
"Be sure that you file a clean claim," Cichon adds. Remember to include the Social Security number, patient birth date, and relevant dates related to the start of service, she says. Also, be sure you submit your patient’s name exactly as it appears on the Medicare card, she points out.
"Even if the name is misspelled on the card, submit it misspelled the same way until Medicare corrects the records and issues a new card." Otherwise, the claim will be rejected, Cichon explains. Be aware, too, of the most common reason for CMS returning claims to providers, she suggests. Knowing what to double-check helps prevent the mistakes in the first place.
The HomeReach staff submits claims twice a month, Ellis says. "Although we’ve been told that we should submit daily or weekly to improve cash flow, we believe that the extra time we take to double-check our claims and documentation is the reason we have a claim error rate of less than 1%." "For us, it is more efficient to submit the claim correctly the first time rather than having to correct errors later." he adds.
A big mistake made by many home health agencies is not responding to additional development requests (ADRs) from Medicare, Cichon says.
"ADRs are requests for additional information related to the claim. If you don’t respond within 30 days of the date of the ADR, the claim is automatically denied and there is no way to justify your actions, so you’ve lost," she explains.
Hospital-affiliated home health agencies, in particular, are vulnerable to mishandling ADRs because they may not be the recipient of the ADR letter, Cichon says. "The hospital billing department may receive the request but not forward it in a timely manner to the home health agency," she says.
If the ADR makes it to the home health agency, the deadline may have passed, or there may not be enough time left to collect the information and send it to the Medicare intermediary, she adds.
To avoid these problems, check the status of your claims on-line one to three days after submission, Cichon says.
"You will see if an ADR is issued, even before you would receive it in the mail." After ascertaining the request has been issued, start collecting the documentation you need to provide and mail it 10 to 15 days before the deadline, she suggests.
Keep extra copies of what you send
If you are responding to more than one ADR in a single package, include a cover sheet that lists all of the patients included in the package, adds Cichon.
"If you list five patients on your cover sheet but only enclosed four records, you will get a call to let you know that a record is missing," she says. This is why mailing the response 10 to 15 days early is important because you have time to send the extra record, she adds.
When mailing your response to an ADR, make two copies of what you send, Cichon says. One copy will remain in your file, and the extra copy is on hand in case your first package isn’t received. Having the extra copy shortens the amount of time you need to send the second package.
"Also, be sure you send your response by courier or certified mail so that you have a signed receipt showing when the package arrived and who accepted it," she says. The intermediary has 60 days to review and decide on the claim, she adds.
Hospital-affiliated home health agencies also need to work with the hospital’s billing department to make sure that lines of communication are open, Cichon suggests.
"Only the home health agency knows when a request for anticipated payment can be sent, or when the documentation for the final claim is ready," she says. Another hurdle to overcome is hospital software often can’t track the items needed for home health claims. Cichon recommends that home health agencies use software that can track the following items:
- all signed physician’s orders;
- therapy downcodes;
- therapy upcodes;
- unplanned low utilization payment adjustments (LUPA);
- verified documentation for all visits;
- all nonroutine medical/wound supplies billed.
If your software doesn’t check for these items, someone on staff should, she recommends.
The billing process doesn’t end with submission of the claim, Boyd points out. You can keep track of Medicare claims status on-line, but private insurers require more effort, she says. "If you submit your bill through an automated system, rebill every 15 days." If you must mail the claim, be sure to send follow-up bills through certified mail, she adds.
On the 45th day that claims have been with a private insurer, call to check on the claim. "Be organized and have all claims that have been submitted to the same insurer grouped together," Boyd suggests.
You want to be able to ask about all claims that are outstanding for 45 days in one phone call, she says.
If the company has a policy that the customer service representative only can check on a certain number of claims in one phone call, check that number of claims, hang up, and immediately call back, Boyd adds.
"If you’re organized, the process of calling insurers can be handled efficiently," she says.
While paying attention to accounts receivable days and putting processes in place to track claims and make sure they are submitted properly takes time, it is well worth it, Ellis says.
"When we started our efforts to reduce accounts receivable days, we were not in great financial shape," he says. "Now, we are financially stable with a positive cash flow."
[For more information on speeding up collection, contact:
- Michael S. Ellis, RN, BSN, Director of Clinical Services, HomeReach Homecare, 404 E. Wilson Bridge Road, Suite D, Worthington, OH 43085. Telephone: (614) 566-0852. E-mail: [email protected].
- Terry Cichon, CPA, Director of Homecare Operations, FR&R Healthcare Consulting, 111 Pfingston Road, Suite 300, Deerfield, IL 60015. Telephone: (847) 236-1111, ext. 333. Fax: (847) 236-1155. E-mail: [email protected].
- Nancy L. Boyd, Senior Consultant, Boyd & Nicholas, 5550 State Farm Drive, Suite C, Rohnert Park, CA 94928. Telephone: (877) 424-6527 or (707) 585-9317. Fax: (707) 585-7633. E-mail: [email protected].]
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