For most companies, the speed of business establishes the critical difference between their survival or operational shutdown. Performing in a culture built for speed requires that businesses become more agile and innovative. The immediacy of communications fuels this turbo-charged culture, and medical practices are not the exception. Today, technology has transformed traditional reimbursement methods allowing electronic claim scrubbing that facilitates submission of cleaner claims and reduces denials or rejections while accelerating reimbursement and overall payment optimization.
Measuring healthcare reimbursement processes is an important way to assess the health of a medical practice, and reducing reimbursement times is crucial to achieve optimal performance. For this reason, reducing the amount of days claims remain unpaid must be the goal at all times. One useful Key Performance Indicator (KPI) consists of calculating the average number of days it takes a medical practice to receive reimbursement from billed charges. This metric is also known as “Days in AR”.
HOW TO CALCULATE “DAYS IN AR”
Although it may be more than one way of calculating it, a common form is to average daily charges for a set amount of months (3, 6, etc.) then, the total accounts receivable is divided by the average of daily charges resulting in the average amount of days it takes a medical practice to receive reimbursement from payers.
Claim adjudication times vary from payer to payer taking an average of 15 to 45 days. Industry standards for “Days in AR” are as follows:
- 30 days or less – Best Performer.
- 40-50 days – Average Performer.
- 60 days or more – Under Performer
HOW TO REDUCE LONG DAYS IN AR
SPEED UP CLAIM SUBMISSIONS
Taking easy steps as to capturing charges electronically, signing up medical notes as soon as possible, and reviewing missing or incorrect data will allow faster coding and eliminate typical reasons for claim submission delays.
SCRUB CLAIMS BEFORE FILING
Scrubbing claims prior to submission will determine whether your claims will go through the clearinghouse without rejections and make it to the payer on first try. Check for mistakes or omissions in patient demographic or insurance data; valid and matching diagnosis and procedures; missing authorizations, etc. In addition to your own scrubbing, your clearinghouse will have their own verification parameters to conduct their own claim review.
DENIAL MANAGEMENT PROCESS
After successful transmission of your claims, monitor their status periodically. Some claims remain unprocessed and you do not want to find out later when you could have addressed it earlier. Resolve any denials or rejections quickly. Appeal processes may take longer to resolve, but keep in mind that your denial rate goal should be under 3%.
WORK AGING AR PROACTIVELY
As claims remain unpaid, they fall in aging time categories, typically 0-30, 31-60, 61-90, 91-120, etc. By overseeing the reasons for non-payment periodically, you can identify potential problems and harmful trends. As a general recommendation, check any unpaid claim even current claims at least once a month.
Improving your accounts receivable turnaround may be hectic, but not difficult. Just as many RCM processes, it requires determination and organization. Is your practice in need of faster reimbursement of outstanding claims?
A proven strategy for the success of any medical practice consists of working with a proactive and organized team that understands challenges, and apply experience to overcome obstacles for faster reimbursement.
Do you want to know more of what we can do for your practice?
Get in touch:
Phone: (407) 745-1849