Take a road trip to improved collections

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Monday, March 27, 2017

The making of New Year’s resolutions is a customary tradition on Dec. 31. As the ball drops and the New Year is upon us, we look for ways to improve ourselves and our companies in a variety of ways. One resolution that should make the top of your list is improving your overall collections. With reimbursement levels at an all-time low, collections turnaround is more important than ever. Most people give up on their New Year’s resolutions by March. We go into the challenge with hope, faith and determination. But once we start feeling the pain associated with making the change we back off or give up completely. We give ourselves many “reasons” why we are failing and it can’t be done. Negativity creeps in and we just give up.  In 2017, let’s make the commitment to push forward and not look back.

If we equate our collections journey to that of an old-fashioned road trip, we can find many similarities. We start out with excitement, positive feelings and a sense of adventure. However, many times along the way the mantra becomes: “Are we there yet?” There are GPS miscalculations, wrong turns, and stops along the way to rejuvenate and rest for the next day’s drive.

So how do we take the road trip to improved collections? First and foremost, there is no “shortcut” to the collections formula. If determination and perseverance are part of the plan, then reaching your destination is guaranteed.

Setting the course

• Establishing expectations: The first step to improved collections revolves around the hiring process and job descriptions. Having the right people in place with well-defined roles and expectations, which are the basis for evaluating performance, is important. The skill and knowledge required to be effective in a team member’s role need to be described in the job description—it’s the foundation for training. Job competencies are essential requirements to successfully perform specific work functions and, therefore, are critical elements of their
position.

• Training: It is important to have an organized approach to training, no matter the size of your company. The biggest mistake companies make is lack of thought and investment in their training. Educating your team takes time, talent and treasure. Without effective training, goals, competency evaluation, and collections will not improve. The main reasons for low collections and high accounts receivable revolve around poor training and staff evaluation. Truly evaluating your team based on their productivity, errors, compliance and competency rarely occurs. The cause is that to evaluate these areas you need data. Many providers don’t know how to get the data and/or use it for the purposes of training and performance assessments.

What are the effects of a poor training program? Staff turnover, high denials, slow cash flow, high DSO, lower profitability.

• Analytics: Not all industry software programs provide functionality to draw out the information that companies can use to evaluate their businesses. Sometimes you can gain this information through custom reporting features within the system, the use of exporting features to Excel and/or Access or a combination of both to manipulate data for work queues, training, tracking and reporting. It is important that these data points are actually in the system to produce the reports that can be used to trend the big picture and then drill down to the details that foster best practice results. It is best if management determines the workload and the claims to be completed through data extraction/reporting and timely filing limits for claims when working AR and denials.

The key to analytics is to have people who understand the reporting mechanisms, formulas and algorithms. Personnel experienced in Excel and Access is important if the information can’t be gleaned through custom reporting through your software. Getting to the point where the data means something takes effort, diligence and dollars. Identifying movement in key data elements allows managers to move quickly to change behavior and also focus their energy where it is most needed. Examples of areas to trend are: Payments by age and by payer source, revenue, submissions, denial rate, AR by age and status, pending and held revenue, and overall DSO and by payer.

By trending this information, management can set goals for each category and then monitor for results. When establishing target goals for each data point, it is important to acknowledge your starting point and work incrementally toward the desired outcome. 

Conclusion

Make that New Year’s resolution a permanent habit by committing to using data to drive performance and behavior. If you don’t understand how to gather the information, invest in the training needed to produce the reports through your system, Excel or Access. Start with the basics of a good job description and approach training with a plan and purpose. Then use report analysis to gain solid information to improve outcomes in the revenue cycle. By staying focused and determined, solid business decisions will be made and profit potential increased.

Sarah Hanna is the president of ECS Billing & Consulting North. She can be reached at sarahhanna@ecsbillingnorth.com.