Receivables management: Capture payment

A. Because of competitive pressures insurance companies have been extending their payment period. Because the provider has no contractual relationship with the payer, there is no great urgency for payers to take care of the obligation, and the provider has no legal basis to fall back on. This puts the provider in a precarious situation that affects cash flow and patient relations. If the payer does not take care of the claim, the account ages and the chance of collecting from the patient is greatly reduced, but if the provider goes after the patient prematurely, complaints about not billing properly arise. The provider's success—or lack of it—in collecting this segment determines the total receivable level and cost inefficiencies.

Too many claims are still filed manually. Even with electronic claims processing, only a few hundred out of nearly 2,000 carriers can receive an electronic transmission. Granted, fewer claims are denied, but the information can still have problems. This creates delays in payment.

Complicating this is the never-ending stream of new claims that need to be processed every day. Insurance companies are putting pressure on medical providers to file claims in a timely fashion or lose the right to be paid on that claim. There is a psychological impact that occurs in relationship to these new claims every day. Staff members have a tendency, as the claims get older, to allow them to sit on the books. The reason for this is that after they make three to six attempts to get an insurance company to respond, they tend to focus on the current claims where they have more success and receive faster responses.

Keith Lilek is CEO of A/R Allegiance Group. Reach him at klilek@arallegiance.com.