#172 Will Your Old AR Ever Pay?

If your practice has anywhere from $50,000 to $500,000 sitting in the 120+ day Accounts Receivable bucket, we have bad news: most of it isn't coming back. And the reason isn't what your billers are telling you. 

Old AR is rarely a payer problem. It's an accountability problem. 

We recently took over the AR for a multi-specialty group whose 120+ bucket had ballooned past $300,000. We didn't find complex coding disputes. We found unresolved eligibility issues, missing EOBs sitting on payer portals, ignored write-offs, and billers who were "statussing" claims instead of actually working them. 

In this episode, we break down the 6 real reasons claims go to die — and the top 3 strategic oversight actions you must put in place today to hold your billing team accountable and stop the bleeding. 

Stop guessing about your financial health. Take our free 60-second Practice Revenue Leak Scorecard to see exactly how much revenue your practice is leaving on the table: https://eligibility.natrevmd.com/nrm-revenue-scorecard-v3 

Transcript

SPEAKER_00 0:02

All right, how many times have you thought about changing billing teams, but you're sitting there thinking, what about my old AR? What is going to happen with my old AR? Welcome to NatrevMD, a podcast where we share tips on optimizing medical billing and improving practice efficiency so you can have the business of your dreams. I'm your host, Dr. Heather Signorelli, founder of Nat RevMD. Let's get started. This week we're going to talk about that over old, that, you know, over 120-day AR bucket or even old, old AR. And now you're trying to figure out, okay, I want to make a change from a billing team, but what's going to happen to that? Or why did it get there in the first place? And what can I do about it? So we recently took over a practice, uh, a multi-specialty group. Their 120-day bucket plus was over 300,000. When we audit it, we didn't find a lot of complex coding issues, but we found some basic fixable errors that just were ignored. And obviously, then you're trying to understand if each claim is worth going after in order to capture additional revenue. So things like unresolved eligibility issues, missing EOBs that were never looked for, money that was already posted and received into the bank account, but never posted, things like claims that were just statuses. And so now you're in a situation where you're paying somebody else to clean up the work. Somebody else can do the work. So to answer the question, can it be recoverable? Yes, it can be, but there's a lot of truth that you need to understand how it got there so that you can understand and create a plan of how to manage it moving forward. So today we're going to break down exactly why your old AR gets stuck and some strategic oversight actions that you can put in place to hold your billing team accountable. Or alternatively, if you are looking to make a shift for a new billing team, you can understand the conversation that should be had in order to manage that old AR moving forward and also manage expectations so that you're budgeting staffing appropriately to manage that, but then not getting underwater by paying somebody too much money and in a situation where you're never going to get paid for that because it is very easy to do. So before we dive in, um, if you want to know how much revenue your practice is leaving on the table, take a look at that practice revenue week scorecard, a few questions, and you'll see exactly where they are. So that link is in the show notes. All right, so let's talk about the reasons your old AR exists in the first place. So when you ask a biller why a claim is in that over 120, over 180-day bucket, they're usually saying the payer is stalling, right? And the whole truth is really that there are real reasons why claims sit in that bucket. And we're gonna go through those today. So the first and most common that we see is unresolved eligibility and COB issues. So that's coordination of benefit. So front-end failure that becomes a back end absolute night nightmare. Um, and a claim dies there because the patient's coverage lapsed. There wasn't eligibility. We don't have a true subscriber information to be able to bill to the correct insurance, or there was a coordination of benefit issues where Medicare is saying that another payer is primary, but the billing team gets the denial, but they don't have the information to update the insurance or fix the COB because we can't get a hold of the patient in order to fix that. So, really, really critical. And COBs are really, really hard because even if you do eligibility and you find, okay, Medicare is active, checks the green box from an eligibility check. If you're not specifically asking patients, do you have more than one insurance and understanding who is primary or dealing with those COB issues when they come in and having a triage plan? You know, for us, we're putting them on the issue tracker that the front office at the office is calling the patient to fix that COB issue. You always have the option of, you know, flipping it to patient and then the patient gets the bill and then they're calling back with their insurance information. Not always the most pleasant way to fix that, but if you're really struggling to get a hold of patients, that is another issue. But so it's really that gap in accountability that this kind of AR grows over time, right? So if you don't have a process to fix this, you know, again, like our issue tracker, or if practices aren't dealing with things that are on the issue tracker, that can result in um and issues with your accounts receivable over time. Now, number two, unsubmitted medical records, right? So the payer sends a letter requesting medical records to process the claim. Maybe the the biller logs that request and then does nothing. Let's hope that's not the case, or they ask the clinical team for the records, but the clinical team forgets and then the biller never follows up because, again, there's a lack of an accountability process. So again, that's why that issue tracker for us is so, so critical. So then the claim sits there at limbo, maybe it denies for lack of documentation, and then maybe it even gets to the point where it's past timely filing. So, really, really important to have that accountability loop that when there's an issue, that you've identified what the issue is, and that there's a handoff to the person who's going to help pull those records. Really, really critical that you have this. The other is just write-offs that were never written off. So this is obviously going to inflate your AR and it makes it look like you have a chance to go get accounts or to go get, you know, receipts that maybe are not even possible. And so these could be claims that were bundled or that you had a contractual obligation to write something off and it was just never written off. And because your billing team maybe didn't have a clear process for tackling write-offs, maybe they just were afraid to do it without permission, but they didn't have a process to get permission in the first place, or maybe they asked for permission and then didn't get it. And so then it just sits there. That is a big reason why you can have a high accounts receivable and need to have again a good process for write-off approvals. Number four is one of my favorites, unposted small secondaries. Oh man, this is on one hand, on a billing team's side, you know, in their defense, this is one of the most painful areas, right? Because you have small secondaries, they're paying, you know, their$5.21. Um, or they the, you know, I don't very, very small balance, right? Maybe it's$15 or$20. But so you've got something that's paid to the secondary. And it may have even already been paid into your bank account, or they may have sent a check and you cashed it. But if you don't have a really good process of getting those EOBs, so you know what to post, um, then it just sits there in old AR. And again, it's in charges, right? It's sitting there as a$50 charge when you only are going to get paid$5 or$20 or whatever. And so the secondary payer has paid it, but because it's a small amount, the biller never bothers to post it because they don't have an EOB and they don't have a good process to find the EOB because it's not on a portal that they have access to or that anybody has access to. This is one of the most time-consuming and pain things, uh, but it is necessary in order to keep your AR clean. So you do have to manage that small balance uh secondary, you know, payments. You have to find the EOB, you have to call. Sometimes they won't give it to the billing team, so you have to have the office call, but you multiply that by, you know, 500 patients, then you can have$10,000 of Phantom AR clogging up your report. So when you hire a new billing team and you think, oh, well, there's all this AR that I'm gonna get all this money for, and they get in there, a portion of that could be due to this. A, you're not gonna get paid anymore, right? Money may have already hit your bank account. B, there's small balances anyway. It's just more finding the EOBs and cleaning it up. So this is such a common reason of why you have high AR over 120 plus days, and it may not be true receipts that you're ever gonna capture. So you go to to hire somebody on an hourly basis to clean this up. You just have to recognize you don't see this stuff. Like I can't pull a report and tell you the reasons why your AR has all these things. You can't, you can't see that. You don't see it until you look into each individual claim. Like, what are the notes on the account? Where's the EOB? Call the payer, what was already paid? Okay, who, who, who and when paid it? Where's how do we get the EOB? Do we have payer portal access? I mean, all of these things add up to why it takes so much time to clean up the old AR and why, you know, a new team can take it on and they should take it on if you need them to, but it just you have to recognize all these things. Um, and that's why I think it's really, really important to set a budget when you are having a new team take this on, right? So you say, okay, you've got somebody four hours a day, five days a week working on this, and then let's regroup in a month and see how much of that is, you know, could be collected. Again, it typically will take at least six weeks before you're seeing some of that old AR pay off, because it takes time to get access to all the payer portals to understand what's going on with the claims and then start managing each claim one by one. So the fifth reason is similar to kind of what I said, but on a larger scale and not just in relation to uh secondaries, is just missing EOBs and a lack of bank of reconciliation. This is terrifyingly common. So if you're not doing a bank reconciliation, either your billing team needs to do it or the office team needs to do it, but somebody needs to do it. And so this is a very, very common problem where a payer process is a batch of claims, but they don't send an ERA. They post the EOB on their web portal. And if your belling team doesn't have a really good bank reconciliation policy, they never see that ERA, right? They don't know that that EOB is somewhere. And so you've received the money, they don't even know that you've received the money because they don't have a bank reconciliation process. And then you've got, you know, sometimes a big check that was to be posted, but nobody even knows to post it. And so it looks like really high AR. And then if your team doesn't have a really good process for managing the AR, because they should catch it when they call on the claims and they see that it was paid, then they go find the EOB. So there is a process to fix this without a bank reconciliation process, it just takes longer. But if if both of those processes are broken, so you don't have a bank reconciliation process and you're not really good at following up on AR, then both of these could mean that you have a big amount of money that came into your checking account, but was not posted to your system. And this obviously has a ton of downstream impacts, right? So obviously your AR is bloated, but it looks like you know you've not made as much money, or your physicians who you pay commission on, they're not getting paid for the work that they've done. And so lots and lots of downstream issues on this. Really, really important fixes to this. Have a bank reconciliation process. Make sure that every deposit coming in is getting posted. And that way you can track down missing EOBs. Or alternatively, you know, have heard me talk about missing checks, right? Where you see an EOB come in or an ERA come in, but you have no money because the money was lost. And now you got to go find it to get posted. Obviously, number six, we've talked about this statusing instead of working claims. Obviously, going to be a big issue when it comes to managing your AR, you just claim denies over and over and over again. And so um, if they're saying it was denied that somebody's gonna follow up or somebody's gonna do certain action, or they need the practice to complete something in order to deal with it. If anything in that loop is broken, then the denial just sits there, or they call again and they just get the same message. So they're statusing it, but not actually getting the claim to resolution because the claim needs to resolve in some way, right? It either, you know, it's a true denial and you can't get paid on it and it needs to be written off, or it's a denial that can be managed and can get paid through, you know, resubmission, fixing codes, sending in medical records, whatever it is. Um, but then they have to be able to do one of those two pathways. Otherwise, it just sits on the accounts receivable. All right, so how do you fix this, right? So you're obviously not going to fix it by yelling at your billers and telling them to just work harder. You have to have a really good process and strategic account oversight in order to build in an accountability loop, right? And so here are the top three things that you must do. So number one is obviously really having a good write-off protocol, right? How do you do that? When do people, you know, if it's a contractual write-off, obviously they should be, you know, don't need approval for that. But any non-contractual write-off needs to be get approved by somebody in the office or at a managerial level, or you create a process of here's what you can write off, here's what you can't write off. So obviously if a claim is bundled, that could be something that, you know, makes sense to write off, as long as you've double checked that it's a it's a true reason for a bundle and you can't resubmit with a different set of codes or modifiers to make sure that it's it's justified. So really important to do that. Next is really just having that monthly bank uh reconciliation. So you cannot manage AR if you don't know what has actually been paid, deposited, so that you can track missing EOBs and make sure that every single month your total deposits in your bank account do show compared to the payments posted. Obviously, this can get a little wonky with uh, you know, bank timelines being on, you know, may hit on the 30th, but you're not posting it to the first. And again, that may be, you know, very, very uh acceptable, but you just have to have a process that you can make sure. We track this. So we pull the bank deposits from the read-only bank access. And then we're just tracking, okay, posted, not posted, or not applicable to post, or you're saying, oh, well, I haven't posted this, but we've got to go track down that EOB. Or you've got an EOB that was received, but you have no deposit. So then you're trying to track that down. So it is a massive workflow that needs to be ingrained in every single one of your practices. And obviously making sure for action number three that your team is switching from, hey, I'm touching every claim to actually I'm resolving the claims. And that will show up in your AR over 90 days. If your AR over 90 days looks good, then you know that they're resolving those uh claims appropriately. You'll just really want to make sure that you, again, you have that accountability engine, that loop or that process to say, okay, hey, a claim was denial. Who's taking care of it? What do we need from the office? How do we track that and make sure that the office responds and that then the billing team does what they need to do? So, really, really critical that you have that loop really ingrained within your team. Again, whether they're in-house or outsourced, same thing needs to happen. So we all know that old AR doesn't happen by accident. It happens slowly one day at a time and just builds up and builds up. And I think it's important to understand these. And so if you are thinking about making a change with your billing team, um, you know, if you have some insight as to why your old AR got there, great. Most people don't because their old AR is there because their billing team's not being transparent, or they don't know how to manage it, or they don't have that level of strategic oversight. And so then you're in a situation where it's just built up and now what? So obviously, many uh billing contracts will require you to leave the old AR with the current billing team to allow them to finish it out. And my recommendation is in that situation, you are micromanaging them every week to have them complete reports so that you can understand are they making progress? And it just forces them to at least try and make progress and get, you know, the questions that they have back to you so that you guys can address them. And then if you do need a new team to take it over, it's really about setting a budget so that you're not blowing through additional money, working old AR that you're never gonna get receipts on. And so really important to set, you know, some sort of budget to say, hey, we're gonna set four hours a day. And please know that old AR takes a lot of time. So that may not be a ton of claims every single day, just depends how fast the insurance company answers the phone, how quickly, you know, those EOBs are found on payer portals. It is a very, very, very time-consuming situation. So if you are looking at your old AR and it is increasing and increasing, the sooner you make a change, the better, because it's not going to get easier to manage that. It's just gonna get harder. So, really, really important for you to take a look at these metrics. Obviously, if you've been enjoying this podcast, we'd love for you to share the podcast with a colleague or a friend, especially if you're hearing that they're struggling with this. Hopefully, this will help other physicians and other practices who may need some advice. All right, thanks so much. Have a great week.