When I am asked this question, the first thing I generally do is ask my own question: “What is your payer mix?” I’m no longer surprised when the person answers, “I don’t know.” Ambulance services, after all, are in business to transport patients safely and efficiently to the services they need to resolve a medical condition. So much time, energy and focus are put into this that a manager or director often has to push financial aspects to the side. The bottom line, however, is that without effective revenue management, your agency will not be able to operate.
Here are five steps to help you build an effective revenue management strategy.
Know your payer mix To build a collections strategy, start by reviewing your payer mix so you have an understanding of where the revenue is “sitting.” If you don’t know who you’re playing against, it’s hard to develop a game plan.
For many services, Medicare makes up 40 to 50 percent of the billed revenue. These services, when billed electronically, should pay (or deny) 14 days after submission. An analysis of the Medicare accounts will show if payments and denials are being received in a timely manner. If they are not, a stringent review of the billing process should be done. Analysis for medical necessity, required documentation such as signature forms and physician’s certification statements, and appropriate coding are essential elements for Medicare payment.
Medicare pays on a fee schedule that is published on the Centers for Medicare & Medicaid Services website (cms.gov). A service that has analyzed its payer mix and determined when Medicare claims are being sent can easily forecast the amount of monthly revenue it should be expecting from Medicare.
Find out the how and when It is equally important to know how and when bills are going out. Does your service bill daily? Weekly? Monthly? Are bills going electronically or on paper? The sooner the bill goes to the payer, the sooner you can expect payment. I recommend daily billings to all payers.
Don’t let claims stay static Timely follow-up is a key factor in successful collection of accounts. Many payers now have online access to allow providers to review claim status. Other methods include automated voice response systems, allowing you to obtain claim status over the phone. A call to customer service also can help push a claim through. If you’re not following up on a static claim, chances are no one else is, either.
Get tough … Co-insurances, deductibles, balances after insurance and uninsured patient balances can be the hardest to collect. This category typically makes up 10 to 15 percent of the payer mix for many services. The balances associated with these categories drive up days sales outstanding (DSO) and consume a precious amount of patient account representative time.
Consider using an automated system that generates a series of statements customized to your specific needs. Statements with progressively more intense language can be very effective when sent with greater frequency. In the past, many services billed patients on a 30-, 60- and 90-day basis before even starting to think about collections proceedings. In today’s economy, getting your bill to the patient first and with more frequency can mean the difference between getting paid and not.
I recommend getting the first statement out to the patient as quickly as possible and then sending subsequent statements at 15- and 21-day intervals. By doing so, you have alerted the patient to his or her financial obligation three times within 35 to 40 days of providing service. The last statement in the series should alert the patient that if he or she does not contact your billing office within 10 business days, you will proceed with further collection efforts. I suggest a final phone call to the patient in a last attempt to help him or her resolve the account balance without it going to collections.
Some services do not employ the services of a collection agency. While I highly recommend doing so, it is not necessary if you have the resources to pursue these balances in small claims court. This can be a very effective way to get clients to respond and to collect on those outstanding debts that are driving your DSO up and your profit margin down. While this may seem harsh, if a service is not pursuing those patients who will not pay, it is providing a disservice to those who do, because cost of service will have to increase to make up the difference.
… but don’t forget customer service Helping patients enroll in government assistance programs is a good way to provide customer service while potentially increasing your collectable revenue. Applications are available on most states’ Health and Human Services website; print and mail an application to a patient. Even better, offer to fill it out over the phone and then mail it to them for review, signature and mailing. This can mean the difference in getting paid something or nothing at all.
Anthony Minge is the director of patient account services at MedServ, an affiliated company of Fitch & Associates in Platte City, Mo. He can be reached at
aminge@medserv.us.