Excalibur Logo
Request a Consultation
Log into Client Portal
Excalibur Logo
Request a Consultation Log into Client Portal

Champing at the Bit to Reach the Winner’s Circle? Use These Methods to Rein In Payers and Speed Up Cash

The annual Kentucky Derby approaches and with it a focus on agility, strategy and paramount; speed.

For Revenue Cycle Leaders, the Kentucky Derby isn’t yearly. It’s monthly, and the mission is always the same. And always two-fold:

 “Maximize Cash and Move it From the Payer’s Bank to Our Bank As Fast as You Can!”

This article focuses on the latter, namely, how to rapidly increase the speed at which Cash can accelerated within a complex, voluminous and unforgiving Accounts Receivable.

Managing Cash and Managing the Receivable are Different

The objective of the Revenue Cycle Operations Team is the rapid, accurate and compliant conversion of Gross Revenue into Cash at a sustainable speed equal to or greater than an established prior period of Net Revenue. But, whereas Cash management involves maximizing reimbursement, contract compliance, Denial prevention and “not leaving any dollars on the table’, the management of the Receivable has more to do with the art of resolving more balances in the right hand than new volumes pouring into the left. If the Resolution : Gross Revenue Ratio is greater than 100.1%, and sound cash collection methods are enculturated, then Cash acceleration is typically the result.

Receivable management is about speed and the by-product of resolving accounts more rapidly is the acceleration of Cash that accompanies a more strategic approach to resolving a higher volume of accounts, faster.

These four strategies will guide our Revenue Cycle Jocks in beating their peers, and more importantly, the Payers, to the finish line.

 Strategy 1 – Understanding the Lag – Working Accounts Due for Follow Up “Today”

Hiding within the Receivable (regardless of the size or type of facility or system, the variables within any Accounts Receivable in the industry are voluminous and overwhelming) is a pocket of fresh A/R that should receive prioritized follow-up efforts.

How is this golden pocket found?

Cash is collected ‘today’ on volumes that were generated “prior to today’. For this reason, the principle of understanding Lagging Gross/Net Revenue is the first fundamental of revenue cycle management. Rather than organizing the A/R by Age or overly obsessing over Balance, the AR should be viewed as a funnel of new accounts that have an Expected Resolution Date that is Payer Specific.

For example; Medicare has no lag. Medicare balances ‘born last month should process this month’ whereas Work Comp accounts ‘born last month won’t process for three months.’

Having command of this principle allows for the creation of a Lagging Revenue, which is more important than both current month Gross Revenue and Aged A/R, and represents the exact accounts that should be attacked ‘right now’. In fact, the Aged or distressed portions of the Receivable only exist due to a failure to allow too much leakage, payer stalls and lack of attention of liquidating the accounts actually due for a touch ‘this month.’

Implementation Tips : For organizations that lack a robust analytics platform, develop a Lagging Revenue table at the summary level such as :

From here, simply sum the Total Charges on Accounts that fall within the Lag Period. These are the accounts to go after ‘in this Period’.

For organizations with an analytics platform, assign an ‘Expected Claim Resolution Date’ at the account level that is Payer specific. Simply sum the Total Charges on these claims and isolate them as the precise pocket of A/R to tackle “this month” or “right now”

Strategy 2 – Use Bots, But Not Robotically

The most important touch in AR Management is the first follow up effort. If performed too soon, not only is it a waste of between $2 and $3.25 (depending upon region and staffing costs), it allows the Payer to provide the non-results oriented “In Process, Too Soon to Obtain Status” defense, and then programmatically put the Provider’s claims at the bottom of the adjudication queue.

Because the Lagging Revenue or “Expected Resolution Date” is known, at the Payer level, it makes no sense to work an account too soon, or let it age. Rather, use Bot technology and a simple matrix to remove a human first-touch and let the Bot disposition the account, setting the plate for staff to use their energy and skill set where it is needed.

Important Tip : Do not configure Bot technology to repetitiously ping Payer portals. This results in cost with no benefit, raises flags within the Payer’s adjudication algo rhythms, and may accidentally over-ride or supplant the Status or Disposition already applied on the account by a Patient Account Representative. The value of a Bot is to replace a human touch, reallocating the human to more meaningful work. If it’s not logical for a human to ping Blue Cross 8 days in a row for a status, then it’s not logical for the Bot either.

Strategy 3 – Disposition is Faster Than ‘Age’

The Disposition is the ‘mood’ or story of the A/R. Some small percentage of the golden pocket of accounts due for a touch ‘this month, right now’ will suffer Denials, under-payments and stalls.

When focusing on speed and although Dispositional Receivable Management allows for a segmented approach to managing the entire A/R efficiently, “let those go”.. for now. Instead, now broaden the scope and use the Dispositional Method to find other, older accounts that have a higher potential for conversion.

Remember, an account that is 104 days old in a Promise to Pay Disposition is more valuable than an account that is 11 days old with an Open Complex Denial.

Winning the monthly derby often requires knowing what to let go, and what to go after.

Implementation Tip: If your organization doesn’t manage the A/R by Disposition with rigor and discipline, then you have limited insight into how the Receivable is behaving. Start with a library of status codes (i.e. Pended – Med Records Request, Denied – Timely Filing) and roll the statuses up to management level Dispositions such as “Pended, Denied, Promise to Pay”. Try to keep the list of statuses between 70 and 100 to not overwhelm the team, and make sure that the statuses are statuses, not “actions” as the purpose is to know where an Account sits in the cycle, not whether or not a fax was sent etc.

Strategy 4 – Ginormous Balances, Managing the A/R Within the A/R

Lastly, Revenue Cycle Leaders are seeing an overall change to the optics of the Receivable, Key Performance Indicators that don’t quite make business sense and anomalies that render month end a painful six (or even ten) day analytical nightmare.

When unlayered, the root problem is that there are no longer just “high dollar” accounts that are headaches for the team, but “massive, ginormous balances” that can easily exceed $1M per claim!  These “ginormous balances” are really a separate A/R hiding within the regular A/R. If removed from the Receivable and recasting is performed, the “regular A/R” is performing at 40 Days in Revenue Outstanding, but these claims are taking 120 (or more) days to resolve.

For speed of resolution, remove these from the Patient Account Representative’s ‘regular’ workflow altogether and consider a proactive approach (sending records with the claim, engaging an attorney upfront, talking to the Payer while the patient is in-house and even involving the CFO at the beginning of the cycle). Compressing the Adjudication Cycle for ‘ginormous balances’ is an entirely separate art and strategy than the normal race for cash, and the organization should align accordingly.

By calibrating the prior period volumes, at a Payer level, due for intervention ‘today’, by using Bots to set the plate by touching them at the right time, and with the right frequency, by understanding the liquidity of the A/R through the discipline of Dispositional Receivables Management, and my removing ginormous balances from the regular flow, your organization will rein in misbehaving payers, and win the Kentucky Cash Derby, every month.