It is not uncommon for a healthcare center to make account adjustments. This is part of the day-to-day account management and overall revenue cycle management process. It is the unexpected or incorrect account adjustments that can greatly restrict a practice’s cashflow and trigger other financial issues.
The Complexity of Medical Billing:
There is a level of complexity in successfully managing the revenue cycle of a medical office or healthcare center. Medical practices, community behavioral health centers and even larger health systems all have different needs and requirements.
Yet, all of these entities require transparent and efficient revenue cycle management. Predictable and optimized are the terms that clinicians would like to associate with their revenue collection process. But a smooth and efficient billing process takes knowledge, experience and persistence.
For example, fully understanding each insurance payer’s enrollment system can create challenges. If payer enrollment is not properly setup, healthcare clinicians will not receive payment for their services. Even after they are enrolled and fully credentialed with an insurance payer, reimbursement issues can still occur. These reimbursement issues can require account adjustments that, if not sufficiently dealt with, can even create lost revenue in the form of write-offs.
Tracking Denials and Account Adjustments:
As a general policy, back offices need to have a clear and consistent approach for denial management. The goal is to have no denied or rejected claims, but denials will occur. However, if healthcare providers do not have an organized policy to remedy these claims, these claims will slip through the cracks. Denied and forgotten claims can create a form of revenue leakage. When this occurs, back offices will slowly lose revenue but not know what is exactly generating this lost revenue.
Office manager should audit their practice’s account adjustment activity. Having internal checks and controls on this activity will minimize a medical centers level of risk. The activity of patient refunds, takebacks, payment posting and other account adjustments all carry a higher risk of fraud. This yet another reason to have internal procedures to control and monitor these operations.
Account adjustments and write offs are activities that needs careful monitoring. Incorrect account adjustments will create a number of issues for healthcare provider’s bookkeeping systems. Here a few of the potential problems:
- Write offs are assigned to the wrong account or have an incorrect adjustment code, inaccuracies will occur in the monthly reports. Account balances will also be incorrect and there is an increased potential for a loss of revenue.
- There is an increased risk of fraud if the same office staff who is posting payments also has the authority to generate write offs or refunds. The misappropriation of payments is a concern in this instance.
- If all account adjustments are not properly reviewed by the head supervisor, there is an elevated risk of mistakes and/or fraud. Even in cases where there is no malicious intent, there is an elevated chance that the write offs are not properly posted to the correct account.
Account Adjustments Due to Bottlenecks:
Office managers who oversee the billing process need to watch for bottlenecks in their medical billing process. If certain claims are always ending in the outstanding or unpaid category, something is likely causing this problem. Is the back office consistently using the wrong modifier, which triggers a rejection? Maybe an outdated CPT code is entered for a certain procedure, which always creates a rejection from insurance providers? In fact, there are a multitude of ways in which bottlenecks can occur.
Bottlenecks and similar occurrences are preventable. Medical back offices need to carefully monitor all accounts and track claims that are 30, 60, 90 and 120 days outstanding. The goal is always to process reimbursements as quickly as possible. However, insurance payers will want to follow established policy procedures. If a claim submission is over 60 days outstanding, it needs some additional work and investigation.
Medical providers do not want to see their submitted claims become forgotten and written off. They have spent too much time, energy and resources in striving to deliver great patient care. There are already a considerable amount of challenges that medical providers have to face every day in their workplace environment. Not being reimbursed for their hard work and dedication to patients is the last thing healthcare professionals want to see happen.
With an experienced staff who understands the billing and credentialing component of reimbursements, many of the previously mentioned problems are avoidable. However, the first step for back offices is figuring out if they have a problem with their medical billing process. Problems such as denials and unauthorized account adjustments are difficult to fix, especially if they are unknown. An emphasis on sound accounting practices and transparency are always a step in the right direction.
About the Author:
Advanced Billing & Consulting Services (ABCS) provides revenue cycle management services for health professionals. These services include insurance credentialing, online marketing and workforce management tools for agencies that provide services to the I-DD community.
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