Know who your patients are and where they are coming from.
by Joe Pomis, Home Infusion Consultant
“Why is my Accounts Receivable so old?”
Most owners and general managers (GM) look to the reimbursement staff far an answer to this question. There can be many answers, but two in particular should cause the GM to look upstream in the process.
If the answer is “We have a high percentage of Medicaid patients and our state not only barely covers our materials cost, they are notoriously slow payers who require multiple submissions” the GM needs to assess who these patients were referred by.
The first thing the GM needs to do is find out who the referral sources are. If this is a pattern of a particular physician or two, then the GM can narrow the analysis down to those two referral sources. The following questions can be answered through reporting:
Is the referral source giving us commercial patients?
Are the commercial patients nutrition and antibiotics or are they low margin injectables? Do they give us a lot of Medicare Part D?
If there is a pattern of poor quality referrals, how long has it been going on? Are we still taking these types of patients today?
If the pattern of poor referrals is continuing today after a year of effort, the GM can be sure that the Accounts Receivable woes will continue. Perhaps a sales person has been trying for a year to get better referrals out of a particular referral source. The cost of taking poor paying referrals is as much a cost of sales and marketing as the sales person’s salary, bonus plan and car allowance. When the GM sees how much it is costing in bad business to try to get better business from a referral source, she might be better off hiring a second sales person and looking elsewhere for business rather than taking the same poor referrals over and over again!
Another answer the GM could get in response to the question “Why is my accounts receivable so old?” is: “We have been denied by Medicare because the patient does not meet guidelines and there is no true secondary insurance.” Ouch.
The GM needs to go through the same process of analyzing referrals by using existing reports. Who provided these patients? Why did we take them on service? Perhaps the intake people need better training on what Medicare covers. Perhaps the sales person wants the patient put on service so as not to upset a referral source.
In either of these examples, the GM should immediately stop the bleeding by requiring that she be notified when there are any Medicaid referrals from specific doctors, or if there are questionable Medicare referrals. After a month or two of screening these patients and explaining to staff with these real, live examples just why the company should not be taking these patients, the GM can turn the process back over to the intake and sales people, who hopefully will have benefited from the guidance.
Use your reports to “confuse yourself with the facts.” Do not rely solely on anecdotal information from your staff!