MANAGING OPEN INVOICES
Problem : When you get behind in your billing and collections, the biggest question can quickly change from “how do we bill and collect?” to “what billing and collecting should we work on next?” or “how many staff will we need to get back on track?” This is especially hard if you don’t know the volume of invoices that make up key segments of your accounts receivable. Questions that most companies do not have the answer to include:
- How many invoices make up my open AR?
- How many patients make up my total invoice count?
- How many invoices are newer (0-90 days) and how many are older?
- What are the total dollars in each aging bucket?
- How do I assign the work load?
Cause: Reimbursement software is usually designed to provide the dollar volume of your revenue and A/R rather than the volume in terms of numbers of invoices. The number of invoices more closely equates to workload and staffing requirements. You need to not only know numbers of invoices but also categorize these by metrics used to manage your billing and collections department such as payer, payer type, billing clerk, collector, age of the invoice, therapy, etc.
Impact: Accurate staffing and getting your invoices worked is the biggest impact. How many people do you need to work the invoices? How are you assigning your work load? Older claims require more time to collect on, where newer claims do not. It is difficult to say that a collector can work a certain amount of claims when older claims require much more work time than newer ones. A secondary impact is a frustrated reimbursement staff that feels like they are fighting a losing battle and nobody “knows the score” or “what it will take to win”.
Solution: Evaluate your A/R based on both dollar and invoice count volumes to assign and create realistic expectations of your staff in generating revenue and collecting receivables. You must be able to report # of accounts, invoices generated (primary and secondary), collection calls and A/R transactions (cash and adjustments) by employee by time period in order to set the right expectation and measure results. This can be done through using your existing software, transferring data to a data analysis tool such as Microsoft Excel or using a reporting product like Home Infusion Reports (www.HomeInfusionReports.com). Remember, if you can’t measure it, you can’t manage it.
Benefit: Outstanding AR is worked by collectors who can work a certain number of claims every 30 – 45 days. By understanding the number of patients, invoices and associated dollars, you are better equipped to look at staffing needs and the ability to work claims in a timely manner. With the right reporting, staffing and priorities in place, your billing and collections staff won’t feel like they are fighting a losing battle without any clear metrics to gauge their progress.