Cash Flow’s Role in Success

By Teresa Duncan, MS, FADIA, FAADOM

I recently evaluated two practices to identify weaknesses in their revenue cycle. Both offices had decreased cash flow – which prompted the call – and the doctors were told by their team members that the “economy was impacting payments” and that “patients just don’t have money right now.” While both statements may have played a factor in practice revenue they didn’t fully explain the bigger issue: decreased cash flow.
What was happening? Insurance claims were not being filed in a timely manner. Information requests from the insurance company were not being answered. Inaccurate patient data was causing claims to come back rejected. In both cases the administrative team member stated that they were doing the best they could. Unfortunately their performance was keeping claims from being paid, which greatly impacted the practices’ bottom lines.
How do you keep this from happening in your practice? Let’s evaluate three basic necessities for proper insurance revenue management: time, tools and tracking.

Time
The days of one person handling the insurance system in a group practice are over. In a group setting there is a need for dedicated phone lines and team members who understand dental insurance. Throwing a new person into the mix without training will cost you in the long run. Your insurance team may be juggling too much as it is. Instead of splitting up the patients, the duties should be split up. Eligibility checks should be one responsibility, and benefit gathering another. Follow up on claims is a separate position. These areas will surely overlap but separation of the duties will become necessary to ensure accountability.

In a single doctor office insurance management can easily take up 1-2 hours per day. Why so much time? Verification of benefits and eligibility, gathering supporting claim data (such as radiographs and periodontal charting), and insurance payment entries can easily fill this time period. A solo doctor with 1-2 hygienists on staff can generate enough claims to maintain a part-time person. Imagine the resources that a 20 provider system needs.

Tools
Have you provided the tools for this position to be as effective as possible? Claims and supporting documentation should be sent electronically. The learning curve for these programs is relatively small and the payoff is huge. Claim turnaround time is greatly reduced and the team member knows immediately if a claim is rejected because of lack of correct data or missing information. Offices still submitting paper claims are delaying payment by three weeks or more.
Make the switch to electronic claims and attachments and make sure that your team member receives training. The movement of these software systems toward enterprise management is positive for groups. A manager can now check claim payment and denial rates for several different locations. This helps to identify weaknesses in training and revenue.

Tracking
It’s imperative for managers to keep up receivables in your practice – both insurance and patient receipts. Ask your team to run and present an accounts aging report on a biweekly basis and for evaluation. You’ll want to make sure that delinquent accounts are being actively ‘worked’ to obtain payment. The insurance aging report should be run weekly to identify which claims are overdue.

Glitches in clearinghouse submission or employee data entry errors can be quickly identified by reviewing the claims submissions report as well. This is probably the most overlooked report in the office as it usually comes from the clearinghouse, not the practice management software. It will tell you if attachments are required or if claims are sent back for denial. Finding out this information sooner rather than waiting on the paper explanation of benefits will save your cash flow.

Good managers are often vigilant with practice metrics. Track your insurance and receivables balances to avoid reduced cash flow surprises in order to reinvest in yourself and your practice.

About the author: Teresa Duncan is President of Odyssey Management, Inc. and Dentistry’s Revenue Coach. She is an international speaker that focuses on recapturing and maximizing income opportunities for dental offices. Insurance and accounts receivable systems are her specialty. Her company offers a Billing and Coding ESupport line to answer any questions your office has on those topics. Visit her website for more information and to send her any questions or comments. www.OdysseyMgmt.com

Speak Your Mind

*