All medical practices have issues with managing patient accounts receivables (AR) and cash reconciliation. It’s not endemic to just one specialty. And while some practices are better at revenue cycle management than others, all run into problems eventually.
Earlier this month, we talked about creating a better reconciliation process. In this post, we’ll give you a five-step process to improve cash reconciliation with your AR, which can better track the comings and goings of patient payments and ensure everything adds up at the end of the day.
Step 1: Cross-Check and Verify
By the end of each day, you should have a total of all transactions made that day. This includes all cash payments, all insurer payments, and anything that was filed that day on behalf of a patient. Then, calculate the total billing that was done for each patient that day. These two numbers, at the end of the day, should match.
If this sounds tedious, that’s because it can be — if you do it by hand. There is software out there that can do it for you, but you still have to cross-check the totals and verify that everything adds up.
Step 2: Calculate Daily Billing
Daily billing includes the total of all cash, checks, and credit card payments made by patients for their visit – including deductibles, co-pays, and fees. This number should be added to the actual payments that the practice received that day.
This grand daily billing total should equal the previous calculations we talked about in step one. If there are discrepancies, it’s necessary to go back to step one and re-evaluate all payments for that day. Again, software can automate this process to a degree.
Step 3: Reconcile Rejected Claims
Not accounting for rejected claims can throw your reconciliation process out of order. You need to know when claims are rejected and for what reason. Don’t factor in anything that was rejected. If you do, you’ll have imbalances and an inaccurate figure. (Plus, from a practical standpoint, you’re less likely to go back and resubmit the rejected claims, which deprives your practice of revenue).
Step 4: Only Post Clear Payments
Payers will usually send you a confirmation per batch of paid claims before the money for those claims is deposited into the practice’s account. However, before you can record this as payments received, the payments must clear the bank. Don’t assume the money will go through just because you received a confirmation. There are plenty of reasons for a problem or a delay.
Step 5: Track All Reimbursements
Tracking reimbursements can be difficult, but it’s essential. When you have a patient encounter, that patient encounter will generate a certain number of reimbursement elements. These reimbursement elements could involve write-offs, or could be required to be resubmitted to the clearinghouse in the form of secondary/tertiary claims.
Tracking reimbursements includes several key tasks, such as making changes to any previously determined co-pays and deductibles, making manual adjustments to send patients correct bills (especially if co-pays or deductibles changed), adjusting for write-offs, and preparing secondary/tertiary claims.
Hiring a Revenue Cycle Management Provider
This may sound very complicated, and to a large extent, it is. That’s why hiring a third-party revenue cycle management provider is a good idea. Doing so frees up valuable time and resources that can best be used elsewhere, such as delivering better care for patients. And, a practice doesn’t have to spend time and money finding and training personnel who have the skills necessary to handle something as complex as cash reconciliation.
If you can reconcile your cash payments with AR in a fluid, effective manner, you’ll maintain a steady stream of revenue without losing out on payments that should have been made. A third-party provider can help make this a reality for your practice.