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1 1, 2, 3 CollectionsProven Strategies for Collecting Long-Term Care Accounts ReceivableLaura McDonnell Collections 1, 2, 3: Proven strategies for ColleCting long-term Care aCCounts reCeivableAbout the author ..viIntroduction ..viiChapter one: Collections ..1 The importance of Collections .. 1 How to track accounts receivable .. 1 Getting it right the first time .. 7 Obtaining correct information on admission .. 8 Obtaining demographic information .. 10 Chapter two: Medicare A and B .. 13 Original billing: Checks for accuracy .. 13 Double check .. 24 Fiscal intermediaries .. 25 Online claims tracking .. 26 Work closely with clinical departments .. 27 MDS to UB-92 check .. 28 What next: After Medicare .. 30 Chapter three: Medicaid ..31 State specific, but some common factors .. 31 Eligibility .. 32 Coding and paperwork .. 33 Billing within time frame guidelines .. 34 ContentsContents Collections 1, 2, 3: Proven strategies for ColleCting long-term Care aCCounts reCeivableCorrect information.

2 35 Tracking Medicaid claims .. 36 Medicaid pending .. 39 Chapter four: Managed care ..41 Managed care .. 41 Admissions .. 41 Medicare managed care .. 42 Managed care contracts .. 44 Exclusions to the contract .. 45 The billing process .. 46 Follow up .. 47 Relationship with your managed care provider .. 48 Conclusion .. 49 Chapter five: Private pay ..51 Upfront understanding of payment expectations .. 51 Preparing monthly bills .. 52 Ancillary services .. 53 Room and board .. 54 Communication .. 54 Follow ups .. 55 Using legal assistance and liens to secure debt .. 57 Ombudsman .. 58 Small claims court .. 58 Developing a follow-up plan .. 59 Chapter six: Resource payments (resident contribution) ..61 Resource payments .. 61 ContentsColleCtions 1, 2, 3: Proven strategies for ColleCting long-term Care aCCounts reCeivableRepresentative payee options .. 62 Contacting Social Security or pension plan .. 63 Get the family involved.

3 64 Notification of income changes .. 65 One-time changes for allowable expenditures .. 66 Collections .. 67 Chapter seven: Coinsurance ..69 Coinsurance .. 69 Admissions: Determine level and amount of coverage .. 69 Family/resident understanding of coverage allowances .. 70 Medicare Parts A and B coinsurances .. 70 Automatic crossovers .. 71 How to bill coinsurance .. 72 Call: Don t just rebill .. 74 Medicare cost reporting: Third-party recoverable bad debt .. 74 Chapter eight: Reporting ..77 Accounts receivable spreadsheet .. 77 Analyze data often .. 78 Days outstanding .. 79 collection expectations .. 81 Cash planning .. 81 Conclusion .. 82 Appendix A: Representative Payee Information .. 83 Appendix B: Breakdown of the UB-92 ..111 Collections 1, 2, 3: Proven strategies for ColleCting long-term Care aCCounts reCeivableChapter one CollectionsThe importance of collectionsCollections are vital to the financial health of a skilled nursing home, and the billing and collection department can make or break a facility.

4 Estimates suggest that long-term care is an industry with a profit margin of four percent and with such a small opportunity for profit, facilities cannot afford to miss out on any owed reimburse-ment. Uncollected amounts can virtually eliminate any such potential, and if money is not collected as promptly as possible, facilities may have trouble paying bills or making payroll. The only way to guarantee financial stability is to have a successful Collections program in your to track accounts receivableAlthough many nursing homes have computer systems capable of tracking accounts receivable (AR), there is sometimes an information gap. These computer systems typically allow you to track charges, payments, and even adjustments (usually by date and payer), but they do not provide extensive details or explain what has been done Ch a p t e r o n e Collections 1, 2, 3: Proven strategies for ColleCting long-term Care aCCounts reCeivableand what needs to be done next.

5 And when tracking receivables, the more informa-tion you have on each account the better. Often, many accounts go unattended because they get lost in a large AR aging report ( , a report, generated from a billing software system, that details outstanding accounts receivable). Therefore, even with the best and most elaborate computer software, you should still establish an AR spreadsheet. This spreadsheet should be separated by payer and con-tain the resident s name, date of service, amount owed, and status (Figure ). At the end of each month, update the detailed outstanding balances on the AR spreadsheet. Once the list of outstanding balances is established, it is easy to update ar SpreadSheetResidentPayerDate of $ dueStatusserviceDoe, JaneSunshineHealthcareApr-043501 day billed to Sunshine 5/04- called spoke with Tim Roberts will pay 6/1/04 Smith, JohnUniversityHealth Plan Dec-032500 Billed 1/04- University requested records 2/04- records sent 2/04.

6 Called University 3/2/04 spoke with Mary Rogers - in med rec review lrmJones, BrianBay State HealthcareMar-041500 Paid at $300/day not $400-called bc for On rate authorization- case manager will call back 5/6/04 Johnson, MaryAll Care Health PlanFeb-047500 Called All Care on 4/3/04- claim not in system - resubmitted 4/4/04 Facility: Any Nursing Home Updated: 7/15/04 Co l l eC t i o nSColleCtions 1, 2, 3: Proven strategies for ColleCting long-term Care aCCounts reCeivableeach month by simply adding new charges and removing any paid claims. By maintain-ing such a spreadsheet, you keep all collection activity in one place and make it accessible to staff who work on the accounts. The AR spreadsheet should include all the Collections -related activity (such as follow-up calls and promises of payment) that has taken place on the account. Each phone call or follow-up effort should be listed in the status column of the spreadsheet. All information related to the account must be listed, so Collections efforts are not duplicated or complicated, especially when multiple staff members are working on the same account.

7 An account history can be invaluable to the Collections process. Therefore, keep all collection efforts and communications on the AR spreadsheet, no matter how old the information. Especially with private and managed care cases, it is essential to be able to identify who you spoke with and what was promised comprehensive documenta-tion will allow the collector to hold the person or insurance company liable for such past promises. Creating an AR spreadsheet: The 30-day plan When a facility first brings its accounts receivable into a spreadsheet system, the vol-ume is often so large that it appears overwhelming. Make the project manageable with a 30-day plan (Figure ), in which a supervisor assigns specific accounts to specific billers for collection . Each biller is assigned approximately 10 accounts with a plan of how to resolve them within 30 days. Each biller should focus intensely on Ch a p t e r o n e Collections 1, 2, 3: Proven strategies for ColleCting long-term Care aCCounts reCeivablethese accounts and aggressively follow up on delinquent each biller has only 10 accounts to handle, creating the AR spreadsheet becomes a manageable task.

8 In addition, this distribution usually ensures resolution of 30-day plan workSheetResidentDate of servicepayer$ dueAction to be takenStatusBrewer, JohnJul-04 Medicare5450 Need to call medicare and check status of medical reviewCalled Medicare, talked with sue jones: claim will beput into cycle to pay 10/15/04 Martin, CarolAug-04coinsurance3500 Need to check status with medexCalled Medex: no record of claim in system - claim resubmitted 9/26/04 Glover, StevenAug-04 Medicaid2750 Claim denied: no case mix on file- callcase mix and see if it is now on file- if not, get copy and fax to case mix check- and rebillCalled case mix 4/20: not on file, asked for copy from nursing; faxed copy to case mix 9/21; called on 9/24 case mix now on file- rebilled claim 9/25at least 80% of the accounts, because each biller will become quite familiar with those assigned to him or her. This method, therefore, will cause the number of outstanding accounts to dwindle over time.

9 Once the AR spreadsheet is under contract, the 30-day plan should no longer be necessary the billers will have learned what their responsibilities should be. The 30-Facility: Any Nursing Home Updated: 10/01/04day plan will have also introduced to the billers ownership and accountability for their accounts. They will have the tools and direction they need to resolve outstanding claims, and they will better understand how successful Collections programs can : Assignment of responsibilitiesAfter the AR spreadsheets have been established, assign each financial class or payer type (Medicare, Medicaid, private pay, etc.) to a biller. One biller can usually handle more than one class, depending on the size of the AR. Such assignments establish biller ownership of the accounts, and once each biller becomes responsible for spe-cific accounts and financial classes in this way, your facility s Collections processes will improve. Billers will become intimately familiar with those for which they are respon-sible, and they will learn how to address quickly any problems and answer questions.

10 Follow-up timelinesFor each account, establish regular status reports that address any updates and activity as well as protocols for allotted time between follow-up attempts. Figure details timeframes to establish for the different payer follow upAs mentioned earlier, each time a staff member works on an account, list and date Co l l eC t i o nSColleCtions 1, 2, 3: Proven strategies for ColleCting long-term Care aCCounts reCeivableCh a p t e r o n e Collections 1, 2, 3: Proven strategies for ColleCting long-term Care aCCounts reCeivablethe action taken in the status column of the AR spreadsheet. Dating each action allows the supervisor reviewing Collections to determine whether sufficient attempts to collect the account have been made. It also stands as documentation in the event that legal action is needed or as backup in the event that the account must be written off. Having dated status reports will also simplify follow up, since the biller will be able to ascertain whether the promised action has been completed within the anticipated amount of time.