Accounts receivable, unpaid claims, outstanding invoices – no matter what the label, it is money left on the table and generally, is the task that gets pushed to the bottom of the to-do list.

There are volumes of reasons why a claim is not paid with the first submission.  At multiple points in the billing process, there are opportunities for failure.  Many practice management systems afford an opportunity to set specific parameters to validate claims for content prior to submission.  These options can be as simplistic as the insured ID format or as complex as whether or not the provider and/or service qualify as a billable encounter.  Knowing the billing rules for the payers you are billing are critical in configuring the system to stop the claims, affording an opportunity to right the wrong in an attempt to submit a clean claim the first time.

Once a claim is generated and submitted to the clearinghouse, there are additional edits in place.  Some are similar to those configured in the practice management system.  More complex edits are in place to validate the structure of the file as well as content.  Claims that fail at this point are not submitted to the payer for processing.  Rejections at this level must be addressed promptly and corrective action taken.  Depending on the vendor and the reason for failure, changes can be made to the claim to allow pass-through to the payer.  However, any changes made to the claim must also be made in the billing system, even if a new claim is not required.

Payers, too, have additional levels of edit in their systems upon receipt from the clearinghouse.  As has been the case from the first step, claims rejected at this level have not been passed onto adjudication.  They will not appear on an EOB as a denied claim.  Corrective action is required and typically, this means going back to the source, making needed changes and initiating the process all over again.  Resolving claim failures at these various levels is the first step in effectively managing accounts receivable.

Accounts receivable is not managed on a claim by claim basis.  It is unlikely that claims will deny for random reasons to the point that the AR continues to grow from month to month.  Evaluate the receivables to identify trends and/or possible big picture issues.  Ensure that staff know what the payment cycles are, electronic claim submission dates associated with the payment cycles and filing limits. These details assist in developing a work plan to address outstanding AR.  When reviewing reports, there are several questions to consider before even picking up the phone or logging into a website to check the status of a claim.

• What trends can be identified?
• Are billing dates consistent? Did a submission fail somewhere along the way?
• Is it a specific location or provider associated?

Answers to these questions will determine next steps.  Identify the source of the problem to make the necessary changes.  Doing so prevents claim rejections/denials going forward and provides an opportunity to capture and resubmit all affected claims at once.

More importantly, close the loop by sharing results of your work.  The reason for claim denials is not always linked to system configuration.  It might also be the result of workflow and/or process.  The revenue cycle is just that, a process where each step is dependent on the one prior, none being any more or less important than the next.  Constant communication, training, and starting with the big picture and drilling down will make the process of working unpaid claims less overwhelming and, hopefully, more effective.