Follow-up on accounts was previously completed by a manual review of printed reports. We were reviewing thousands of accounts to find those that truly needed follow-up, using e-mail reminders and our own information system. It never really netted a true daily working list.
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All of this caused accounts to receive tardy follow-up, or no follow-up at all, resulting in thousands of accounts being written off. Also, we simply had no information available regarding the process execution effectiveness of the various processes in obtaining payment for services.
Our assessment was that we needed to leverage technology to implement a process that would efficiently alert the staff to accounts that needed follow-up to ensure that we did not miss payer timelines or the appropriateness of reclassifying payments as due from patient.
We hoped we could find a solution that would not be disruptive to our existing very high-performance level. We had no true metric or process to account for the number of accounts or the dollar value adjusted off over the years because of timeliness or information not provided. Worse yet, we knew accounts might have been classified as due from patient when they should have been paid by insurance. Our conservative estimate of accounts adjusted off, or inappropriately now due from patient was well in excess of $500,000 a year.
Further, we determined that our lack of information regarding our revenue-cycle process execution resulted in continually making the same mistakes. Our existing technology simply could not inform us of where our processes were breaking down.
Several vendors offered to review our accounts receivable. Many offered to do the follow-up for us for some of the small-dollar accounts, high-dollar accounts or all of it. Some vendors offered software or consulting to reorganize. The average review showed that we were not properly following up on $2.6 million of primary insurance accounts and more than $1 million of amounts due from secondary insurance.
When we combined this with our previous conservative estimate of our losses, we knew we had a gross financial opportunity of more than $3.6 million, with the net opportunity of about $2.3 million.
In September 2009, we entered into an agreement with a company; through its program, the organization had the ability to take our data, customize the protocols in their software to mirror our specific account follow-up protocols and identify accounts that received proper follow-up and those that did not. Our ability to now immediately know when accounts have “fallen through the cracks” has essentially eliminated this source of lost revenue.