Is your facility accounting for all the cash it receives? In many instances, your Remit (Payment Posting) department could be receiving lockbox deposits or live checks that they are unable to post into the patient accounting system. All too often, third party payers adjudicate claims to the incorrect "pay to" provider in an undiscovered error, resulting in those payments coming over in an EDI 835 file, or lock box image. Do you have a process and procedures in place outlining what should be done with these payments? 

One area in which we frequently find issues is the types of payments referred to as "I don't know checks," "phase account entries," or "unpostable payment".  We discover also that these checks are posted into the patient accounting system either under a “dummy” patient account #, a miscellaneous financial bucket, or a holding fund.  There is always the intent to go back and research who the money actually belongs too “when things aren’t so hectic.”

Be cautious when you hear that response from your posting management team because things rarely slow down in that environment. In addition, researching these types of payments is very time intensive and is weighed against the larger and more immediate priority of posting current receipts. In addition, credit balances build up within the holding account, often leading to a reporting misstatement in accounts receivable. This is not looked on favorably by your third party payers or institutional auditors. 

Our recommendation is to find the root cause of these issues rather than continually “fixing” them (or not). Very often you will uncover systematic reasons for the problems either in your processes, billing system or with your third party payor. Taking the time to do a deep dive once and for all will help you optimize your revenue cycle and improve your bottom line.

Sou Chon Young is a senior consultant at Hayes Management Consulting, specializing in revenue cycle optimization.