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Home health providers often make mistakes that leave money on the table at best, and at worst, lead to financial ruin.
However, providers that learn to avoid these stumbling blocks will be better positioned to achieve longevity and financial stability.
In general, the home health consulting firm SimiTree has noticed an increase in the amount of providers that have been struggling with things like unbilled claims, inaccurate primary payer selection and more, according to Lynn Labarta, vice president of post-acute revenue cycle management at SimiTree.
In fact, Labarta recently wrote about this very topic for SimiTree.
“SimiTree has thousands of customers in the home health and hospice space all over the country, and we have been seeing an uptick in these issues and agencies struggling or feeling that they may not survive,” she told Home Health Care News.
Labarta believes that not staying on top of unbilled claims is the No. 1 issue that providers are currently struggling with. It’s an issue that pops up at companies of all sizes.
“We see this unbilled claims issue with all sorts of agencies — all the way from startups to mid-size agencies, even some of the largest agencies in the country struggle with this for different reasons,” she said.
Broadly, most providers’ EMR has a section in the software where all of the unbilled claims are housed. These are claims that can’t be billed because there is some type of hold on them. Typically it’s a clinical hold, or regulatory issue that prevents the claim from being billed.
For many providers, this is where most of the revenue lives.
“We’ve seen agencies that have thousands of claims sitting in the unbilled claims list,” Labarta said. “When you translate the thousands of claims sitting in that bucket, depending on the size of the agency, you’re talking about hundreds of thousands of dollars. Of course, if you’re dealing with a smaller agency it could be smaller dollars, but it still impacts cash flow. This makes agencies feel like they’re seeing patients and working very hard, but not seeing the money coming through the door.”
Avoiding pitfalls
At American Advantage Home Care, there is a system in place to prevent unbilled claims from pilling up. The company’s staff usually checks its EMR in order to determine what’s ready for billing, what needs to be sent out, and what hasn’t been sent out.
The company also has reminders in place to emphasize the importance of submitting notes within a 24- to 48-hour window, when possible. Additionally, it utilizes case management planning sessions to spread this message.
“Reminders, as to say, ‘The following claims are scheduled to be billed on Thursday and today is Tuesday,’” Cleamon Moorer Jr., president and CEO of American Advantage Home Care, told HHCN. “‘Let’s ensure that we have all our notes submitted by Wednesday, so that they are QA’ed and ready to go out.’ We are really being intentional about it, as opposed to letting them add up.”
Based in Dearborn, Michigan, American Advantage Home Care provides skilled nursing, rehab and specialty care services. Currently, the company serves seven counties in the Southeast Michigan area and has a census of 200 patients.
Along those lines, Labarta recommends company leaders and managers look at unbilled claims at least once – if not twice – per day.
Another mistake that is common among providers is inaccurate primary payer selection.
At home health companies, there’s usually someone on staff who is responsible for collecting information, such as the patient’s name, date of birth, insurance policy number, and more, in order to create an admission in the EMR. Sometimes the person tasked with this responsibility will accidentally select the wrong primary insurance.
“It could be because of a typo, or maybe they were just running through the process really quickly, or they were unclear about the eligibility and what insurance company this patient really had,” Labarta said. “In other words, they may select Medicare for a patient that has a Medicare Advantage plan with BlueCross and BlueShield, for example. We see this constantly.”
This leads to the claim being billed to the wrong payer and eventually rejected or denied. Once this happens, it may take the provider time to figure out why the claim was rejected. This can lead to providers missing payer filing deadlines.
“These obstacles create a situation where the agency may not be able to get paid for that claim,” Labarta said.
Moorer urged clinicians to take the time to get an image of the patient’s insurance card on to the EMR at the start of care. It’s also vital to ask follow-up questions during the intake process, he said.
“Asking them, ‘Are you changing your plan? Do you plan on changing your insurance payer over the next several months’ is very important,” Moorer said.
Another mistake that providers make that could lead to financial repercussions is not understanding payer reimbursement processing times.
“We see agencies that will bill a claim and then they are desperate for that payment, especially when it comes to the commercial or Medicare Advantage,” Labarta said. “Agencies need to understand that Medicare typically pays within 14 to 30 days for final claims. UnitedHealthcare, Blue Cross, and some of the other insurance companies have different time frames. It could be 30 days, it could be 60 days.”
Providers that keep track of these various time frames will be better able to manage the company’s cash flow.
“Being able to track the expenses on the front end — looking at payroll, looking at overhead, looking at medical supplies — is very important,” Moorer said. “Looking at that mix of how many payers pay timely, and then how do you match that with intake goals, as well as cash on hand reserves, lines of credit. All of that is very important.”
In addition to errors that can impact cash flow, Moorer believes that providers should always be considering spending priorities.
“I think taking a very close look at cost containment is a much needed practice for agencies of all sizes,” he said.
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