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I have trouble with the accrual accounting in medicine given the lengthy billing cycles. The cash accounting is reality and the accrual accounting is based upon expectations. My business is in Lewes, Delaware. There is a yearly cycle with snowbirds leaving for Florida from Thanksgiving to Easter, and tourists using emergency room services and then not paying for the services in busy summer months. The cyclical nature of our business in the past would change income by up to 50% between January and July. In addition, in the past, big payer contracts are sometimes paid quarterly for contracted services. This makes it difficult to realistically match revenue and expense on a monthly basis.
One of the big problems with ACO’s, PQRS, and MIP’s is that the data comes from the payer and the data is delayed 3 months. Last year we thought we had the data collection and process working, and found out at the end that we missed our targets. Now we have quarterly reports made from our billing office evaluation of our reports (they bill from our reports and check for PQRS compliance). I know this will be an improvement, but this learning segment indicates that monthly PQRS reports are needed to go with our monthly financial statements and monthly billing report.
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We do monthly billing statements that include days in accounts receivable. Eventually (typically 90 days), the bills in AR are given to a collection agency. That data is not available.
Also the terms adjustments and collectible are not defined and should be.
Typically collections are 25% to 30% of charges when there is a lack of private insurance and we live on medicare and medicaid. The charges are about 4 million and the collections are about 1 million. So they are collecting as expected.
The accounts receivables and denials in accounts receivables should be categorized. We use timely filing, medical necessity, no authorization or referral, and not categorized for denials. We age our AR to try and get the payment before resorting to collection agency. Slow 90 day billing cycles will raise the AR temporarily (like ICD10 roll out). People fighting medical necessity and lack of preauthorization with their insurance company will delay payment and end up in collections.
In Feb- our days in AR was 26.7. Our RBMA benchmark 75th percentile was 32.7 days. So we are in top quarter.
Total write offs as a % of gross charges was 3.4% with 75th percentile benchmark 4.1%.
Bad debt recovery as a % of collection agency write offs is 16.4% with 75th percentile benchmark 18.8%.
Our AR over 120 days is 11% with 75% benchmark 8.8% and 50th percentile 12.7%.
So if the practice is in a medicare medicaid ghetto with no private insurers, the collections are appropriate. In an area with private insurance, the collections are low.
The AR management remains a question, since there is no data on aging and collection agency performance. and no benchmarks.
The bump in AR in August could be because the coders in the billing office took vacation and several people were out. That likely explains the bump in AR on 9/12 and the big paycheck on 10-12.
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Radiology at Beebe was theory X for my first 10 years. Techs and support staff did what they were told and did not deviate from protocol.
The last 8 years have progressed to theory Y. They collect data on employees and sometimes use it for improvement and usually use it to deny or minimize raises at annual evaluations.
Ouichi’s Theory Z with workplace empowerment is still far away.
I believe that as a leader, I have to be able to sense which leadership style a caregiver needs. Co workers without much intelligence can function in a theory x world and at least have a job. People that want to work, do well in a theory y world. People that want to work and can think, do well in a theory z world. Unfortunately we are not in a one size fits all world.
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The goal of most hospital mangers is to keep their job and their income. This means maximizing hospital revenues.
The goal of the patient is to get as healthy as possible as soon as possible.
These two goals are rarely aligned.
As a physician, my duty is to the patient first and to the hospital second.
How do I lead a dysfunctional organization that does not want to be lead?
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