Resolve credit balances to improve compliance and reporting

A vital component of the revenue cycle, credit balances need to be continuously resolved to avoid big or old debt, which can have detrimental effects on healthcare providers. Discover how to identify and fix problems with credit balances. A mask-wearing doctor goes over papers.For healthcare companies, credit balances are a standard aspect of operations; they usually contribute for 1% to 5% of total gross accounts receivable. Furthermore, even though credit balances are an essential component of the revenue cycle, they must be continuously resolved and given frequent attention in order to avoid accruing big or old liabilities. But because credit balances need thorough reporting and ongoing account evaluation, they can be difficult for providers to settle. Additionally, they need the dedication of full-time staff, and it might be costly to spend money inside in order to transmit money outside. Because of this, big or old credit balances are frequently missed until an audit or private equity activity occurs, at which point the risks and expenses associated with correction are excessively high.

Until there is private equity activity or an audit, credit balances are frequently unknown, increasing the risks and needlessly expensive remediation costs.

Credit balance risks

Large or old credit balances come with a number of concerns, including as the possibility of Medicare audits, fines and interest on unclaimed property, patient complaints to state authorities, and possible payer requirement breaches. Under the Affordable Care Act, providers are required by law to promptly settle credit balances (ACA). Overpayments to Medicare and Medicaid must be reported and reimbursed within 60 days after determining the credit balance. If providers don't comply, they run the danger of being charged with fraud under the False Claims Act. Successful healthcare businesses address and resolve credit balances pro-actively in order to minimize the numerous dangers. Now let's examine how.

Does your healthcare facility have a problem with its credit balance? Start by considering these inquiries to see whether your healthcare business could experience difficulties with credit balances: 1. How frequently does my company pull credit balance information from the patient accounting system or electronic health record (EHR)? Reports on credit balances must to be generated at least once per month. You should also configure your EHR to alert you when an account's credit balance is exceeded. 2. Does my company submit the necessary Medicare 838 forms on a quarterly basis? 3. Did our internal audit discover any old or high credit balances—that is, ones that are more than three to five percent of the accounts receivable or more than roughly six months old? 4. Does my company file yearly unclaimed property reports in the state where it is registered or, in the case of patients from outside the state, in the state where the patient last known address is located? If you have no credit balances to report, several states mandate negative reporting. 5. Do we have enough rules in place to stop credit balances and promptly settle them? These ought should comprise, in addition to:

Policy for collecting bad debts Policy on financial hardship Medicare 838 form policy guidelines Policy for patient credit balance Refund policy for overpayments and payee credit balances Payment posting guidelines Policy for point-of-service collections Policy for unclaimed property Policy on Voided Charges Policy for small-dollar adjustments

Address problems with credit balances

Following the discovery that your company has a significant number of old accounts with credit balances, three studies must be carried out.

1. Start to assess your data and analytics methods.

Start by performing an exploratory analysis on your data in order to start determining the issue. An exploratory analysis aids in determining whether your data analytics techniques for identifying the core cause will be effective on the retrieved data as well as the viability of retrieving the appropriate data from your electronic health record or patient accounting systems.

2. Stratify credit balances by payer.

This is important because the resolution will vary by payer since payer type determines the lookback period. Lookback periods for Medicaid, patient, and commercial insurance vary by state, and the Medicare lookback period is six years.

This is crucial since the lookback time is determined by the payer type; therefore resolution will differ depending on that payer. States have different lookback periods for Medicaid, commercial insurance, and patients; Medicare has a six-year lookback term.