AR Inventory Analysis, Identifying Trends, Upload the Inventory to get the Analysis Report

AR Inventory Analysis is the most important part that will help to make the strategy on how can you start working on the inventory? and how many resources are required to complete the inventory in a specific time period?

It helps to complete a higher amount of work within a minimum amount of time.

It is a difficult task when you are trying for the first time and requires AR knowledge as well to identify trends.

But once it is prepared then based on the strength of your team members, you can allocate the claims and complete them within the given time frame.

Below are the pointers that will help you to prepare an inventory analysis summary and identify trends,

1. Identifying Workables/Non-Workables:

• It is necessary to first bifurcate workable and non-workable claims. Non-workable claims include claims that are not allowed to work. Non-workable claims could include,

• Any specific payer (As instructed by the client)
• Specific Aging bucket (As instructed by client)
• Claims that are already in the patient bucket.
• Claims with zero balance amount or negative balance amount.

2. Identifying Callable and Non-Callable Inventory:

• Identifying calling and non-calling claims is the most important since we get a limited time in a day to get status on call. This bifurcation will help you while allocating claims.

• This will help to utilize the entire shift hours.

• You can also create a separate team to work on callable and non-callable claims.

• Non-callable claims can be worked on a higher percentage that will balance the entire day's work.

• Non-callable claims can be identified based on the workflow given to work on any denials or payers. For example, Eligibility related denials such as 31 - Patient not identified, 26 - Coverage Terminated, 22 - Other payer primary, and many more. These denials can be worked directly through the website if website access is available.

• Non-callable claims can also include claims where website access is available and you can utilize the website to get claim status.

• These are some examples but based on the workflow, you can identify which claims will require calling or not. 

3. Defining Aging Bucket:

• Aging Bucket will help you to target the claims timely before it crosses the TFL/AFL.

• It is good to target the 90+ days bucket first on no-response claims.

• Aging days between 30-90 are too early to work on no-response claims.

• When working on denials, an aging bucket of 30-90 can be worked initially since these claims have already been denied.

4. Denial trends based on payers:

• You can create a pivot of denials versus payers that will help you to identify specific payers with a high volume denial.

• This is very helpful while identifying Credentialing denials.

• Resolution to these credentialing issues will resolve the higher number of claims.

• You will also get other denial trends when you will create this pivot. Credentialing denial is just an example with a higher possibility.

5. TFL/AFL Crossed Claims:

• If you have a year old claims in your inventory then this will be very helpful to eliminate claims where TFL/AFL crossed and those claims can be adjusted off.

• Based on the TFL and AFL of a particular payer, you can identify claims that cannot be reimbursed since the TFL and AFL of that particular claim are exhausted. You can get the approval to adjust all such claims.

• For Example, Medicare claims cannot be reimbursed if the Date of service crosses 1 year. Taking any action on that particular claim after 1 year will not work and that claim needs to be adjusted.

6. Not an Insurance Claims:

• You can identify payers that are not insurance from your inventory list.

• To identify such payers, you will need to check the insurance name. Sometimes, by reading the name you can identify that this is not insurance.

• The volume of such claims will not be much higher but it will definitely help to remove this small volume quickly.

• These claims can be released to the patient or billed to another active insurance.

Above are a few factors that will be helpful in Inventory analysis and identifying trends. But, this could include many other factors based on the actual inventory. If you want, we can help you in creating an Inventory analysis report by identifying trends. Just fill out the below details and upload your inventory or email us your inventory to contact@arlearningonline.com

Upload the Inventory for Inventory Analysis Report:

Please remove PHI information from the Inventory.

Note: Once inventory is uploaded, we will send the confirmation email to your email ID within 24 hours. Please provide the confirmation then we will start preparing the analysis report.

Your Name:

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Your Email:

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Message:

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Payment Validator Tool

Payment Validator tool will help you to validator the payment information given on call is correct or not. You just need to enter below information then click on "Balance Amount". The result must be "0", if it is not "0" then it means that the values of Allowed amount, Paid amount and PTR are incorrect.

Billed Amount:

*

Allowed Amount:

*

Paid Amount:

*

PTR (DEDUCTIBLE):

*

PTR (COINSURANCE):

*

PTR (COPAYMENT):

*

Contractual Adjustment:

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Key Performance Indicators (KPIs) in Medical Billing

Key Performance Indicators (KPIs) are helpful to increase the performance and collection of the practice. It shows the health of the practice that can be improved if not good. Below is the list of KPIs.

1. Days in AR (Account Receivable):

• Days in AR measures how many days it takes to get paid for the services. 

• Days in AR help the provider to determine the time frame to receive the payment.

• Days in AR Calculation: (Total AR (Account Receivable) amount / Total Charges amount) * number of days

• For example, If we take 3 months of data where the total AR value is $50,000.00 and the value of the total charge is $100,000.00 then Days in AR will be (50,000/100,000) * 90 = 45 days

• If the AR days are 35 or below 35 then AR performance is considered as "High". If AR days are between 36 to 50 days then AR performance is considered "Average" and if the AR days are above 50 then AR performance is considered as "poor".

2. Percentage of AR older than 60 days:

• This represents AR older than 60 days. Usually, denied claims are included in this bucket and require more work to get paid.

• Percentage of AR older than 60 days calculation: Total AR Balance Greater than 60 Days / Total AR balance of all ages

• The percentage must be less than 25% to keep the high performance.

• With the same formula, we can calculate the AR for 90 or 120 days.

3. First Pass Resolution Rate:

• FPRR shows the percentage of claims that are paid in the first pass when submitted to the insurance company. 

• It shows the effectiveness of your RCM process & If the FPRR is low then it is necessary to focus on insurance verification, billing, and coding for a more efficient Revenue Cycle Management (RCM).

• More effective FPRR will decrease the AR and payment will be much sooner.

• FPRR Calculation: Number of claims paid on a first pass / Total number of claims submitted

• FPRR must be 90% or higher for high performance.

4. Gross Collection Ratio:

• GCR is useful for measuring a firm's profitability. It shows what the practice is allowed to collect.

• A high gross collection ratio (GCR) indicates that the fees are closer to the insurance's fee and the practice is doing well in terms of collecting money.

• Every practice has a different GCR due to a unique fee schedule, therefore this metric is best to monitor internally rather than compared with industry benchmarks or other practices.

• GCR Calculation: (Total Payment amount / Total Charge Amount) * 100% (for a specific time period)

5. Net Collection Ratio:

• Net Collection Ratio helps to measure the overall health of the billing and collection process.

• It is helpful to determine the efficiency of the practice by measuring reimbursement amount over the allowed amount. 

• It is also helpful to determine how much revenue is lost due to contractual adjustments or other adjustments.

• A high NCR indicates timely billing and reimbursement from insurance and patient.

• The net collections ratio is the percentage of total reimbursement collected out of the total allowed amount.

• NCR Calculation: (Total Payment Amount / (Total Charge Amount – Contractual Adjustments)) * 100

• Net Collection Ratio must be 98% or greater. NCR, below 90% is considered poor performance. 

6. Collection Per Visit:

• It is helpful in determining how much money is getting collected on a visit. 

• It is a good way to measure the practice against the industry standard and other same-specialty practices in the same area.

• This will enable you to determine the appointments that are most profitable, further helping you to prioritize similar cases.

• It is helpful in determining the most profitable appointments and such appointments must be increased to generate more profit for the practice.

• Collection Per Visit Calculation: Total Reimbursements / Total Visits (for a specific time period)

7. Contractual Variance:

• Contractual Variance is the amount that is paid less by the insurance company as per the contract.

• For Example: If a CPT code is decided to be paid for $40.00. However, if insurance pays only $25.00 then the Contractual Variance will be $40.00 - $25.00 = $15.00

• This can be affected due to incorrect billing or changes in the contract.

• It is necessary to have analytics to calculate the difference between the received amount from insurance to the expected amount as per the contract.

• Contractual Variance Calculation: Contracted Rate - Insurance Allowed Amount

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The Birthday Rule & New Born Baby Coverage

• When a new baby is born and both mother & father have added their child into their coverage (both are having different health plan coverage) then it is necessary to determine the correct primary insurance for child coverage.

• The Birthday rule is used to determine primary insurance for child coverage. As per the birthday rule, the parent whose birthday comes first in the year his/her health plan considers primary insurance while the other parent's health plan considers secondary insurance.

• For example, A father's birthday is 15th April 1985 & a mother's birthday is 20th March 1987. Both are having different health plans and have given birth to the new baby then mother's health plan will be primary insurance for the child's coverage since her birthday comes first in the year and the father's health plan will be considered secondary insurance.

• If parents have the same health plan coverage then the birthday rule does not require child coverage.

• When parents do not have coverage for a child in their health plan coverage then the child is automatically covered under the mother's health plan for the first 30 days if she has health plan coverage. On the 31st day, this coverage ends and it is necessary to have separate coverage for a baby.

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Modifiers Q7, Q8 & Q9

• Modifiers Q7, Q8 & Q9 are used with podiatry services. Podiatry services include routine foot care and treatment related to the feet and lower limbs of the body.

• Podiatry CPT codes are 11055, 11056, 11057, 11719, 11720, 11721, G0127, and G0247.

• Generally, Medicare does not cover routine foot care but under certain circumstances, routine services are covered when these services are medically necessary.

• Modifiers Q7, Q8 & Q9 are required when reporting medically necessary routine foot care services.

• Reporting of modifiers is based on below conditions,

• Modifier Q7 - One Class A finding
• Modifier Q8 - Two Class B Findings
• Modifier Q9 - One Class B and two Class C findings

Class Findings:

• Class A:

• Non-traumatic amputation of the foot or integral skeletal portion thereof

• Class B:

• Absent posterior tibial pulse
• Absent dorsalis pedis pulse
• Advanced trophic changes (at least three of the following):
• Decrease or absence of hair growth
• Nail thickening
• Skin discoloration
• Thin and shiny skin texture
• Rubor or redness of the skin

• Class C:

• Claudication
• Temperature changes (cold feet)
• Edema
• Paresthesia (abnormal spontaneous sensations in feet)
• Burning

Click Here to see the list of modifiers

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What is Rejection? & How to work on Rejections?

Rejection:

• Rejected claims are those that never entered into the insurance processing system for processing and such claims get rejected through PMS (Software) or Clearinghouse. 

• A Claim needs to be passed successfully through software, provider clearing house & insurance clearing house to enter into the insurance processing system. If a claim fails to pass any of these 3 systems then we get a rejection. 

• There are 3 types of rejections:

• Rejected by PMS (Software) - These claims do not go out of the software since they get rejected by PMS only.

• Rejected by Provider Clearing House - These claims are successfully passed through software but rejected by the provider clearing house.

• Rejected by Insurance Clearing House - These claims are successfully passed through software and provider clearing house but rejected by the insurance clearing house.

Below are a few most common rejections with resolution steps:

1) Policy ID invalid / Patient or Subscriber not identified: 

• These rejections generally occur due to 2 reasons,

• When a claim is billed with an incorrect policy ID
• When a claim is billed to an incorrect payer ID

    I) When a claim is billed with an incorrect policy ID:

• In the clearing house, there is already a policy ID format set up related to an insurance company that needs to be followed when billing claims.

• For Example - The format for the policy ID of UHC is 9 digits number, so if the claim is billed with 10 digits number then it gets rejected for invalid policy ID format.

• Resolution: You can utilize the payer website to find out the correct policy ID and resubmit the claim with the correct policy ID.

• If the website access is not available then you can check the insurance history or payment history to find out the correct policy ID.

• If you are unable to find the correct policy ID then check your insurance history for another active primary insurance.

• If you are able to find another insurance then check the eligibility and resubmit the claim to the new insurance if it is active.

• If another insurance is not active on DOS then release the claim to the patient. (Follow your client update before releasing the claim to the patient)

• Below is the list with the correct policy ID format of payers that will be helpful to identify the correct policy ID,

Insurance	Policy ID Format	Policy ID Examples
1199 SEIU FUNDS	10 digits number	1234567890
AARP	11 digits number	12345678901
Aetna	10 digits alphanumeric characters (1st character always a letter "W")	W123456789
Aetna Medicare	8 digits alphanumeric characters	ABCDEF1G OR ABCDE1FG OR ABCDE12F OR ABCD123E OR ABCD12EF OR ABCDEFGH
Affinity Health Plan	11 digits number	12345678901
All Saver	9 digits alphanumeric characters (1st character always a letter "C")	C12345678
Amerigroup	9 digits number	123456789
AVMED	11 digits alphanumeric characters (1st character always a letter "A")	A1234567890
Bankers Fidelity Life OR Bankers Life & Casualty	10 digits number	1234567890
BCBS	12 digits alphanumeric characters (1st 3 characters are always letters)	ABC123456789
BCBS	14 digits alphanumeric characters (1st 3 characters are always letters)	ABC12345678901
BCBS FEP	9 digits alphanumeric characters (1st character always a letter "R")	R12345678
Cigna	9 digits alphanumeric characters (1st character always a letter "U")	U12345678
Colonial Life	9 digits number	123456789
Emblem Health	9 digits alphanumeric characters (1st character always a letter "K")	K12345678
Fidelis Care	11 digits alphanumeric characters (1st digit always a letter "7")	7123456789
Fox Everett	9 digits alphanumeric characters (1st 2 characters are always letters "FE")	FE1234567
Freedom Health	11 digits alphanumeric characters (1st character always a letter "P")	P1234567890
GEHA	8 digits number	12345678
GHI	9 digits number	123456789
Golder Rule	9 digits number	123456789
Humana	9 digits alphanumeric characters (1st character always a letter "H")	H12345678
Mail Handlers Benefit Plan	11 digits number	12345678901
Medicaid AK	10 characters in length, containing only numbers	1234567890
Medicaid AL	13 characters in length, containing only numbers	1234567890123
Medicaid AR	10 characters in length, containing only numbers	1234567890
Medicaid AZ	9 characters in length, containing both letters and numbers. 1st character is always a letter (compulsory "A").	A12345678
Medicaid CA	It has 2 formats, I - 14 characters in length, and contains both letters and numbers. The 9th character is always a letter. II - 9 characters in length, containing both letters and numbers. The 9th character is always a letter.	12345678A01234 OR 12345678A
Medicaid CO	7 characters in length, containing both letters and numbers. 1st character is always a letter.	A123456
Medicaid DC	8 characters in length, containing only numbers	12345678
Medicaid FL	10 characters in length, containing only numbers	1234567890
Medicaid GA	12 characters in length, containing only numbers	123456789012
Medicaid HI	10 characters in length, containing both letters and numbers. 2nd character is always a letter.	1A234567890
Medicaid ID	10 characters in length, containing only numbers	1234567890
Medicaid IL	9 characters in length, containing only numbers	123456789
Medicaid IN	12 characters in length, containing only numbers	123456789012
Medicaid KY	10 characters in length, containing only numbers	1234567890
Medicaid LA	13 characters in length, containing only numbers	1234567890123
Medicaid MA	12 characters in length, containing only numbers	123456789012
Medicaid MD	11 characters in length, containing only numbers	12345678901
Medicaid MI	10 characters in length, containing only numbers	1234567890
Medicaid MN	8 characters in length, containing only numbers	12345678
Medicaid MS	9 characters in length, containing only numbers	123456789
Medicaid NC	10 characters in length, containing both letters and numbers. The 10th character is always a letter.	123456789A
Medicaid NH	10 characters in length, containing only numbers	1234567890
Medicaid NJ	12 characters in length, containing only numbers	123456789012
Medicaid NM	14 characters in length, containing only numbers	12345678901234
Medicaid NV	11 characters in length, containing only numbers	12345678901
Medicaid NY	8 characters in length, containing both letters and numbers. 1st, 2nd, and 8th characters are always letters.	AB34567C
Medicaid OH	12 characters in length, containing only numbers	123456789012
Medicaid OR	8 characters in length, containing both letters and numbers. 1st, 2nd, 6th and 8th characters are always letters.	AB345C6D
Medicaid PA	10 characters in length, containing only numbers	1234567890
Medicaid TX	9 characters in length, containing only numbers	123456789
Medicaid UT	10 characters in length, containing only numbers	1234567890
Medicaid VA	12 characters in length, containing only numbers	123456789012
Medicaid WA	11 characters in length, containing both letters and numbers. 10th and 11th characters are always letters (compulsory "WA").	123456789WA
Medicaid WV	11 characters in length, containing only numbers	12345678901
Medicaid WY	10 characters in length, containing only numbers	1234567890
Medicare	11 digits alphanumeric characters ((1st, 4th, 7th, 10th & 11th characters are always numbers) (2nd, 5th, 8th & 9th characters are always letters) & (3rd & 6th characters are either numbers or letters))	1AB2CD3EF34 OR 1A23B45CD67 OR 1A23CD4EF56 OR 1AB2C34EF56
Meritain Health	10 digits number	1234567890
Optimum Health	11 digits alphanumeric characters (1st character always a letter "T")	T1234567890
Oxford	10 digits number	1234567890
UHC	9 digits number	123456789
UMR	8 digits number OR 9 digits alphanumeric characters (1st character always a letter "Y")	123456789 OR Y12345678

    II) When a claim is billed to an incorrect payer ID:    

• When a claim is billed to an incorrect payer ID then also we get this rejection.

• For example, UHC payer ID is 87726 and the claim was billed to payer ID 95226.

• Resolution: You can find out the correct payer ID and resubmit the claim.

• On the below link, you will get the list of payers with their payer ID that will be helpful for correct submission,

• https://www.arlearningonline.com/2021/07/list-of-insurances-with-payer-ids.html

2) Subscriber Name or DOB invalid:

• This rejection occurs when a patient does not have an active policy on DOS. 

• Resolution: You can utilize the payer website to find out the correct name or DOB and resubmit the claim with the correct information.

• If the website access is not available then you can check the insurance history or payment history to find out the correct Name or DOB.

• If you are unable to find the correct information then check your insurance history for another active primary insurance.

• If you are able to find another insurance then check the eligibility and resubmit the claim to the new insurance if it is active.

• If another insurance is not active on DOS then release the claim to the patient. (Follow your client update before releasing the claim to the patient)

3) Patient not eligible on Date of Service:

• This rejection occurs when a patient does not have an active policy on DOS. 

• Resolution: You can check patient eligibility to verify whether this is a correct rejection or not. If it is not a correct rejection and the patient is active on DOS then you need to verify that the patient demographic information (Patient name, DOB, policy ID) is correct or not. If all the information is correct then simply resubmit the claim. If you find that any particular information is not correct then make the correction and resubmit the claim.

• If the patient is not active on DOS then you can check the insurance history to find out another active insurance.

• If you are able to find another insurance then check the eligibility and resubmit the claim to the new insurance if it is active. If another insurance is not active on DOS then release the claim to the patient. (Follow your client update before releasing the claim to the patient)

• If you are not able to find any other active insurance then you can release the claim to the patient. (Follow your client update before releasing the claim to the patient)

4) Payer address invalid or incomplete:

• This rejection occurs when a claim is billed to insurance at an incorrect address. OR sometimes patient provides insurance information that is outside of the US.

• Resolution: You can try to find out the correct address of the insurance if it belongs to the US and resubmit the claim.

• If the insurance address is outside of the US then you can check the insurance history for another active insurance.

• If you are able to find another insurance then check the eligibility and resubmit the claim to the new insurance if it is active.

• If another insurance is not active on DOS then release the claim to the patient. (Follow your client update before releasing the claim to the patient)

5) Patient/Subscriber zip code is invalid:

• This rejection occurs when the patient's zip code is missing or invalid.

• Resolution:

• You can search on google with the patient's address to find out the correct zip code.

• You can check patient eligibility on the payer website to find out the correct zip code.

• You can utilize below USPS website to find out the correct zip code. You can find out the correct zip code by street address or city & state.

• https://tools.usps.com/zip-code-lookup.htm

• Once you get the correct zip code then update it and resubmit the claim.

6) Accident type is invalid:

• This rejection occurs when a claim is billed to Auto or Worker Compensation but the appropriate box is not checked on the claim form. 

• On the CMS1500 form, in box# 10 an appropriate box needs to be ticked when billing to Auto or Worker Compensation insurance.

• Resolution: You can tick the correct box through the software and clearing house and resubmit the claim.

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