Strategic Financial Management for Skilled Nursing Facilities

Efficient and timely revenue collection is crucial for the financial management success of any medical facility, including skilled nursing facilities (SNFs). However, this can be challenging due to the complexity of SNF billing and collections. There can be numerous issues, such as inaccurate patient information, frequent claim denials, and inadequate follow-up on unpaid balances, that can all lead to lost profits and negatively impact the bottom line.

Therefore, it is essential for skilled nursing facilities to identify signs that indicate potential improvements in their SNF billing collections and overall revenue cycle. This blog outlines strategies to enhance revenue collection through better SNF billing practices.

1. Reduce High Claim Denial Rates

• Understanding Payor Requirements

One of the biggest challenges SNFs face is claim denials from Medicaid and Medicare. High claim denial rates slow down revenue collection as facilities spend significant resources researching and resubmitting claims. In fact, many rejections occur due to a lack of understanding of the payor’s specific requirements. Therefore, there is a need to regularly check the latest insurance regulations and requirements to ensure compliance.

• Improve Coding Accuracy

Coding errors, such as using invalid codes, frequently cause rejected claims. There is a need to ensure that staff are well-educated in SNF billing and coding procedures and understand the payor’s requirements. As a result, prioritize coding accuracy to minimize errors.

• Use Billing Software

You should consider using billing software that integrates with Electronic Health Record (EHR) platforms and validates claims before sending them to payors. This can decrease the number of errors and speed up revenue collection.

2. Increase Accounts Receivable Turnover

• Measure and Analyze AR Turnover

Accounts Receivable (AR) Turnover measures how efficiently a facility collects payments. It is calculated by dividing the net billable amount by the average AR balance during the same period. A low AR turnover indicates slow revenue collections and potential cash flow issues.

• Address Billing Errors

There are numerous common causes of low AR turnover, including billing errors due to incorrect patient or insurance information, delayed submission of claims, and failure to follow up on unpaid balances. Therefore, you should ensure accurate billing and timely claim submission to improve AR turnover.

• Review Payments for Accuracy

Regularly review all payments for accuracy, not just denied claims. This helps identify and correct underpayments by insurers, improving revenue collection efficiency.

3. Minimize Patient Eligibility Verification Mistakes

• Accurate Verification at Admission

It is crucial to verify a patient’s insurance coverage during admission and throughout their stay. Any mistake in this process can lead to revenue losses if services are not reimbursed due to ineligibility or exhausted benefits.

• Use Automation

You should implement automation solutions to track changes in patient eligibility. Automated systems minimize manual work, track changes in patient coverage, and provide alerts for coverage changes, ensuring accurate and updated patient information.

4. Ensure Accurate and Timely Charge Capture

• Document All Services Provided

Late or inaccurate charge capture occurs when facilities fail to record all patient services. In fact, incomplete medical records, lack of proper documentation, or human errors can lead to lost revenue.

• Establish Clear Protocols

There is a need to establish clear communication channels and protocols for documenting and capturing all patient services. Use automated software to help ensure that all services are accurately documented and billed.

5. Reduce High Days Sales Outstanding (DSO)

• Measure and Analyze DSO

Days Sales Outstanding (DSO) measures the average number of days it takes to collect payment after providing care. High DSO indicates inefficient billing and collections processes, inadequate billing software, or lack of follow-up on past-due accounts.

• Implement Automation Tools

You should use electronic billing and payment systems to reduce DSO. You can also outsource parts of the billing functions, like denial management and coding, to third-party service providers if necessary. Furthermore, maintain accurate documentation and follow up promptly with patients to avoid past-due accounts.

6. Decrease High Percentage of Write-Offs

• Verify Insurance Coverage

Write-offs occur when a facility agrees to forego uncollectible debt. Verifying patient insurance coverage ensures service eligibility, reducing the likelihood of write-offs.

• Collaborate with Patients

You should also work with patients to ensure they can pay their portion of the bill. In fact, establish payment plans or apply for financial assistance when necessary to reduce the probability of write-offs.

• Review Write-Off Reports

The situation also demands regular reviewing of write-off reports to catch inappropriate write-offs. SNF providers must ensure that claim denials are appealed when necessary and that underpayments are correctly categorized.

7. Outsource Billing Functions

• Identify Areas for Outsourcing

Outsourcing certain SNF billing functions can improve efficiency and reduce errors. Specialized third-party service providers can handle various functions such as denial management, documentation, and coding.

• Benefits of Outsourcing

Outsourcing can provide access to specialized expertise and advanced technologies that might be too costly to implement in-house. It can also free your internal staff to focus on patient care and other critical tasks. Achieve financial success in skilled nursing facilities with our strategic financial management expertise.

• Choose Reliable Partners

Select reliable outsourcing partners with a proven track record in SNF billing, one such partner can be 24/7 Medical Billing Services. In fact, our expert team ensures that they understand the specific needs and regulations of SNFs to maximize your profits and revenues.

See also: Tackling SNF Billing And Revenue Cycle Management Pain Points