Three Cash Collection Strategies to Prioritize for PDGM
The Patient-Driven Groupings Model (PDGM) is here, and organizations are currently focusing on adjusting their revenue cycle functions to stay successful under the new model. Home health organizations can focus on cash collections to prevent any loss or delay in cash flow due to PDGM’s significant changes and identify risks that could cause potential delays across the revenue cycle. There are three strategies organizations can focus on to increase cash flow under PDGM:
Manage accounts receivable aged over 120 days
Tackle unbilled accounts receivable
Create and utilize financial dashboards
Manage Accounts Receivable Aged over 120 Days
Organizations should place a focus on aged accounts receivable, specifically anything aged over 120 days. Managing accounts receivable is one of the most important financial components for any home health organization and placing a focus on AR aged over 120 will assist greatly in generating cash flow while decreasing accounts receivable altogether. This will also assist in identifying any potential payer or process issues. The recommended percentage of AR aged over 120 days for any home health organization is 10-15% of total AR. This will allow them to collect on aged accounts to increase cash collections. Resolving accounts aged over 120 days will also assist in the overall stance of the organizations’ accounts receivable.
Tackle Unbilled Accounts Receivable
Additionally, organization can focus on handling unbilled accounts receivable now as this is another way to increase cash flow by identifying claims that are able to be billed. Organizations could outsource or increase staffing to focus on identifying outstanding documentation, types of pre-billing errors, and other components affecting unbilled claims from being billed. Ultimately, this will assist in the overall position of an organizations’ unbilled, while increasing cash collections under PDGM.
Create and Utilize Financial Dashboards
Lastly, organizations can create dashboard reports to monitor several financial metrics including cash collections by AR and payer. This can help track and identify trends, identifying payer-related issues, and possibly forecast future cash collections. This will assist in determining what metrics agencies should prioritize to potentially increase cash collections. The table below shows the recommended metrics and the frequency these reports should be created:
In summary, working to ensure no more than 10-15% of an organization’s total AR is in the 120+ bucket, focusing on accounts in the unbilled AR bucket, and creating dashboard reports to monitor cash collections and AR by payer, can help organizations adjust to PDGM, as there are expected delays across the revenue cycle with Medicare’s PDGM reimbursement changes.
McBee Solution for PDGM Cash Acceleration
McBee has specific solutions to keep the cash flowing through your organization while you adjust to PDGM. These solutions include:
Eliminating backlogs and bringing receivables up to date
Identifying missed revenue, correcting claims errors, and resolving problem accounts with no disruption to your organization’s daily operations.
Utilizing your existing accounts receivable system or employ our secure proprietary collection system