The Symptoms of Bad Debt in SNFs

February 11, 2020 Melissa Bagnoli

The financial health of your skilled nursing facility is greatly impacted when you’re burdened with a large amount of bad debt, but because of the reimbursement nature for SNF services, you can’t eliminate bad debt entirely. However, by enforcing collection policies, analyzing data from your CRM, and enforcing consistent internal workflows and communication, you can help keep your debt in check.

Here are the signs that your bad debt is growing and that it’s time to take action.

Past Period Aging Isn’t Decreasing

One of the biggest indicators that your bad debt is growing is that your past period aging is not reducing over time, meaning your facility isn’t getting paid. You should be billing and getting paid for your services within a given month. For example, if you billed for services in December, you should see payment for those services within 30 to 45 days. If you are not getting paid within that time period it’s important look into what the issue is before it snowballs into a larger problem, resulting in more debt for your facility. You can use current and historical revenue cycle and resident mix reports to determine what payers are involved and why receivables aren’t being collected.

Revenue Flow is Slow

Slow revenue flow could also be a sign of bad debt growing within your organization. There are tools within the PointClickCare platform such as Eligibility Verification, that can help ensure you are securing the payer source. If you check the dashboard and see that an insurance company is terminating a patient’s plan, you will need to determine how you plan to secure another payer source.

Private Co-insurance Is Sitting on the Books for Too Long

If you notice balances for private insurance companies are sitting on the books month after month, you need to address the problem. This is often an indication that staff are not adhering to your facility’s collection policies which allow you to collect, recoup or write off this debt. It’s crucial that you identify and collect chronically late payments and determine why you haven’t been getting paid on time.

Small Balances are Staying on the Books for Months

Uncollected balances that remain unpaid for months can be a red flag for bad debt. Regardless of the amount, it’s critical to review the contract with the payer to determine what they are paying daily and whether they’re paying for ancillaries. The payer may not be required to pay for certain ancillaries, which could leave your facility on the hook for those costs. If you’re not billing claims based on the payer’s contract you could see more bad debt creep up.

Days Sales Outstanding Are Increasing

If your facility isn’t receiving Medicare payments on time, it will affect your DSOs – which will continue to accumulate until you are paid. You’ll need to determine why you’re not getting paid for your claims on time.

Click here to learn how PointClickCare can help you can improve your facility’s revenue cycle performance to remain profitable.

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