Accounts receivable means different things to different people.

• To the CPA, A/R is an asset;
• to the governing body, A/R is a way to measure the success or failure of the administrator;
• to the administrator, A/R denotes whether the collections specialist is performing her job properly;
• and to the collector, A/R is the standard by which she measures her daily accomplishments.

Ins and outs of A/R
Here are some tips for measuring and collecting the money that's owed to your surgical facility.

• Measuring your days in A/R. One of the most common ways to gauge the efficiency of your A/R system is to measure the average amount of time a billed charge remains in A/R before you collect it. The goal, of course, is to keep this number as low as possible.

First, add the last three months or six months of your total billed charges to obtain a rolling average, and then divide that number by the calendar or business days in that time period. This will provide you with your average daily charge. Next, divide your current A/R balance by that average daily charge. This tells you the amount of days a charge remains in your system, and from there you can set a goal. For example, if you find that your average number of days spent in A/R is 67, aim to decrease that amount to fewer than 50 days in your future collections.

• Trend-spotting. A look at A/R can help you analyze your system for trends and weaknesses, pinpointing specific areas where you should concentrate your collection efforts. To organize your data, check your billing software package - most will let you measure your A/R by payer, physician provider or specialty. You can also export data from the software into a spreadsheet, and from there, manipulate it to fit your needs.

Once your information is clearly laid out, you can easily spot trends: Have there been a series of Medicaid non-payments due to a computer problem? Are implants not being paid for specific procedures? Has the average reimbursement for ENTs dipped due to decreased volumes or improper payments?

When you've zeroed in on your problem areas, create a denial log to record errors that cause delayed claims - such as form errors, coding errors or clearinghouse errors. Once you've identified these errors, you can quickly fix them and resume the reimbursement flow. It also helps to maintain a delinquent operative notes log so your staff can quickly spot and report trends to you.

• Divide and conquer. If looking at your A/R balance as a whole is overwhelming, dividing it into smaller categories can make both analysis and day-to-day collections far less daunting. Grouping the balance into buckets or categories denoting length of time since the date of service can also make it easier to determine if there is a weakness in one of the assigned areas of collection. It also exposes problem accounts.

Divide your balance into groups according to their length of time in A/R - 30 days, 60 days, 90 days and more than 120 days. The goal of your collection staff should be to touch each account at least once a month - twice a month for those problem 120-days plus accounts. Hopefully, however, you won't have too many of those problem accounts: According to the national benchmarking MGMA ASC Performance Survey of 2003, the 120-days plus portion of your total A/R should be no more than 15 percent.

Have your collections specialist focus on one bucket each week of the month. For example, the first week's target could be those accounts languishing unpaid for 90 days to 120 days, while the second week's focus are those totaling 45 days to 60 days. In the third week, the collector can then move on to the 15-day and 30-day accounts. Finally, she should devote the fourth week to revisiting those 90- and 120-day-plus accounts she touched in the first week.

For another collections option, section out your A/R by payer. Have your collection specialist concentrate on a quarter of these each week - this way, she can discuss all outstanding claims, regardless of age, with one phone call to a particular payer.

• Set your goals and reward your people. Setting goals is an important aspect of collections; it stands as a definitive method for measuring your collection efforts. To estimate a monthly goal, start with your current budget for monthly collections, and add an additional percentage for A/R more than 120 days old (you can arrive at this figure by calculating the difference between the national benchmark average of 15 percent and your own 120-day plus percentage). Be sure to provide your collection specialists with a spreadsheet that presents an ongoing comparison of the daily goal versus their actual collection results. Also, post charts showing weekly, monthly or quarterly progress.

When your collectors meet their goals, reward them. How you do this is up to you: monetary rewards, gift certificates or extra vacation days.

Also, be sure to recognize the worker's success in the presence of her peers - a little pat on the back can go a long way toward promoting continued success.