When healthcare practices merge or are acquired, it’s not just a matter of signing papers and shaking hands. There’s a tangled web of administrative transitions that follow, each fraught with its own challenges. Chief among these is managing accounts receivable (A/R) effectively. Get it wrong, and cash flow suffers. But handle it right, and you smooth the path to financial stability under the new structure. Here’s how to navigate the most common obstacles.
Tackling TIN Changes
Tax Identification Numbers (TINs) are the lifeblood of billing operations. When practices merge, updating TINs becomes a top priority. Without prompt updates, your claims will face inevitable rejections—and denied claims mean delayed payments.
The worst-case scenario? A backlog of re-submitted claims piling up, waiting for the new TIN to be recognized by payers. To prevent this, prioritize communication with all payers to update the practice's TIN as soon as possible. This includes both commercial and government entities like Medicare and Medicaid. It’s not just a flip of the switch; timelines for updates vary by payer—sometimes taking up to 90 days.
Credentialing Struggles
Credentialing is often the bottleneck in practice mergers and acquisitions. Providers must be re-credentialed with payers under the new TIN. It’s a painstaking process that requires patience and precision. Missing or incorrect information can cause further delays.
Don’t leave this task to junior staff. Assign your most experienced team members to handle these updates. They know the quirks of payer portals and can navigate the inevitable "missing document" claims more efficiently. And remember, some payers are notorious for their credentialing delays (looking at you, Anthem). So, start early and follow up regularly.
Navigating A/R Ownership
One of the trickiest parts of a merger is determining who owns which receivables. Is it the old entity, the new one, or a blend of both? Legal agreements will dictate this, but the devil is in the details. Detailed tracking and documentation are your allies here.
Ensure your team understands which claims fall under the old TIN and which under the new. Updating your billing system to reflect these changes is not optional. Transition periods can be confusing, but maintaining separate accounts or thorough tagging systems will help keep everything clear. This is where Arrow, or a similar AI-powered billing tool, can help—keeping track and flagging discrepancies before they become issues.
Addressing Denial Management
As if the merger didn’t complicate things enough, you'll face an uptick in denials during this transition. It’s inevitable. Codes like CO-16 (claim/service lacks information) or CO-22 (this care may be covered by another payer per coordination of benefits) will pop up more frequently.
Establish a focused denial management team to tackle these head-on. Quick, decisive action is necessary to resolve denials before they snowball. Create a prioritized list based on dollar amount and likelihood of resolution. And don’t underestimate the power of persistence; sometimes, that means calling the payer every day until you get someone who can actually help.
Ensuring Cash Flow Stability
During a merger, your practice’s financial stability can feel precarious. While A/R transitions are underway, cash flow needs to remain steady. One way to ensure this is to project potential cash flow gaps and have contingencies in place.
Consider short-term financing options if needed, but ideally, your financial planning should account for these disruptions long before they occur. Forecasting is your friend—understand the average days in A/R for each payer and adjust your billing priorities accordingly.
Maintaining Clear Communication
Communication can make or break the transition process. Internally, keep all stakeholders updated on progress, challenges, and successes. Transparent communication prevents misinformation and keeps everyone aligned on goals and timelines.
Externally, communicate changes to patients as well. They need to know about any changes to billing processes or payer contracts that affect them. Nobody likes surprise medical bills, and keeping patients informed can prevent dissatisfaction and potential churn.
Monitoring Post-Merger Performance
Once the dust settles, it’s essential to monitor the post-merger performance of your A/R processes. This includes analyzing days in A/R, denial rates, and overall cash flow. Compare these metrics to pre-merger benchmarks to determine if additional adjustments are needed.
Frequent audits of your billing processes can catch lingering issues and ensure continuous improvement. Use these insights to refine strategies and streamline operations going forward—or to put it more plainly, to fix what still isn’t working.
Looking Ahead
Managing A/R during a practice merger or acquisition is no small feat. It requires strategic planning, detailed execution, and relentless follow-through. But with the right approach, these transitions can be handled with minimal disruption. Prioritize effective communication, proactive credentialing, and diligent denial management to ensure a smoother path forward. After all, the success of your practice's financial future depends on it.
Related Articles
