The Cost and Effect of Uncollected Past Due Receivables
LMC Dynamics LLC is a Claim and Risk Management Consulting Company as well as a Corporate Member of LANO. Our years of experience uniquely qualify us to understand how and why collecting your receivables from Magellan has been so difficult. Timeliness plays such an important role in the life of a claim. When you file your claim, the accuracy of the information you input and the follow-up all matter when it comes to getting the claim paid.
Regardless to whether your program is functioning now, or is no longer operating, there is still time to collect your funds. The vast majority of non-profit organizations are not staffed to have dedicated employees handling claims. Unlike in the past when the process and procedure only involved providing the service and sending in the bill, large corporations require the non-profit staff to do a lot more to get paid. In order to recover your funds, you need a skilled team to deal with Magellan to recycle your funds.
Collecting your past due receivables has taken on a life of its own. At this juncture, you have already paid the counselors for providing the valuable services to the community. The cost is not just in providing the services, but there are the costs of re-allocating resources from other departments to recover funds, as well as having to hire temporaries to properly prepare claims for code or re-code for re-submissions. Taking staff from their assigned job and placing him/her with the additional task of chasing receivables amount to employees having to do their assigned jobs, plus the job of recovering monies from the payers. Subsequently, their responsibilities to both suffer. Approximately 80% of their time will be spent on their regular tasks, and only 20% will be dedicated to re-submitting claims for payment. The tasks of billing, re-billing, checking the adjudicated claim for denial reasons, and contacting the payer sometimes is still not enough to get a claim paid.
We opined that one of the mission statements of every organization is 'to serve the community'. Self-Generated Revenue allows non-profits to better serve the community and fund additional programs beyond your donor and fundraising base. When your programs are decreased, slowed, or dissolved, it diminishes your value add to the community. Counselor’s hours are reduced or counselors maybe let go. This directly affects their lives and livelihoods. Overworked professionals on your staff now have to do more with less as they have to absorb additional workloads. This can lead to the professional cutting corners on the services provided in order to do their jobs.
But perhaps the biggest effect of not maximizing self-generated revenue in your organization is that the lack of service delivery hurt the very people it was designed to help, the client/participant. When these participants cannot get the counseling and other services they need, they suffer and society suffers as a whole. It all starts with providing the services and keeping your programs thriving. This is why recovering your funds as soon as possible is so very important. Allowing payers to continue to deny claims does not maximize service to our communities.
In conclusion, Kingsley House of New Orleans could wait no longer. They were experiencing similar issues as majority of you all are with their non-paid receivables. Their Chief Financial Officer called us in to solve their problem. After scrubbing their claims and coming up with various strategies, LMC Dynamics was able to successfully recover all 'recoverable' funds for Kingsley House.