May 2013

The Dating Game
By Sou Chon Young
For The Record
Vol. 25 No. 8 P. 28

A date—the unromantic kind with a month, day, and year—is pretty straightforward until you look at a cash-posting report. Then it can become a health care organization’s version of the Abbott and Costello skit “Who’s on first?”

For example, the finance department uses the deposit date as its date of reference, but patient accounting considers the date of posting as the deposit date. When running reports or examining figures, using different dates can derive different results.

Ultimately, the various dates can cause reconciliation nightmares between—and even within—departments. As a result, it’s important to know all the dates involved in cash posting and which one is being used when a report related to cash posting is requested.

The following are a few of the dates used by a cash-posting team:

• today’s date;

• date of check;

• date check was received (by lockbox vendor or cash-posting area);

• date of transaction;

• date batch opened;

• date batch closed; and

• date of deposit.

To further complicate matters, the manner in which deposits and supporting documentation (ie, explanation of benefits (EOB) or electronic data interchange files) are received can add their own set of nuances and twists. For example, consider the following scenarios:

Electronic remittance advice and electronic funds transfer (EFT): Because conducting business electronically saves time and decreases transactional costs, this is the best-case scenario. However, there still are a few dates that may cause confusion: the date the electronic remittance advice (835) file was provided by the payer or the clearinghouse, the date the 835 file was downloaded, the date within the 835 file that the hospital system considers to be the transaction date, and the date of the EFT deposit.

Be cautious when using the check issue or EFT effective date (BPR16) to reconcile to the deposit date. For example, a major government payer makes its deposit a few days after the EFT effective date in the 835 file, effectively throwing a kink in any reconciliation with finance if the EFT effective date is used as the “date of truth” from the payer. For these payers, examine the daily bank statement or another bank source to verify the actual deposit date.

835 electronic data interchange file and check: A notch below using an EFT, this method conducts a portion of its business electronically. Using the 835 typically will eliminate a user’s ability to select the transaction date when processing the file into the patient accounting system. It also contains the check issue or payment effective date. However, since users are receiving payments via check instead of EFT, there may be complications, such as payment delays.

The amount of risk depends on whether lockbox services are used. If the organization does not have a lockbox, the following dates (in addition to those involved with EFTs) must be considered:

• the date the check was received in-house;

• the date the check was received by the cash-posting team (Depending on the process, a mail sorter may stamp a date received before passing it on to the cash-posting team.);

• the date of the deposit slip used for the check; and

• the date of the actual deposit (This may vary from the date of the deposit slip.).

If there is a lockbox, the following dates must be considered: the date on the check, the date lockbox received the check, and the date a hard-copy image of the check was received.

Without a lockbox, organizations run the risk of misplacing or losing checks, making it advisable to enroll in an EFT payment program when possible.

Paper EOB and EFT: This combination is similar to using an 835 electronic data interchange file and a check, but it forfeits the ability to post electronically. Once again, lockbox use affects the noteworthy dates. Without a lockbox, organizations must be aware of the date on the paper EOB and the date the EOB was received by the cash-posting team. The presence of a lockbox requires attention to the following dates:

• the date on the paper EOB;

• the date the lockbox received the paper EOB; and

• the date the EOB was received by the cash-posting team or the date assigned to the EOB by the lockbox vendor if the service includes viewing images on the Web.

Organizations still receiving paper EOBs should consider transitioning to the 835. In fact, payers that do not offer the 835 are noncompliant. If an organization is not equipped to accept the 835 (it also technically would be out of compliance) but does have a lockbox, it should ask its lockbox vendor to convert EOBs to electronic images. This will shorten the time it takes for organizations to receive EOBs from the vendor and reduce the amount of paper the organization needs to maintain.

Paper EOB and check: The least efficient of all combinations, this scenario hinders an organization’s ability to maintain a healthy revenue cycle. For those unfortunate enough to be burdened with this setup, there are several dates to keep in mind when dealing without a lockbox:

• the date on the paper EOB;

• the date the EOB was received by the cash-posting team;

• the date the check was received in-house;

• the date the check was received by the cash-posting team;

• the date of the deposit slip used for the check; and

• the date of the actual deposit.

With a lockbox, consider the following dates:

• the date on the paper EOB;

• the date the lockbox received the paper EOB;

• the date the EOB was received by the cash-posting team or the date assigned to the EOB by your lockbox vendor if your service includes viewing images on the Web;

• the date on the check;

• the date the lockbox received the check; and

• the date a hard copy image of the check was received.

No matter the technology (or lack thereof) involved, determining an exact cash-posting date frequently is an inexact science. Ask an analyst or a cash-posting manager to run a report based on date parameters between X and Y, and there’s no guarantee the date of interest will be included.

In short, revenue cycle professionals may never know what they’ll get when they ask for a date.

— Sou Chon Young is a senior revenue cycle consultant at Hayes Management Consulting.