ICD-10 has one foot inside your agency’s door. ICD-10 is literally here but the impact is yet to be known. Sure, there are surveys and assumptions as to what could happen, but we don’t know for sure.
For instance, will claims really be processing as easily as they were during testing? We have been testing system and software readiness for three years, but when the actual go live occurs on October 1st, will it really work? We just don’t know. However, there are some ways to keep your agency going and to protect your agency.
Accounts Receivable and Collections: If you have A/R outstanding in FISS (Medicare DDE) or with private insurers, we recommend you have staff start making collections a priority. Review balances and claims daily. Don’t take excuses and don’t let your billing staff hold your money hostage. Also, don’t let Medicare, Medicaid, or private insurers hold your money hostage. Billers must be able to maneuver within FISS DDE. While the system itself is archaic, it is the best way to resolve claims stuck in a suspended status. A good biller will be able to review all of these claims – RAPs and Final EOEs – and quickly determine which can be manually corrected and processed. This should be done daily as a best practice – without exception!
Vendors: Ask vendors for temporary extensions of payment terms. For instance, if you normally have terms for medical supplies with net 30, you might be able to have those terms pushed out to net 45 or even net 60 from invoicing date. Likely if your agency hasn’t had any issues in the past with paying timely, a temporary extension of terms shouldn’t be a problem. However, if you have a history of not paying on time, the possibility of your receiving a temporary credit extension isn’t likely.
Line of Credit: If you have a line of credit, making sure your agency has access during the next one to two months will be important. You should check now with your bank’s loan officers to review if access is available, what might be needed to reinstate a lapsed line of credit, or if you could potentially get an increase. For an agency without a line of credit, you might be able to quickly obtain one, depending on how well your bank’s lending department is organized, but also if your agency’s financial statements are accurate and present an accurate standing of your agency. Agencies that do have positive cash flow and strong profit margins are going to be much more likely to obtain a line of credit or obtain a line of credit increase than those with sustained loses.
Items that must be paid on time, even though your cash flow might be suffering, include payroll – your employees, and payroll taxes. The IRS will not grant your agency a grace period on timely remittance of payroll taxes. However, if you use an outside payroll service, you might be able to get a slight reprieve. Depending on how your state’s withholding and unemployment insurance remittance requirements operate, you could hold off on these payments. You have to check very carefully to make sure you aren’t violating any timely deposits. For instance, if you use a payroll service that pays all of your federal, state and unemployment taxes each payroll cycle, you could have the payroll service only pay the federal payroll taxes. The downside is you will need to pay a larger amount at the end of the quarter or month, depending on your state’s withholding and unemployment insurance filing requirements.