https://eminencercm.com/blogs/effective-tips-for-managing-accounts-receivable-in-healthcare
Medical billing complexity is a fact, and the constant need to strive for optimum reimbursement is real. Ensuring financial stability is a common goal of healthcare providers and practices.
Among various medical billing challenges, accounts receivable (AR) is known for disrupting a smooth revenue cycle. Only proper handling can counter the detrimental impact of mismanaging AR.
This blog is your guide to understanding the scope of accounts receivable in healthcare. Continue reading to know the core of AR and how you can progress in your medical billing process.
Decoding Accounts Receivable in Healthcare
Let's learn the basics so that it is easier to work through medical accounts receivable without any hassle.
Defining Accounts Receivable
When healthcare providers or practices render services to a patient but have not been paid for the services, the pending amount is known as accounts receivable.
It is the outstanding revenue that healthcare providers are yet to receive in return for their valuable services.
For Instance,
When a general surgeon performs an incision on a patient, he/she submits a claim for the same to the insurance company. If this amount (say $1500) will be considered accounts receivable until the insurance company pays the claim.
Important Role of Accounts Receivable Management in Medical Billing
The greater the gap between medical services and their revenue, the higher will be the healthcare provider’s setback. It is essential to keep the AR days less and get adequate compensation as soon as possible.
Accounts receivable management is vital to ensuring a smooth revenue flow in a healthcare practice. The financial health of a healthcare provider or a practice is highly dependent on AR.
The following points make AR management a crucial aspect of medical billing:
Better Operational Stability
Handling AR efficiently is directly related to a streamlined administrative process. It enhances the overall operational stability by ensuring timely reimbursement to healthcare providers.
On the contrary, a failure to manage AR can result in bad debts and revenue losses. In medical billing, the AR cycle is classified in 30-day intervals such as:
- 1-30 Days
- 31-60 Days
- 61-90 Days
- 91-120 Days
- 120+ Days
Keeping AR days as little as possible is highly recommended for all healthcare providers and practices. This is because, as the number of days increases, the chances of it becoming a bad debt enhance. The ideal AR cycle should be less than 35 days or within 30-90 days.
Effective Patient Care
Better operational management leads to reduced stress. Healthcare providers can stay assured about revenue. This allows them to be free from the workload and spend their time on patient care. It also promotes patient satisfaction and patient loyalty, as they don’t have to face any accounts receivable-related issues.
Improvement in Medical Billing
Keeping accounts receivable in check is good for the overall productivity of the administrative process. Along with revenue, healthcare providers can achieve compliance, avoid denials and maintain the cash flow.
Best Practices for Managing Accounts Receivable
Accounts receivable can decide the future of a healthcare provider or a practice. Making sure that it is handled properly is the responsibility of healthcare providers and practices.
Here are some tips to improve accounts receivable management:
Take Measures to Avoid Denials
Denials are a major reason for revenue delays. This highlights the need to run a productive denial management process. Healthcare providers can win half the battle if they take accurate measures to reclaim the lost revenue.
Just being proactive and refiling denied claims can help healthcare providers recover collections and eliminate accounts receivable. It is a great way to prevent AR and protect healthcare practices from bad debts.
Other than that, healthcare providers must lay double checks before submitting claims to stop denials beforehand. This can save healthcare providers from spending countless hours managing and rectifying denied claims.
Streamline Patient Payment Process
Accounts receivable is the result of payment delays. There are two cases: when revenue is due from the insurance company and when it is due from the patient. In case reimbursement is due to a patient, healthcare providers can introduce other patient payment processes.
Making payments convenient is the right way to streamline the collection process. This is suitable because not every patient is efficient with online or physical payment. Where youngsters prefer online modes, older people may prefer physical modes.
Ensuring prompt collections is a matter of timely and complete revenue. That is why making it easier is a perfect way to avoid accounts receivable in healthcare.
Plan to Handle Overdue Revenue
Accounts receivable in healthcare occur commonly and sometimes they are inevitable. That is why planning can save the day for healthcare providers and practices. Not having a strategy to handle medical accounts receivable can result in many invoices in the blink of an eye.
So, healthcare providers must stay ahead of the curve and decide everything. Healthcare providers can set reminders, plan on collecting debts on time and restore revenue.
Collecting overdue payments can become much simpler with a strategy placed accurately on the right spot. This way, healthcare providers can navigate through complex accounts receivable management with ease.
Make Use of the Technology
The reasons behind denials are errors and missing details at the time of documentation. Also, manual handling is the biggest cause of inaccuracies in the medical billing process, such as claim filing and submissions. Moreover, ensuring delay-free submissions is a hassle for healthcare providers.
Both situations result in denials that can further enhance AR. Thus, healthcare providers must choose technology to stay away from human mistakes. The technology efficiently manages all patient data while maintaining complete accuracy. It also streamlines the time factor and performs functions half of the time.
Using technology not only improves accounts receivable management but also enhances the entire medical billing process.
Focus on Keeping Patients Informed
Communicating with patients and keeping them aware of their financial responsibility is a good step towards avoiding AR. Healthcare providers must set policies regarding this and ensure that their patients are informed about their insurance policy and their payment obligations.
This practice can ensure timely revenue and uplift interaction, making patients more satisfied with medical services.
Actively Track AR Operation
There are three different types of AR, such as good, average and bad. If the AR cycle is 30 days or less, it is good. If it is between 40-50 days, it is average and if it is 60+ days then it is poor.
Accounts receivable tracking helps in attaining aging reports. It is a great tool for early detection of overdue collections. Healthcare providers can set aside some time regularly to review file claims and their due revenue.
It allows healthcare providers to identify good, average and poor accounts receivable. With this information, healthcare providers can take measures to make changes and improve the AR report. Tracking is an efficient way to learn from shortcomings and try to improve the situation for better results.
Outsource Medical Billing
Managing AR is a complex process and is the prime reason behind a healthcare provider’s stress. Outsourcing is an ideal approach to solving various medical billing challenges and acquiring adequate revenue.
Similarly, professional medical billers can handle accounts receivable efficiently without any burden. They can take care of the entire process, such as incorporating technology, tracking AR, preventing manual errors and simplifying the payment process.
As a result, healthcare providers can relax and devote all their focus to treating patients and improving the quality of care.
Why Choose Eminence RCM as Your Outsourcing Partner
Outsourcing can solve many problems and help healthcare providers and practices in working through complex accounts receivable.
Eminence RCM is a medical company providing valuable medical billing services to various clients over the years. We have hands on experience in dealing with complex scenarios and finding the best solutions to maximize revenue.
Dealing with AR is not a problem for us, we ensure timely tracking of AR and taking measures to correct them. Our team of qualified coders and billers ensures an error-free medical billing process to avoid denials and revenue leakages.
We ensure complete regulatory compliance to protect sensitive patient data from misuse. Our team is proficient and makes use of advanced technology to save and record data.
Maximize your revenue, avoid complex accounts receivable and enhance operational efficiency with Eminence RCM!
