Every healthcare provider puts their heart, time, and educational training into caring for patients every single day, and it's only right for them to get paid for the services they provide. After all, getting paid is all about identifying their value and running their practice successfully.
So, how can healthcare providers achieve this without reducing the time they spend focusing on their patient care? One of the ways is by ensuring the days of accounts receivable are very few.
Reducing the number of days, it takes for patients to pay for accounts receivable is a crucial process every healthcare provider needs to ensure their cash flow is consistent and smooth.
Although this is a tough challenge, it is essential, as timely and efficient bill payment is fundamental to maintaining the revenue growth of any medical practice. It also gives complete insight into the finances of the practice and where the workflow should be more effective.
In this blog, we will break down common reasons accounts receivable in medical billing struggle and best practices you can implement to boost collections.
Account Receivables in Medical Billing Explained
Accounts Receivable in medical billing is the process whereby healthcare providers wait to collect payment for the services they’ve already delivered to patients. After treating a patient, the healthcare professional submits a medical claim and waits to be reimbursed by the insurance company and sometimes balanced by the patient.
When the payment is not made immediately, it is referred to as "Accounts Receivable."
Managing AR effectively involves taking some of the following steps:
- Regularly tracking unpaid claims
- Resubmitting denied claims
- Contacting the insurance companies
- Messaging or calling patients for payments
- Setting up payment plans
The goal of implementing this strategy is to reduce the number of days a claim remains unpaid, known as "Days in AR," and ensure the provider gets paid as quickly and accurately as possible.
What is the Right Number of A/R Days?
Days in Accounts Receivable is simply how long it takes for a healthcare provider to get paid after they treat a patient.The payment could come from insurance companies, government programs like Medicare or Medicaid, or directly from patients.
The number of A/R Days is different from one provider to another because of the type of practice, billing complexities, and the patient mix. But according to industry standards, it should be approximately 30 to 40 days.
If your A/R Days number is below 30, it shows fast and efficient collections. Above 50 or 60 is a sign of billing issues, claim denials, or poor follow-up procedures.
What Makes A/R Management So Important for Healthcare Providers?
In an industry where getting reimbursed is not always as quick or easy as it should be, Accounts Receivable management ensures healthcare providers improve their revenue cycle flows.
Every time a payment is delayed, it disrupts the cash flow of a healthcare provider and affects their ability to continue providing quality care. It also slows everything down and puts pressure on the provider’s finances.
That’s why AR management is so important. When it’s done right, it leads to:
- Faster Payment Collections: Healthcare providers are reimbursed faster, improving their revenue flow.
- Fewer Claim Denials: By detecting errors in medical claims before submitting, and following up on issues, more claims get approved the first time.
- Better Cash Flow: With faster reimbursement, providers streamline their practice without any problems.
- A Stronger Financial Position: The practice's finances grow and care for more patients.
A good AR management ensures healthcare providers are paid quickly for the care they provide, without having to fight for every dollar.
How to Improve Medical Billing A/R
Let’s take a detailed look at the steps you can take to ensure your days of accounts receivable are shorter and your practice gets paid faster.
- Submit Clean Claims
One of the most common reasons payments are delayed in medical claims is errors. These mistakes can be as simple as a typographical error in the patient’s name or a very complex situation, such as using the right medical code.
If your claims are inaccurate or incomplete, they may be denied or rejected by the insurance company. This means your staff has to correct and resubmit them, which takes extra time and effort, causing more delays in your payments. Always double-check patient information before submitting a claim and ensure that the correct medical codes are used.
- Have a Consistent Follow-Up Process
After you send a claim to the insurance company, they might attend to it immediately. Sometimes, they may forget about it or take a long time to process it. Following up with the insurance company is an important step that helps prevent unnecessary delays or potential revenue loss.
When practicing follow-up with every medical claim, there is a higher chance of receiving reimbursement on time. You can also use billing software to track the status of every claim to submit an appeal in case of any denial.
- Track A/R Days and Reports
A/R days tell you how many days, on average, it takes to get paid after submitting a medical claim. When you have longer A/R days, it affects your cash flow, slowing down your revenue cycle.
Tracking this number helps practices understand how quickly they are paid. It also shows how your billing process is performing and the areas that need improvement.
- Handle Denials and Rejections Immediately
Even when a clean claim is submitted, the practice claim can still get denied because of changes in the insurance policy, coding updates, or missing information. When an appeal is not submitted within the given timeframe, it can lead to a loss of revenue.
By creating a denial management process to review, correct the issue quickly, and resubmit corrected claims, it improves the chances of collecting payments.
- Improve Patient Collections
Sometimes, part of the payment, such as copayments and deductibles, or services not covered by insurance; are received from the patient. Collecting this money can be difficult if patients don’t understand their bills or have limited payment options, increasing your A/R days.
You can avoid this by telling the patient about their payment responsibilities before offering the services they need. Providing flexible payment options such as online portals, credit/debit cards, and payment plans also enables patients to complete their payment without any burden.
- Consider Outsourcing to Medical Billing Company
If you are constantly facing claim denial and delays in payments, outsourcing to a medical billing company might be the best solution.
This allows you to hand over your billing tasks to experienced professionals who specialize in handling claims, denials, and follow-ups. They have trained billing experts, advanced software, and strong payer relationships that will speed up collections and lower A/R.
The Final Thought
By keeping a close eye on your A/R and taking the right steps to improve it, you can shorten the payment cycle and keep your revenue flowing smoothly. As demand for better medical care increases, providers are constantly experiencing burnout, making them choose to outsource their A/R.
At Eminence RCM, a medical billing company in US provide solutions to all your billing complexities, and our team can handle every aspect of your practice A/R. Our team of dedicated experts, Eminence RCM, makes your billing process run smoothly while reducing your A/R days.
With our services, healthcare providers are able to increase collections and minimize claim denials through smart, efficient, and transparent billing practices. So, contact us today and experience the best in billing services.
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