Medical accounts receivable is the payment that is to be recovered for treatments and services provided by healthcare providers. It is the line of credit extended by the practice for its services. The money is owed either by the insurance company or patient. It is critical for revenue cycle efficiency, because the longer the money remains unrecovered, the less likely are the chances for healthcare providers to receive payment. On an average, after 120 days, a healthcare provider can expect to recover only ten cents per dollar.
Needless to say, healthcare providers must be highly efficient in managing their accounts receivable process. This one area of medical service has a huge bearing on cash inflow and revenue cycle management process. This can lead to a host of other issues like slow payment processing, improper invoicing and billing, wrong book-keeping, excessive follow ups, inconsistency in opening balances, bad debts and so on.
The steps involved in account receivable services may vary for different practices. Larger clinics and hospitals have a larger cash flow and hence, larger impact on their revenue cycle. In this blog we look at the various ways in which accounts receivable services can streamlined and made more efficient.
Analyze Your Accounts Receivable (AR) In Detail
Regular analysis of your accounts receivable plays an important role in keeping your medical accounts receivables on the right track. The analysis needs to be carried out keeping certain aspects in mind. These include keeping a count of the “days in AR” and the aging bucket. The average days in AR will give you an idea of the number of days needed to collect the outstanding. The aging bucket entails bracketing the receivable in terms of age such as receivable that are 0-30days old, 31-60days old, and 61-90days old. This will enable you to track receivables with older bills in a more organized manner.
Prioritize Insurance Eligibility Verification
An easy way to keep a check on growing accounts receivables is to have control over the insurance verification process. If insurance verification says there is no coverage, you need to collect money from the patient in advance. Therefore, if your insurance verification goes wrong, and the treatment stands meted out, then the payment moves into the accounts receivable section. The best way to make insurance verification fool proof is to make use of software and third-party support. You always need to cross-verify important things like coverage date, co-pay amount, in-network and out of network coverage, how much of the deductible amount has been consumed and so on.
Identify the Denial Reasons
It is commonly believed that identifying the reasons for denial after the denial is like bolting the stable after the horse has escaped. To an extent this may be true, but yet a post-denial analysis always helps in keeping accounts receivables at check. The analysis can throw light in what is going wrong and what needs to be changed immediately. Once the change is brought about, it stops accounts receivables from growing. There have instances of denials happening for reasons such as incorrect patient information, claims duplication, pre-authorization errors, charge entry mistakes, credentialing errors, lack of documentation etc. Knowing them can help you avoid a repeat and in the process nip account receivables from creeping up.
Set Payment Expectations and Collect Patient Portions Promptly
A proven way to stop accounts receivables from growing is getting things right from the word go. This can best be done by telling patients upfront about their financial responsibility before their scheduled visits and collect them no sooner than they walk in. This way you stop revenue from walking out of the door and into the receivable books. According to stats, when collection is not done upfront there is 30% chances of not recovering the amount in future. Collecting payments upfront brings one portion of the AR cycle to an end. It also eases tracking efforts in the later stages of the AR cycle. Sometimes, patients may not be in a position to cover the entire bills after receiving care. In such cases providers must offer them partial payment plans. This will lock up some reimbursement and ease the burden of receivables.
Charge Entry
Charge entry is not directly related to accounts receivable management, yet it has a direct impact on it. In medical billing, charge entry is the process that clinicians follow to submit lists of the services patients receive. This list gets coded for claims submission. Inaccurate charge entry leads to inaccurate coding and culminates in denial of pays. The due payment then moves into the account receivable logbook. On an average about 1% of net charges are captured incorrectly due to inconsistency between charge entry and coding. For large hospitals with a huge annual revenue this can be a huge figure. Sometimes the mismatch can invite audits especially when it ends up in overcharging the payors. This can lead to penalties.
Claims Submission
After capturing and coding charges, claims need to be submitted to payors for payment collections. An error in this stage can push a claim to account receivables. Apart from coding errors, there is one more kind of error very common in this stage. This is errors happening due to presence of more than one insurance coverage. This can lead to a host of issues like the supplemental insurer not receiving the correct bill from Medicare leading to non-issuance of payments, patient collection not covered by Medicare and so on.
Outsourcing Account Receivable Management
The most proven way of streamlining accounts receivable management services is outsourcing the service. By outsourcing, it is possible to get access to a team of accounts receivable experts whose exposure to the field has equipped them with the knowledge and skill to manage accounts receivable services with great efficiency. The biggest advantage of hiring a third-party partner for accounts receivable medical billing is that they address the core issues like unpaid claims, denied claims and low paid claims. This helps to keep accounts receivable number under check and also cash flow consistent. As an extra benefit, they assist you in spotting perennial issues like coding errors, billing mismatch and operational cost.
Conclusion
As outsourcing helps you handle all aspects integral to accounts receivables management services, it makes perfect sense to outsource accounts receivable medical billing to offshore partner. However, when it comes to choosing a partner, you need to be careful. Evaluate their process, staff, technology and achievements. This way you can partner with the right company and fool proof your accounts receivable management services.
Who We Are and What Makes Us an Expert?
This article is brought to you by MedBilling Experts. We are an expert back-office support provider for a range of medical service requirements. These include medical claims management, medical billing, medical coding revenue cycle management etc. One of our areas of specialization is medical accounts receivable services. We have developed a process that improve your collection rates and guarantee quicker processing.
