How to Receive Maximum Value of Your Accounts Receivable?

accounts receivable
August 2, 2018

Posted by MedbillingExperts / 0 Comment

Did you know that your accounts receivable loose significant value over time? By the time receivables are 90 days overdue, they could be worth only 20% of their original value; and only 5% of value when they cross 120 days mark, as illustrated below:

Not only is value lost on the money owed, but overburdened AR departments can cost your healthcare organizations in other ways. Increased workload, reduced productivity and improper cash flow to name few.

How is the Industry Faring?

Average Accounts Receivable Days: 48.4 days

AR days among the insurers: 52.2 to 67.7 days

The average accounts receivables among hospitals in the US is 48.4 days. While the AR days among the insurers ranged from 52.2 to 67.7 days, according to Crowe Revenue Cycle Analytics.

Where Do You Stand?

30 days or less — High performing Medical Billing Department

40-50 days — Average performing Medical Billing Department

60 days or more — Below Average Medical Billing Department

Do the evaluation and see where do you stand. If your AR days are less than 30 days, you are doing exceptionally well. If your AR days is between 40-50 days, there are still areas to improvement and if your AR days is above 60 days or more, then it is time to revamp your AR process.

Read Our Case Study About  Optimizing AR Management Process for a Renowned Billing Company

How to Drive Down Accounts Receivable Days?

Analyze Your AR in Detail

The first step for reducing AR days starts with a thorough analysis of your starting point. But you can’t just look at your receivables as one massive AR. You need to break it down into patient AR and insurance accounts receivable and view them separately to get to the core reason for poor performance.

For instance, if you note that your patient AR is mounting quickly, it could be a sign that there are deficiencies in your front-desk processes or in the way your employees communicate your financial policy with the patients. On the other hand, declining performance on the insurance side, could be a sign of errors at the front-desk, or point to a larger issue related to the in-house or third-party billing function.

Accounts receivable services

Prioritize Insurance Verification

Improper patient eligibility and benefits verification is the starting point of AR mismanagement among many providers. Hence make sure that you are checking insurance eligibility well in advance, or you risk falling into the spiral of massive amount of back-end work to resolve open AR or open claims.

In case you are one of those practices that do not have sufficient staff to adequately verify benefits and educate patients, you can opt for the services to latest automation tools which can be readily integrated into practice management system, and quickly get information related to whether the patient has coverage, how much of the deductible has been used up or even if the policy is in danger of suspension due to non-payment of premiums. There is also the option of using third-party verification services to completely take this load off your shoulders and help you concentrate on your core competency.

Focus on Documentation and Coding

Yes, documentation and coding are never the first priority for physicians. They want to see patients, not concentrate on documentation or focus on learning all the coding rules and regulations. But at the end of the day it’s the physician who is responsible. If there’s evidence of fraudulent billing, it’s not going to come back to the medical billing company. It’s going to come back to the physician.

You’ll be amazed at the amount of reimbursement that you’ll be able to collect by getting these two aspects right. Also focusing on getting these two elements right will help you speed up the billing cycle, which increases the likelihood of patients paying their balances.

Engage Patients

Be proactive, engage the patients early and set expectations so that a bill or request for payment will not come as a surprise.

This step doesn’t stop with providing patients with your payment policy or reminding them of their balances. It also means giving patients easy ways to connect with the practice and pay their bills.

Beware of Transition and Consolidation Caveats

Patient engagement and accessibility are particularly important when a practice is going through a transition such as moving to a new EHR or a billing system, which can often results in billing delays, leading to issues which can sour a patient’s relationship with your practice. Hence always keep the patients in loop and clearly communicate about any changes or updates that are happening to head off problems.

Follow the Golden Rule

Regardless of your practice structure, make sure that you follow the credo of, “Whoever enters the data owns the data.”

For instance, consider a scenario wherein a claim comes back denied due to incorrect subscriber ID. The above-mentioned philosophy would be at work, if instead of taking the seemingly quickest route of fixing the error at the back-end and resubmitting, you opt to send the claim back to the employee who made the mistake and ask him to fix it.

Conclusion

As AR days reaches the point of no return, practices need to implement strategies and processes which ensures that you recover cash quickly and work rigorously on aging receivables. Whichever road you opt to take during this AR turnaround attempt, make sure that you plan properly and allocate appropriate resources to maximize performance.

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