Healthcare organizations lose 5–15% of their yearly revenue because of poor accounts receivable (AR) management. A survey by the MGMA shows that, on average, 13.54% of AR is over 120 days old. Now you should know what healthcare accounts receivable management is, why it is essential for your RCM process, and the three vital stages of efficient AR management.
Know what healthcare accounts receivable management is:
Accounts receivable (AR) management in healthcare means diligently tracking and collecting payments from patients and their insurance companies for the provided services. If your average AR is 60 days, it takes two months to get paid. But AR days should stay below 25 days. When payments are delayed for months, it's called aging AR, and it affects your cash flow. AR management helps by handling the full revenue cycle—checking insurance, sending claims, managing denials, following up on unpaid claims, and collecting patient balances.
Now, you need to understand the reasons why AR management is always important for the success of your overall revenue cycle management.
The importance of healthcare accounts receivable management:
AR management plays a key role in your revenue cycle management as it always makes your financial foundation stronger by ensuring a strong cash flow. A robust financial foundation always helps you to pay staff members, buy medical supplies, and invest in financial growth without any struggle. It also plays a big role in increasing revenue. By tracking claims and making sure payments are collected on time, it prevents revenue loss and reduces write-offs. In fact, strong AR management can keep claim denials below 5%. It also improves patient satisfaction. Clear and accurate billing, fast responses, and easy payment options matter to patients, as 69% of them say they would switch providers for a better experience. AR management also helps you stay compliant. It reduces the risk of penalties by making sure claims follow the right rules and are submitted correctly.
The good thing is that you can still implement perfect AR management. Wondering how? Just follow the tips mentioned below-
Effective tips to handle healthcare accounts receivable management:
Insurance eligibility verification of a patient:
You should always check a patient's insurance before providing any service to avoid claims rejection. A proper method of insurance verification always helps you receive payments on time.
Accurate coding:
Accurate coding helps you get paid on time. Coding mistakes can cause claim denials and delay payments. You need certified coders as they always stay on top of all the latest coding guidelines.
Claims submission on time:
You need to leverage an efficient mechanism to track claims so that you can send invoices on time and get payments promptly. You will always face slow payments and more denials because of submitting claims late.
Follow up on outstanding claims and monitoring denials:
Monitoring denials and appeals is important to find out why claims are being denied. Healthcare providers should track both carefully. It helps spot patterns and understand the root cause. By analyzing this data, they can fix problems faster. This reduces future denials and makes the revenue cycle process more efficient.
The reality is that most healthcare providers often lack an efficient team to handle their delinquent accounts, and that's why they always prefer to hire a professional healthcare accounts receivable management service partner.
A professional AR management service always follows the three crucial steps for handling delinquent accounts. The following are the steps.
Vital steps followed by a professional healthcare accounts receivable management company:
Reaching out to payers regarding the status of submitted claims:
Reaching out to payers about submitted claims is a key part of AR management. It helps find out if the claim was received, processed, or denied. Quick follow-ups reduce delays. It also helps fix errors early. Regular communication with payers speeds up payments and improves overall cash flow for your practice.
Analysis of denials:
Denial analysis is one of the critical steps in AR management, as it enables you to know why claims were rejected. Some of the common issues behind claim denials are coding errors, missing information, or late claims submission. You can always fix issues and avoid potential denials by understanding these patterns, and reduce overall write-offs with a better chance of getting paid faster.
Following up on denials, underpayments, and appeals till closure:
Following up on denials, underpayments, and appeals is a key part of AR management. A professional company uses different methods to make sure every claim is resolved. Online claims follow-up helps check claim status through insurance websites and payer portals. Automated IVR systems allow a professional AR company to call payers and get quick updates on unpaid claims. If these don't give enough information, you need to speak directly to a live insurance representative for detailed answers. Denied claims are corrected and resubmitted. Underpayments are reviewed and disputed.
Now that you might have understood how a professional healthcare accounts receivable management partner can help you, it's time to hire the right partner. A professional company always enables you to enjoy a 30% immediate recovery in AR within a month at a minimal percentage of the overall collection.
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