When your healthcare facility faces a delay in revenue, it can bring forth a big setback for you. To counter this problem, there are ways to improve accounts receivable. Let’s look closely at all that you need to keep in mind for your medical practice, and the remedies to deal with account receivable delays.
Account Receivable and Medical Billing
When a patient receives a service from a medical provider, they are billed for it under medical billing. The amount which is owed to the provider is realized as accounts receivable (AR). There are a few different ways to measure AR. It is usually through the ‘’Days of AR’’ which is calculated by dividing AR by the average daily charges. Practices prefer to classify the accounts by their age, for example, 1 – 30 days since billed, 31 to 60 days till billed, and so on.
The longer a patient doesn’t pay for the services, the more likely it is that they won’t pay at all. This is the reason why AR is not seen as revenue, even though it is essentially the money that is owed. When ARs are not managed in a prompt manner, they could overburden the healthcare facility and its financial department. This results in decreased revenue and increased cost for the practice overall.
Improve your Accounts Receivable
- Communication with Patients
Medical providers who have jotted down set rules and terms for AR are less likely to face delays in payment. In most cases, a practice can ensure payment by maintaining transparent communication with the patient before they receive their service. When a provider asks the patient to sign a document that entails payment expectations, they are most likely to pay upfront.
- Frequent follow-ups on AR
Late payments are a reality in the healthcare industry. However, to constructively proceed with a situation like this, it must get managed efficiently. Among all practices, about 1.5% of the revenue is labeled as bad debt. When outstanding accounts are left untouched and not looked into, they go unpaid. Practices must ensure frequent and regular reminders are being sent out to the patients. Some accounts require to be pursued more aggressively which means the provider should seek a collection agency.
- AR Reports
The primary goal should be to keep the ‘’AR days’’ to a minimum. This would entail a close check on the accounts and an analysis of the data every month. The AR reports should consist of:
- AR cycles
- The delay between invoicing and services
- Aging accounts
- How much collection has been made
- Emphasis on in-office payments
Ensuring that the patients pay for bills or copays in the facility would cut down on accounts receivable for the practice. Some providers would require a certain amount of payment or deposit up front for particular procedures or services. This process may not help eliminate ARs but it helps contain some revenue during the process.
- Outsource Medical Billing
Accurate medical billing is essential in maintaining AR days at a low rate. Something as minor as a claim error can result in delays in payments by weeks. If the in-house team is swamped with other tasks and is unable to keep up with the AR, then the best solution is to hire a team of professionals. With an outsourced medical billing team, you can expect them to be equipped with the knowledge and the latest technologies to maintain everything in order.
- Quick and frequent billing cycles
The faster a practice bills the patient, the quicker the bill gets paid. Many providers would send out invoices every month, which can create a bundle of payment delays. To make this process smoother, a medical practice must consider generating bills when the service is being provided or every week.
- AR Automation
Automating AR manages time effectively by handling the larger AR tasks first. Some programs can make this automation a possibility. They take care of tasks like managing claims, verifications, and creating reports. This enables a practice to generate invoices in a timely fashion and collect remaining payments. It also reduces the burden of overlooked denial claims.
With just a few calculated strategies, your medical practice can manage the Account Receivables effectively. At the end of the day, even a healthcare practice is a business and requires revenue to run operations as smoothly as possible. Employing the right tactics and training your staff to be more diligent in this department will greatly enhance your revenue and practice.