Why healthcare accounts receivable follow-up is important for your medical practice
You provide the service, submit the claim, and payers pay you. Right? Not necessarily. There are all kinds of potential hiccups in the revenue cycle management process that delay payment. That’s why accounts receivable (A/R) follow-up is so important. It’s about circling back to what you’re owed and whether you received it. If you didn’t, A/R follow-up is the first step in figuring out the ‘why.’ A/R follow-up is critical because it:
Promotes financial stability. A shorter A/R cycle helps you maintain a positive cashflow and steady supply of revenue to cover medical practice expenses while simultaneously providing high-quality patient care.
Helps recover overdue payments. In the absence of following up, overdue payments can fall completely under the radar and lead to missed revenue opportunities. A/R follow-up helps you track outstanding accounts and implement solutions to secure payment and improve healthcare accounts receivable management.
Enables root cause analyses of payment problems. When you monitor A/R closely, you’re better able to detect problems earlier in the process. For example, you can more quickly identify payment delays that occur on the front end because of a claim scrubber edit or at the clearinghouse level. In some cases, you may need to provide additional information so payment can be made. Without a process for A/R follow-up, you might not ever know these problems exist—or you’d find out long after you’ve surpassed timely filing limitations.
How to improve healthcare accounts receivable management
What are some best practice strategies for improving accounts receivable in healthcare? Consider the following:
1. Generate an aging A/R report. An aging report provides information about specific receivables based on the age of the invoices. What accounts are delinquent and for how long? Do you notice a pattern with habitually late payers or with certain services you provide? What is your bad debt? What is your projected upcoming cashflow? Keep in mind that if your aging A/R report shows a lot of older receivables, it probably means your collection practices could use a boost.
2. Know your average days in A/R. What is your accounts receivable cycle in healthcare today, and what would you like it to be? What steps will you take to get there? Monitoring this and other revenue cycle key performance metrics will be important as you strive to move the needle on revenue cycle management.
3. Leverage technology. Integrated real-time eligibility checks and electronic remittance advice are paramount. However, so is end-to-end claim tracking built directly into the practice’s workflow. In addition, on-demand access to practice financials and advanced financial analysis tools help you stay in control and better manage the accounts receivable cycle in healthcare. edgeMED customers, for example, are often able to reduce their days in A/R by more than a month (i.e., 38.2 days). This increased cashflow can be a game changer for all medical practices and especially those that are struggling financially or on the cusp of making significant operational changes or financial decisions (e.g., capital investments, mergers, or acquisitions).
4. Focus on patient engagement. Outstanding A/R isn’t only about delinquent payments from payers—it includes the unpaid patient financial responsibility as well. Having the right tools and resources in place to guide patients on their financial journey is critical. This includes the ability to send patient statements via mail, email, and text message in a preset schedule until payment is received. It also includes the ability for patients to pay their bills online.
5. Hire experienced medical billers. Today’s medical practices need experienced staff who are well-versed in healthcare accounts receivable management, including A/R follow-up. When it’s difficult to recruit and retain qualified staff, it may be necessary to explore revenue cycle management outsourcing options—particularly for core functions like medical billing and collections. Choosing the right business partner for medical billing and coding services can help your practice maximize revenue and reduce expenses.
Conclusion
A/R follow-up is an important aspect of improving accounts receivable in healthcare. It helps today’s medical practices improve cashflow and promote short- and long-term financial stability. It’s about getting a handle on your payments or lack thereof and digging into the root causes of delays. You provide high-quality, timely services—you owe it to yourself to get paid appropriately and on time as well. Learn how edgeMED can help and be sure to check the Healthy Snacks blog for more expert insights, best practices and industry trends.
