How to manage accounts receivables for medical practices in 2024 and beyond
Your patient schedule is packed, and business is booming. So why does your medical practice continually struggle with finances and profitability? Although there could be many reasons, here’s one of the most common: A poorly managed accounts receivable medical billing process.
What is medical accounts receivable?
Accounts receivable for medical practices—sometimes referred to as healthcare A/R—refers to the total amount of money patients, payers, or both owe you. In healthcare, there’s always a lag between the time you render services and when you’re ultimately paid. However, the goal is to shorten that time—to strive for the lowest days in A/R. Otherwise, ongoing expenses will continually outweigh profits, and it will be nearly impossible to get ahead and promote financial sustainability.
Why does the metric ‘days in A/R’ matter? Here are five reasons:
It ensures steady cashflow, so you have money when you need it most.
It supports strategic growth and investments.
It reduces costly rework.
Why and how to manage accounts receivables in your medical practice
Identifying best practice strategies for how to manage accounts receivables is particularly important as medical practices approach the New Year—a time when healthcare deductibles reset. Patient accounts receivable challenges tend to arise when patients are on the hook for larger portions of their healthcare bills. For many patients, a healthcare deductible reset means owing your medical practice hundreds of dollars instead of a nominal copayment for a single visit. This time of the year is equally challenging for healthcare payers trying to process claims and coordinate new health insurance benefits.
Ways to improve accounts receivable in healthcare
The good news is that there are many ways to improve accounts receivable. You can take a proactive approach to address potential challenges. Here are a few strategies to try:
1. Outline clear billing procedures. You can’t improve the accounts receivable medical billing process if you don’t set clear expectations from the get-go. This includes expectations for your own internal staff as well as external vendor partners. For example, your billing procedures should address these important questions: Will you require up-front patient collections? If so, how? Will you collect a flat amount? Percentage of anticipated fees? What if patients refuse? Will you continue to see patients with an unpaid balance after a certain period? What is the turnaround time for claim submission? Within how many days will staff follow up with payers regarding unpaid claims? Assemble the entire revenue cycle team to brainstorm questions and scenarios that your billing policy should address.
2. Make it easy for patients to pay. The premise is simple: The easier you make the entire payment process, the more likely patients will pay. This includes online bill pay through the patient portal. Ensure the portal is intuitive and your patient statements are timely, clear, and concise.
3. Consider outsourcing healthcare accounts receivable management. As medical practices nationwide continue to struggle with healthcare staffing shortages, now is the time to determine whether you might need to outsource all or a portion of accounts receivable management to follow up with payer networks and patients. A dedicated team can decrease the number of days in A/R and improve overall cashflow.
4. Generate clean claims. ‘Clean’ claims refer to those without error that healthcare payers pay in full and on time. This is the goal because it enhances cashflow and mitigates risk. To promote clean claims, medical practices must ensure accurate demographic and insurance information. Check-in kiosks and mobile patient check-in help significantly by reducing manual errors and omissions. When patients enter their own data, that data tends to be more accurate and complete. To ensure clean claims, medical practices must also follow all payer requirements. This is where built-in claim scrubbers and billing edits can help. When was the last time you reviewed these edits based on previous denials to ensure you maximize the technology?
5. Improve the overall patient experience. When patients are dissatisfied with the overall quality of the service they receive at your medical practice, paying you probably isn’t going to be a top priority. That’s why taking the time to think through ways to improve the clinical experience is so important. It has a direct impact on accounts receivable and finances. For example, does your medical practice provide culturally competent care? Have you taken steps to reduce wait times? Provide patient-centered resources? Do physicians and staff respond to patient portal messages in a timely and compassionate manner?
6. Track healthcare claims closely. When it comes to improving healthcare payer accounts receivable, tracking claims is key. You should have a good handle on where your claims are in the claims adjudication process at all times. Real-time visibility into claim status along with end-to-end claim tracking ensures payments don’t fall through the cracks. It also promotes timely intervention when issues arise.
Conclusion
Accounts receivable management should always be a priority but especially in the beginning of the year when healthcare deductibles reset. Taking proactive steps can help medical practices maintain a healthy bottom line. Learn how edgeMED can help and be sure to check the Healthy Snacks blog for more expert insights, best practices and industry trends.
