Accounts Receivables Services
Accounts Receivables Services
Accounts Receivable Services is the management of payments due by the insurance and patients to the physician for the services provided. It is crucial to manage the due payments and balances on time to avoid financial downfalls from revenue loss.
What is Account receivable?
Accounts receivable (AR) is the revenue that you have billed for but have not yet collected. Its money owed to you. AR consists of any amounts due from patients, insurance companies or other guarantors.
Why Outsource Accounts Receivables Services?
Accounts receivables include the management of many reports dealing with insurance, collection analysis, write-offs, bad debt reviews, and ratio analysis. Outstanding claims and delayed collections often place added administrative strain on healthcare organizations. Additionally, federal regulations have become increasingly more stringent. This increases the pressure on healthcare organizations to follow up on denied or appealed claims. The main reasons for claims denials are incorrect/incomplete data entry and incorrect medical coding.
How to Tackle the AR Backlogs?
- Analyze and identify AR backlog by aging buckets.
- Start working on the older claims to clear them off with maximum reimbursement.
- Simultaneously keep working on clearing the day-to-day denials to avoid further heaps of backlogs.
- Engage a standalone team or staff to work on AR Management and ensure cash flow.
- Outsource to an AR Expert to have stress-free and lucrative support.
Challenges of Accounts Receivable Medical Billing
The distinct demands of accounts receivable in healthcare result in some key challenges, all of which can significantly impact cash flow:
- Challenges of Accounts Receivable Medical Billing
Insurance companies frequently and purposely make it difficult to receive payment by denying insurance claims for myriad reasons. Insurance companies run for-profit operations, meaning it financially benefits an insurance organization not to accept a claim. Some common explanations for claim denial are missing information, late filing, lost claims, duplicate submissions, and coding errors. This is also the main reason for aged accounts receivable in the healthcare space, as an insurance company’s inability or unwillingness to accept a claim often leads to outstanding payments.
- Bad Debts
The healthcare landscape is constantly changing, and patients consistently pay more due to higher deductible plans and increasing patient costs. In fact, 74% of medical providers have reported an increased financial burden on patients. And this elevated responsibility leads to a higher number of bad debts, which are bills that patients never end up paying.
- Unwarranted Write-offs
Unwarranted write-offs are considered “forgiveness” of a customer’s debt without payment. But write-offs-even the seemingly inconsequential ones—have a concerning impact on your bottom line, so you should avoid them as much as possible. Write-offs can especially become a larger issue for companies with a manual collection process, as details tend to fall through the cracks, causing unpaid balances to accumulate.
- A Disorganized Collection Process
As is the case for any business, it’s absolutely crucial for medical practices to receive payment in order to continue functioning. While it’s a delicate process, expenses for care should be clearly discussed and disclosed to patients at the time of service, whenever possible. Fortunately, there are some helpful steps for making the collections process a bit easier.
- Invoice Quickly
- Break Up Your Invoices
- Send Clear, Easy-to-Understand Invoices
- Simplify the Payment Process
- Establish Good Relationships with Your Clients
- Send Payment Reminders
- Follow up with Delinquent Accounts
- Get It in Writing
- Incentivize Early Payments
- Work with Clients Who Are Struggling to Pay
- Don’t Move to Collections First
- Handling Clients Who Frequently Pay Late
- Automate Your Accounts Receivable Systems
- Restrictive Modes of Payment
It’s important to accept a variety of payment methods in order to better meet the needs of your customers. Failure to do so puts your organization at a severe competitive disadvantage, as patients will likely seek services from a provider who offers more flexibility.
It’s equally crucial to gather patient information, like payment needs, too. This sets both patient interactions and billing transactions up for success moving forward, but can be cumbersome and time-consuming if you’re still using manual processes and systems to do so. And without tools that make it easy to capture this information, you risk claims rejections and denials down the line, which delay bill payment and affect liquidity
- Best Practices for Managing Medical Accounts Receivable
- Nurture Patient Relationships and Inform Them about Financial Responsibilities
- Collect Payment at the Time of Service
- Pull an AR Aging Report
- Collect Payment at the Time of Service
- Hire Experienced Employees
- Check In with Patients and Insurance Providers
- Collect Patient Information (in an Automated System)
- Automate Your AR Workflow