Medical Accounts Receivable

Optimize your Medical Accounts Receivable & Cash Flow:

Introduction: Improving your accounts receivable in healthcare requires highly active management of your revenue cycle and addressing any process inefficiencies. So, dedicating efforts towards optimizing administration, optimizing cash flow, and running AR reports, will do wonders. They will aid in recovering what otherwise would be a lost revenue in healthcare subsequently.

What are Accounts Receivable?

Medical accounts receivable predominantly refers to the outstanding reimbursement owed to providers for issued treatments and services. Healthcare providers must always stay on top of their efforts to collect reimbursement for accounts receivable.

Revenue Leakage & its Consequences:

Excessive revenue leakage always poses a severe risk for U.S. healthcare providers. As a matter of fact, many hospitals already operate on negative margins that fall short of their income by hundreds of millions of dollars.

According to a recent survey, over 40% of respondents’ organizations lose 10% or more to leakage. Perhaps a more frightening aspect is that 23% of respondents do not even know the leakage costs their organizations bear.

Revenue Cycle Management (RCM)

The AR cycle is the final segment of the revenue cycle. Revenue Cycle Management (RCM) seeks to streamline the process apparently. It also identifies areas to minimize instances where mistakes can occur. RCM always requires ongoing engagement, and its sophisticated efforts may pave the way to leverage data analytics.

Short AR Turnaround-its Challenges:

Following the Affordable Care Act’s passing in 2010, most of Americans signed up for the high-deductible plans. It was done to reduce their monthly expenditures. On the contrary, this choice left many patients responsible for an exuberant percentage of their medical bills.

Recouping reimbursements from individual patients places a highly significant burden on the medical providers’ AR processes ultimately.

Getting it Right the First Time

It’s very critical that providers properly collect patient information and submit the correct claims on their first attempt itself. Inaccuracies and errors set the providers up for insurance claim denials. Apart from that, it will also lengthen the AR cycles from the start.

Charge Entry:

Following a patient visit, healthcare providers take on the administrative burden of determining the exact charges. It is mainly for the care provided before submitting and tracking claims through the end of the AR cycle. Charge entry in medical billing refers to the process clinicians should keep a tab for submitting detailed lists of the services patients receive. They must be coded for claims submission.

If there are any miscoding in the charges, providers leak revenue due to underpayments and also risk audit penalties.

Claims Submission:

Once providers have captured and coded the charges, they must submit the claims to payors and patients for reimbursement collection.

AR Tracking:

Tracking your accounts receivable every month gives providers the necessary information to lay hands on those at risk of becoming leaked revenue. Providers can easily compare ARs over time to recognize dangerous trends early. Further, you can determine any outstanding reimbursements that may prove easy to close.

Improve AR and Cash Flow:

A high AR inhibits cash flow.

Here are the 8 golden steps you can take to optimize your AR

1. Run AR Reports:

Keep track of the AR trends and fluctuations by running the AR reports every month. These reports should compulsorily include aged receivables so that you can have an eye on the progress of older bills. As a matter of fact, it is advisable to run these reports from the service date instead of the billing date. This is predominantly to identify the billing schedule issues, in particular.

2. Follow-up with Outstanding Accounts:

Patients with outstanding balances should be sent notices at regular intervals. If they continue to neglect them, have your office follow up by phone. Phone calls will be a bit more difficult to ignore than letters. If your patient is ignoring both…then, you may need to make use of the more aggressive tools of a collection agency on the go.

3. Increase Billing Cycles:

Medical offices often mail bills once a month only. This will impinge the accounts payable cash flow on a larger scale. You can try mailing patient invoices once a week and insurance invoices twice a week. The quicker a bill arrives at the proper recipient, the sooner it gets paid. Ultimately, there will be an increase in receivables cash flow.

4. Examine Claims Closely:

Collect your staff and examine your claims for 100% accuracy and completeness. Claim errors can increase AR. Hence, prior to submitting claims, proofread your submissions.

5. Check Insurance:

Before a new patient arrives, verify whether they are eligible to utilize the treatment with their insurance. After eligibility confirmation, decree how much they will owe based on their copay and also deductibles. You should notify them prior to the appointment.

6. Examine Write-offs:

Practice reviewing each potential/valid write-off before it is sent through. Determine which situations – by dollar amount, medical procedure, etc. – demand approval.

7. Payment Collection:

It should be insisted that each patient should submit their copay before leaving the office. Many practices are also reckoning benefits way ahead of surgery and requesting a deposit of the full estimate or a percentage therein.

8. Outsource Billing:

Another wise step is to hire a medical billing company to reduce stress and manage your AR. Outsourced billing companies code and also examine your claims for error, do a proper follow-up with denials, and optimize your cash flow.


You can reach our website for further clarification or get in touch with our experts if you have any queries regarding accounts receivable medical billing.


Spread the love