How old is your AR? What is one of the most critical issues that the healthcare industry is facing today? Do high account receivables impact revenue cycle services in the healthcare industry? The impact will be more if your office holds more AR days than it usually has to be. Healthcare organizations often seek the correct answers to reduce their receivables for over 30 days and prevent them from occurring in the future. You will require the best tips to reduce AR days in revenue cycle services.
Tips to reduce your AR days faster in revenue cycle services:
- Analyze your place in terms of AR
- Invest in technology to reduce your AR days
- Provide multiple options to patients to pay their bills
- Seek medical billing companies to collect outstanding account receivables
Analyze your place in terms of AR:
- How can you succeed in revenue cycle services when you don’t have a perfect understanding of your place in AR?
- To stay unique from the competitors, healthcare providers need to improve revenue cycle services by imposing possible rules and implementing changes to increase overall performance.
- As it involves more trends in achieving profitable collections, it remains an excellent opportunity to look at the available trends and options in the market.
- You must be aware of the total accounts receivable and charges for the last six months so that you can efficiently compute your current DAR by:
- Average Daily Charges = Total charges for last six months ÷ Number of days in last six months.
- DAR = total accounts receivables ÷ Average Daily Charges
- In case the result goes between 40 and 50, then your billing performances shall be considered average.
- When you have this data, it’s easy to find out what had gone wrong in the process and rectify them as soon as possible.
Invest in technology to reduce your AR days:
- Several software programs are available in the market to accurately estimate patients’ out-of-pocket liability from their insurance coverage.
- If you can provide this information before advanced treatment, it will be helpful to work on AR days, without a doubt.
- If at all the patients already realize the estimates that have been provided, they will be more likely to pay early.
- With the help of billing and coding software, healthcare professionals can quickly determine the status of multiple bills and payments.
- Moreover, you find better results when the core EHR has been integrated with the revenue cycle services.
- This creates the complete revenue cycle services automated by ensuring an accurate claim submission process.
Provide multiple options to patients to pay their bills:
- Patients mostly prefer multiple billing options like credit card payments, check payments, online payments, or mobile app payments.
- With the help of experts in medical billing companies, the payment process becomes easy, and patients find it more flexible to pay their bills.
- Trained staff and 24/7 online payment options will help you to reduce your accounts receivable days.
- So, healthcare organizations must encourage digital payments, even if it’s a mobile app payment or online payment portal.
- The digital payment option makes the billing payment quick and more secure.
Seek medical billing companies to collect outstanding account receivables:
- There can be situations where you follow all the above strategies and still fail to collect payments on time.
- It means that you require an expert solution. Expert revenue cycle service companies or medical billing companies will devise a plan based on your healthcare business model. They have the appropriate set of skills in carrying out such tasks.
- They also can identify the point of your failure and highlight the benefits. Hence, outsourcing account receivables are considered a great option to enhance overall business profits.
Other Key Steps to Reduce Your AR Days:
- The Ideal Number of AR days usually varies depending on the type of healthcare facility. So, defining a goal for your AR days would be the first and foremost step.
- Work towards the exact documentation process for medical billing and coding cases helps to reduce your AR days.
- It also ensures consistent communication with physicians on outstanding receivables and timely completion of the critical process.
- Make sure your medical billing experts clearly understand your expectations for clean claims.
- Better to set a reasonable goal of clean claims within 48 hours of receipt of required documentation. Also, do an AR follow-up on rejected claims.
- Manage the claim denial process efficiently to reduce your AR days is essential for successful revenue cycle services.
- Ensure if you have a defined process for denial management so that it can be handled to minimize the time to pay.
How to Follow-up AR?
- Healthcare professionals must cover the charges at the time of service. Also, they should charge patients with a variable co-payment at the time of service.
- The medical billing staff should have a Medicare allowable payment schedule of the patients for the provided services in the office, along with the pre-calculated 30% co-payment during the patient’s checkout.
- Apparently, the staff should be aware of those Medicare patients who don’t possess co-insurance, and these staff should collect the co-payment before the patient leaves the office.
- At present, various factors cause overheads for healthcare organizations like outstanding claims and delayed collections above all stringent federal regulations.
- This phenomenon increases the pressure on healthcare organizations to follow up on denied or appealed claims.
- If the account goes uncollected for a longer duration, then it creates a more significant loss for the healthcare professional and needs resources for collections.
What if the average AR is above 52 days?
- If your AR days cross 52, reducing it up to 21 days can add 31 effective days of revenue flow to your medical practice.
- Most of all, the practices aim to receive payments as early as possible and on time.
- Managing AR requires ongoing collection techniques, regular reporting and monitoring, continuous tracking of – AR, normative receivables ratios, and strategies to help achieve lower AR days.
Following a regular strategy and fixing it every time can help your business run with minimal AR days. Outsourcing account receivables is most recommended as it handles every stress and looks out for profits.
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