For instance, mistakes in billing codes can result in claim denials, which require additional time to correct and resubmit. Similarly, inaccurate insurance information or a lack of timely verification can delay claims processing and reimbursement. Patient payments can also be delayed, especially with high-deductible health plans, where patients may struggle to understand their financial responsibilities. These delays can lead to longer accounts receivable cycles, creating significant cash flow bottlenecks for healthcare providers.
To improve AR processes and prevent delays, practices can take several steps. Automating billing systems can reduce human error and speed up the claim submission process. Ensuring accurate and timely insurance verification before treatment is key to minimizing delays. Consistent follow-up on unpaid claims is essential for accelerating payments. Additionally, offering flexible patient payment options can help patients settle their bills on time. By adopting integrated AR software and investing in staff training, healthcare organizations can streamline their revenue cycle, reduce AR delays, and ultimately improve cash flow, supporting both financial stability and the delivery of quality care.
Common Issues faced in AR credibility
Revenue Cycle Management (RCM) in healthcare often faces several pain points that can impact efficiency and financial performance. One of the most significant challenges is complex billing and coding, where errors or incomplete coding can lead to claim denials and delayed payments, affecting cash flow. For example, a hospital may submit a claim using incorrect medical codes, leading to an insurance company rejecting the claim, which necessitates resubmission and further delays in reimbursement. Claim denials are another major issue, where providers must spend significant time and resources understanding and addressing denials, which can result in delayed revenue. In addition, insurance verification issues often arise when patient insurance details are inaccurate or not updated, leading to problems in billing and payment collection. A clinic, for instance, may face delays in receiving reimbursement due to errors in verifying insurance coverage.
Another common pain point is inefficient documentation, where inaccurate or incomplete patient records lead to billing errors. A busy medical practice, for example, may have to deal with delayed payments or audits due to poor documentation, which affects its overall revenue cycle. Additionally, regulatory and compliance challenges are significant, as healthcare organizations must continuously adapt to evolving rules and regulations, such as changes in coding systems (ICD-10) or insurance policies. Out-of-pocket costs and patient payments also complicate RCM, as patients may struggle with high-deductible plans, leading to delays or non-payment of medical bills. Moreover, many healthcare organizations still rely on fragmented systems that do not integrate well with each other, creating inefficiencies and increasing the likelihood of errors in patient data management.
For instance, a healthcare provider might struggle with poor integration between their scheduling system and billing system, leading to duplicate entries or missed charges. Staffing and training challenges also affect RCM efficiency, as many practices face difficulties hiring skilled personnel or training existing staff to stay on top of billing codes and insurance changes. Additionally, managing cash flow can be challenging, as slow payments and administrative errors create financial strain. A hospital, for example, may face difficulties meeting payroll if their RCM process is delayed by inaccurate billing or unpaid claims. Finally, patient experience is often negatively affected by the complexity and lack of transparency in the billing process, resulting in patient frustration and potentially harming provider-patient relationships. Implementing integrated RCM solutions can help alleviate these pain points by automating many of the manual processes, reducing errors, improving billing accuracy, and ensuring faster claims processing. Solutions like automated insurance verification and real-time coding software can streamline the process and enhance both operational efficiency and patient satisfaction.
AR as a separate vertical Medical Billing
Once a patient or their insurance provider has been billed, the outstanding payment to the practice is categorized as accounts receivable (A/R). Accounts Receivable (A/R) management in healthcare can be assessed using various methods by the practice. First, a practice typically monitors "Days in A/R" by dividing the total accounts receivable by the average daily charges of the practice. Second, accounts are often categorized based on their age, such as:
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1 to 30 days since billed
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31 to 60 days since billed
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61 to 90 days since billed
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91 to 120 days since billed
The longer an account remains unpaid for services rendered, the higher the likelihood that it will remain uncollected. Therefore, ARs don't count as revenue because the money is still unpaid.
Studies show that for accounts over 120 days old, providers usually only recover about 10 cents for every dollar owed. When A/Rs are not addressed promptly, it places a strain on financial departments, increases workload, and can result in unnecessary costs and revenue loss for the practice.
5 ways to Improve Your Accounts Receivable Management in Healthcare and Improve Cash Flow
Maintain open patient communication about financials
Providers with clear payment terms are less likely to experience delays in accounts receivable. In a lot of enclosures, you can reduce the number of delinquent or delayed payments just by making sure payment expectations are clear for the patient before services are ever rendered. Having new patients sign a payment responsibility document during their first appointment provides clarity on payment expectations and ensures mutual understanding regarding financial obligations.
Practice frequent follow-ups on outstanding accounts
Late payments are a fact with medical accounts receivable. However, it's crucial to properly manage outstanding, unpaid accounts. Among all companies, 1.5 percent is written off as bad debt, and 93 percent deal with late payments. The longer unpaid accounts remain unresolved, the lower the chances of them being paid. Ensure that patients are regularly notified through phone calls and letters, and pursue more assertive collection actions when required.
Consistently run A/R reports
The goal is to minimize A/R days, as it enhances the efficiency of revenue cycle management. This requires AR to be closely tracked. Regularly analyzing A/R data on a monthly basis helps identify concerning trends or persistent issues with payment collections.
These reports should examine things like:
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Average AR cycles
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Delays between services rendered and invoicing
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Aged accounts
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Collection rates
Process payments for co-pays and in-office services.
Requiring patients to pay co-pays or bills at the office reduces accounts receivable for medical practices. Some practices also request deposits or a percentage upfront for certain procedures, rather than billing the full amount afterward. While this may not reduce the number of accounts, it helps decrease outstanding balances. Payments made upfront contribute to immediate revenue, improving cash flow for the provider.
Consider A/R workflow automation
A/R workflow automation saves time by handling some of the more time-consuming tasks in accounts receivable management in healthcare. Many programs now make automating A/R processes more possible. For example. RND Softech revenue cycle management (RCM) solutions handle things like benefits verifications, submitting claims, and creating A/R reports. This automation not only speeds up invoicing and payment collection but also helps minimize issues like missed A/R accounts or claim denials.
Conclusion:
At RND Softech, we offer advanced Revenue Cycle Management (RCM) solutions that can optimize your billing, automate tasks, and improve cash flow. With our experts, we help you minimize delays, reduce costs, and increase practice efficiency. Take advantage of our risk- free trial today! Explore how RND Softech can transform your A/R management and improve your bottom line, without any commitment. Contact us now for a personalized price inquiry and see the difference firsthand!
