Running a well-managed practice takes balance. First, give great care. Second, keep your finances stable. However, many U.S. medical practices struggle with one issue. That issue is old accounts receivable (A/R).
High A/R doesn’t mean you lack patients. Instead, it is more likely that it indicates some problems in your RCM process. For instance, such problems may occur at the front desk. In the same way, it may appear as missing claims or unpaid co-pays.
So What’s Causing High Accounts Receivable in Healthcare?
First, you need to know why unpaid balances happen. Also, medical billing in the U.S. gets harder every year. For instance, commercial payers, Medicare, and Medicaid change their rules often.
The following are the main causes of high A/R:
- Incorrect patient or insurance information during admission.
- Wrong coding or delays in filing of claims resulting in claim denials.
- No efforts made in following up claims not paid within 30 or 60 days.
- No standard procedures for obtaining payment from patients before providing service.
Over time, these problems add up. So, your staff spends hours chasing old debt. That’s time they could spend on patient care instead.
1. Increase Efficiency in Front-Desk Intake and Eligibility Verification
Most denied and delayed claims start at patient intake. For example, an ID number might get typed wrong. Or an insurance policy might have expired. Either way, the claim gets denied before it’s even reviewed.
So, here’s how to fix these errors at the front desk:
- Check patient record before appointment: Ensure that the insurance is valid. Confirm insurance coverage prior to visit.
- Automate Prior Authorization: Prior to any special test use a checklist.
- Ensure consistent intake practices: Educate staff on checking basic information at each intake. Name and policy number is included. Also contains date of birth, insurance type.
- Complete Intake Forms Digitally: Let patients fill out their own forms. This cuts down on data-entry mistakes.
In short, fewer intake mistakes mean fewer denials later. So, that means faster payment for you.
2. Develop Clear Payment Policies for Patients
More patients are opting for health plans that have high deductibles. This means that their own payments are increasing. Hence, it is generally more difficult to collect from patients than from insurance companies. Nevertheless, having clear policies will prevent any billing issues.
First, write a clear payment policy. Also, tell patients what they owe before they see the doctor. This includes co-pays, co-insurance, and any balance due.
Second: Make payment hassle-free. For instance, accept credit cards, ACH transfers and e-wallets. Also, provide an online payment system. Lastly, be sure to remind people about the payments via text or email.
Finally, provide financing options for sizable amounts. In addition, opt for automatic deductions to make things easy. This assists patients to access treatment. Plus, it keeps your cash flow steady.
3. Use a Clean Claims Strategy
A clean claim gets paid the first time. In other words, there’s no rejection and no extra paperwork. Therefore, clean claims are the fastest way to shrink your aging A/R.
Your clean claim rate should be at least 95%. However, hitting that number takes solid coding and scrubbing work. In short, a strong clean claims strategy includes:
- Trained Coders: Hire coders that have been trained using current ICD-10, CPT, and HCPCS codes in order to minimize coding errors.
- Scrubbing Software: It is advisable to use scrubbing software to test claims prior to submission in order to detect such things as formatting errors. It will also catch unbundled codes and missing modifiers.
- Submit Claims Quickly: Do not group claims. In fact, grouping just delays payment.
- Current Payor Policies: Change your billing software if payor policies change.
Finally, doing this well means less time spent processing claims.
4. Perform Thorough A/R Follow-Up and Denial Management
Even clean claims sometimes get denied. So, what separates a healthy practice from one buried in unpaid claims? Simply put, it’s how well the practice handles those denials.
Too often, billing teams let denied claims sit untouched. As a result, claims pile up in the “old A/R bucket.” In time, it’s too late to refile them.
The first step towards effective management of denials is categorization of the denials on the basis of their type. The commonest reasons for such denials can be those that involve non-covered service, documentation issue, or a coding error. This will make it easier to detect patterns and educate your team accordingly. In addition, set up a time limit for approaching the insurance company, which is supposed to be between 30 to 45 days. Lastly, teach your team to write effective appeal letters and support them with correct medical codes.
5. Track Key Financial Metrics Continuously
You can only improve what you measure. That’s why practice owners need to track key financial metrics. Overall, doing so helps you manage aging accounts well.
Here are the metrics to track carefully:
- Days in Accounts Receivable (DAR): Number of days taken for payment. The target should be below 40 days where possible. If the above ratio is above 50 days, it shows that there is a problem with the process flow.
- Percent of A/R > 120 Days: Percent of A/R over 4 months. In addition, make sure that the above ratio is not above 10%.
Check these numbers every month. This way, you catch bad trends early. As a result, you can adjust your workflow before you lose real revenue.
6. Engage the Services of an Expert Billing Specialist
Handling the entire revenue cycle in-house is a heavy lift. Indeed, it falls hard on front-office and clinical staff. For one thing, payer rules change constantly. Also, state requirements shift. Plus, coding updates and patient collections add even more work. As a result, staying on top of it all takes real skill. It also takes the right technology.
That’s why many practices outsource billing to specialists like MIU Medical Billing. These companies employ certified coders. They are also equipped with cutting-edge technology.
Conclusion
Cutting aged A/R isn’t a one-time task. Instead, it’s ongoing work. Overall, good intake practices, solid billing, and strong follow-up all help. The right partners matter, too. Together, they keep your practice’s cash flow healthy.
So, take charge of your billing process today. Contact MIU Medical Billing. Then, learn how our Revenue Cycle Management service can help.
