Improving account receivable in healthcare depends on how actively you manage the revenue cycle. Moreover, it is also essential to address inefficiencies in the process. Healthcare practices can recover greater revenues by putting efforts towards tracking claims, running accounts receivable reports, and optimizing administration.
Account Receivable in Healthcare
Accounts receivable or AR in healthcare is the pending reimbursements for providers against the services and treatments they offered. Providers must receive accounts receivable reimbursements efficiently. If the AR goes uncollected for a long time, possibilities are that the medical practice will not get it.
The accounts receivable cycle begins when a medical provider bills insurance companies or their patients. ARs cannot be considered assets. Medical providers usually classify AR as follows:
- 1 to 30 days
- 31 to 60 days
- 61 to 90 days
- 91 to 120 days
If healthcare providers fail to receive reimbursements, it will lengthen the accounts receivable cycle. As a result, there will be revenue leakage.
Reducing Days in AR
Process evaluations remain a straightforward solution that medical providers can consider to improve AR. When you don’t address process oversights and inefficiencies, account receivables start to accumulate. It becomes a cause of revenue leakage in the account receivable in healthcare. Here is how medical practices can reduce days in AR.
- Appropriately gather information about the patients and submit claims correctly on the first attempt.
- Set financial expectations and gather portions of patients promptly.
- Ensure accurate charge entry. Miscoded charges result in revenue leakage.
- Ensure accurate and timely claims submission. Inaccurate claims submission results in claims denial. As a result, there will be lengthened accounts receivable cycles.
- It is essential to track AR every month. It offers insight into all risks that may become a cause of revenue leakage. When tracking AR, medical providers should determine the average accounts receivable cycles by running reports.
By following the above-discussed things, healthcare practices can improve account receivable in healthcare.
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