Be Aware Of These Medical Account Receivables Management Mistakes? ‘’Improper cash flow scenario’’ is inevitably a common problem that has disturbed the whole healthcare industry recently. The threat of your ledgers slipping into the danger zone is your constant companion whether you are running a specialty-specific practice or a high-volume physician’s practice. Though at the end of the day you are struggling to stay in the black (to be financially solvent or profitable)_ however, your consulting rooms may be seeing a huge flow of traffic and your waiting room may be filled with patients.
Undoubtedly, the troubled medical accounts receivable is the culprit lying at the heart of your cash flow problems. Because your business bottom-line shows how you manage and process your accounts. But, oftentimes, the medical practitioners do concern about the payment collection for the rendered services that many times just pose to be a frustrating and complicated process.
Besides, you can tighten up your A/R management by preventing the common A/R management mistakes to avoid falling into the red. Let’s dig deeper to find out what are the most common A/R pitfalls impacting the financial stability of a healthcare business drastically.
The simultaneous rise in costly write-offs is also leading to a spike in insurance claim denials. The healthcare industry has seen a 90% advance in total write-offs due to unrecovered patient copays and denied insurance claims. This has not only influenced the provider’s ability to provide state-of-art care to their patients but also impacted the net business revenues.
It is somehow trickier to handle unpaid accounts. Yet, it is significant to review every account carefully. Prior to writing anything off as a loss, be sure to exhaust all possible payment options. Consumers often in most cases pay off their outstanding balances and are willing to work with you. At this point, if your A/R team applies themselves to the task at hand, you can recover the revenue.
Insurance Claim Denials
It has been seen that each year more than 200 million insurance claims get rejected, according to a recent survey conducted by the AARP. According to the estimation, these rejections can cut the profits of a medical facility by 10% or 15% per year. The most common causes of these rejections that leads to loss of revenue are;
- Missing filing deadlines.
- Lack of pre-authorization for procedures.
- Inaccurate and incomplete insurance data.
Patient Responsibility & Bad Debt
It is increasingly difficult for medical firms to collect on payments due to the rise in healthcare costs and the portion of these costs which the consumers are responsible for. You can’t simply turn the table to eliminate these losses and reduce the chances of patient-related bad debts.
Thereby, out-of-pocket costs must be clearly explained to the consumers and must be calculated before any procedure. Comprehensive billing experience to the patients will ensure they are understanding their financial obligations and ensure prompt payment of any outstanding debts.
Why Is AR Follow-Up Management Important?
You can deny the importance of AR follow-up management in medical billing. A/R management is crucial for the financial success and stability of a medical business. Medical A/R refers to the total amount owed to the healthcare organization for those services rendered but not reimbursed.
Medical claims follow-up reduces the number of days from submission to payment and would also reduce A/R days. Preferably, when you provide the services immediately submit the claim within 72 hours. Additionally, the procedure to manage A/R involves applying procedures to secure payments, assessing payment action, and tracking unpaid accounts.
The main aspect of managing A/R is to ensure patients pay their balances that are due and claims get paid. Many medical practices provide patient services. 25% of these services are going unpaid, according to the survey reported by the MGMA. Moreover, only 70% of medical claims are paid the first time on submission, according to the CMS.
It has also shown a huge loss for the healthcare providers when about eighteen out of thirty claims are not resubmitted to the payers. Here are a couple of tips to help your A/R team better manage your medical account receivables.
When the accounts go uncollected, it leads to the use of a large number of resources that practice needs to set aside for collection efforts and recoup the lost revenue. Ideally, it can be managed by adding days or months outstanding and A/R ageing in a periodic key indicator financial report. Therefore, when A/R teams keep tracking the timeframes of the payments they get the idea about;
- How many times did the patients receive the statements?
- What is the age of the insurance claims?
- How close the claims are going to meet the timely filing limit?
- How long has it taken since you made the last payment?
- How many claims did not go through the timely filing limit?
Following are the best strategies to improve collections, recommended by the MGMA.
- Payer’ Analysis of Collections
It is significant to identify which payers have a high volume of denials and which are slower to pay.
- Patients’ Assessment Collections
The healthcare organization must collect all the outstanding payments, prepayments, copayments at the service time. Before or at the time of service consumers must be educated on the payment process.
- Calculating Frequency of Errors
Healthcare providers should keenly check the process to ensure there is no error in capturing data, coding, billing, & other procedures. This will help you to see those areas that need improvements.
- Leveraging Advanced Technology
Practices should adopt tech advancement to reduce administrative burden and enable staff to take follow-up when accounts are past due.
- Staff Involvement
There must be a team to keep a follow-up with the particular payers, identify collection techniques that work. So, conduct regular meetings to discuss the problematic areas and A/R status.
Take Professional Support for AR Management & Collections
While consistent, regular, and effective management of AR is necessary to stay updated with the regular changes in rules or complex payer processes and ensure financial success. This has made it difficult for healthcare facilities to collect the amount due to them. That is the reason that claims processing & practice billing cycles are managed by specialists.
Having experienced personnel is necessary to avoid getting bad debt to pile up. The best way to combat this situation & avoid medical A/R management mistakes is to take the support of a reputable medical billing company. The right service provider can strategically manage the AR and minimize delays/expenses by streamlining these processes.