Accounts receivable (AR) is one of the key indicator of a practice’s performance; with increasing AR Days causing cash flow concerns for various Medical Practices, and physicians are rightly concerned when the practice’s AR days increase.
Industry Standards State
Typically medical practice’s average Accounts Receivable Days = 52 days |
In case of an average AR being 52 days of a medical practice, reducing it to 21 days can add 31 days of cash flow to the practice. Moreover every practice hopes to receive payments as early as possible as the dollar value is more valuable in the present than when received later.
Counts receivable > 90 days- The following table illustrates that more profitable medical practices have more than 85% of their AR collected within 0-90 days.
Accounts receivable of Medical Practices |
Under 30 days |
30-59 days |
60-89 days |
90-119 days |
120 days or more |
|
65% | 18% | 9% | 5% | 3% |
|
50% | 15% | 13% | 7% | 15% |
Collection Probability for both |
95% | 85% | 75% | 65% | 50% |
AR greater than 180 days is generally considered as bad debt.
Managing AR requires on-going collection techniques, regular reporting and monitoring, continuous tracking of - AR, normative receivables ratios and techniques to help achieve lower AR days.
Following are few signs which indicate your AR may require to be evaluated for further improvement -
|
|
|
|
|
|
Practices facing high AR days or not comparing favorably to industry standards need to look into their payment and collection processes to understand the problem areas which need to be sorted. This process entails- analysis of payers, reviewing patient co-pays, review of outstanding payments collection process, error calculations and researching new ways of improving billing systems like automation.
Medical practices may involve their billing staff and also seek their suggestions; some also employ a financial counselor or billing partner to help improve their AR.
Reducing your medical practice’s AR days with MBC …
MBC’s AR services help our clients make a difference to their Medical Practice by -
Medicalbillersandcoders.com has been assisting in revenue maximization for healthcare organizations for over a decade now across the 50 US States and across varied specialties. Our customized reporting along with a dedicated account manager assures regular, accurate and detailed Account Receivable Management for our clients. MBC is constantly striving to reduce AR days to achieve the right revenue for your organization.
MBC = Billing Quality & Transparency + Proper reporting processes + Updated technology + Data Security and HIPAA Protection+ Constant updates+ Quick follow ups + Cost effective
Practice acquires less than 20 days in AR for most cases!