Controlling the Accounts Receivable and collections is essential when managing the cash flow of your medical practice. From billing and coding procedures to the money actually received, accuracy and efficiency increases the security of your company's financial situation. Identifying the factors that influence the accounts receivable to get out of control can help you to keep your income cycle healthy, organized and in a productive state of business.
How much control can a Physician really have over its AR?
A doctor's facility has as much control over its accounts receivable as it can devote to it. The accounts receivable process is more than just managing the account once it is established. The process should start before the patient begins getting treatments from you. If your in-house billing department is knowledgeable enough, they should run a credit check on the patients so you can evaluate the financial history to better protect from losing money on the back end. If the billing department is not capable enough to perform the duties, outsourcing the billing and coding requirement is a great way to stop you're AR from getting out of control.
If you notice a trend of late payments, you are better prepared to negotiate terms with the patients that will help you stay profitable in the event that you are paid late. An insightful credit report will show bankruptcies and liens, which could help you to avoid getting tangled up with patients that are likely to fail and leave you with pennies on the dollar.
Another important part of keeping your Accounts Receivable in check is by evaluating credit reports and setting credit limits for patients. This will help to protect the practice and also let the patient know it will have to keep up with payments in order to maintain the relationship.
Common problems Physicians face regarding AR?
Three common problems that seem to let the Accounts Receivable out of control are delayed AR days, errors in medical billing and coding and patients failing to pay because of economic difficulties. All three can become significant difficulties in a very short time.
If the in-house billing department is short-paying procedures, than you are not capturing your full earning potential on the account. A patient not adhering to the terms of payment will hinder your cash flow and potentially cause a monetary blockage to keep up with your financial responsibilities. And if you never receive payment from a patient, you have not only lost the money associated with providing the services, you also have lost the profit potential associated with treating them.
If these three point of reference are streamlined than rest assured your AR will not get out of control.
Monitoring cash flow and effective billing procedures
Effective AR management processes improve cash flow and generates income for future investments and operating revenue. Here are some ideas to improve your income cycle:
Some practices outsource all the billing and coding functions to offshore entities and rely on electronic billing and claims processing to ensure that claims are submitted with limited errors. Submitting claims electronically provides advantages such as:
If the above mentioned procedures and best practices are ardently followed by Physicians, they can concentrate on more important aspect their business, patient care and consideration.