Based on the credible estimates by Medical Group Management Association (MGMA), practitioners fail to collect as much as 25% of their accounts receivables on an average, owing to a host of reasons, particularly the various complicated rules of the Insurance Companies. The rules that have turned complicated with time often lead to high risk of denials, incomplete payments and lost or ignored claims. It is also estimated that not less than $125 billion is unclaimed by provider’s offices every year owing to poor AR management at their end. Not to mention, the loss of revenue thus is quite unnecessary and avoidable, since there are many smarter ways to ensure that your account receivables remain on track.
1. Follow ‘Payer Schedule’ Model
Account Receivables are placed into different buckets based on their aging, like 30/ 60/ 90 days. These buckets imply the respective timelines to take appropriate follow-up action. Each payer has their own payment schedule and a pre-defined interval to process the claims. To illustrate, say insurance company ‘A’ may process payment of a bill in 14 days whereas another insurance company ‘B’ may take 40 days to process the same bill. In other words, if a practitioner chases all dues after flat 30 days, it will be too late for company ‘A’ and way early for company ‘B’. To conclude, follow schedules as provided by the insurance companies to reduce your AR days and see the payment reflecting.
2. Online Claim Submission & E-Documentation
As per American Medical Association, physicians having electronic claims processing reduce their submission cost from 14% of revenue to roughly 1%. Besides, aggressive online claim status tracking and obtaining remittance advice electronically also helps the provider’s office maximize collections in minimal days.
3. Track and Standardized Denials
Analyzing the denial causes could also help the provider’s office optimize the account receivables in an economical manner. Each denial may be categorized based on its types – such as enrollment, medical necessity, justification, coverage, authorization and the likes. This allows the physician’s office to understand the causes of denials and act accordingly to minimize the denials.
4. Target 100% First Yield Pass
The Centers for Medicare and Medicaid Services (CMS) estimated that only 70% of claims are paid in the first go of their submission. Moreover, medical practitioners do not re-submit 18% of their unpaid dues. The best remedy is to take effective pre-emptive measures like identifying the potential denials and ensure clean claims submission. An efficient AR management system in place would help the provider’s office accomplish this.
5. Benchmark against Industry standards
The American Medical Association website shares information about payment timelines of different insurance companies. The provider’s office could use this information to gauge its payment timelines for various bills. If the bills are not paid within respective timelines, it could be because of two reasons – either the claims submitted have not been clean or the follow-up procedure for unpaid claims has been insufficient. On the other hand, having a reliable AR management system would not only ensure clean claims submission, but also rigorous continuous follow-ups and optimum revenue generation hence.
Medicalbillersandcoders.com is renowned for its state-of-the-art and world-class AR Management that handles the management of accounts receivables efficiently and takes “the right action at the right time”.
FAQs
1. What is accounts receivable (AR) in medical billing?
Accounts receivable refers to the money owed to a healthcare practice by patients and insurance companies for services provided. Managing AR is essential for maintaining a steady cash flow.
2. How can I improve my practice’s AR management?
Regularly follow up on unpaid claims and maintain accurate billing records. Implementing a solid AR strategy helps in timely payments and reduces outstanding balances.
3. Why is it important to track AR regularly?
Tracking AR ensures you identify overdue payments quickly and address any billing issues. It helps avoid cash flow disruptions and improves financial stability.
4. How often should I review my AR reports?
It’s recommended to review AR reports weekly or monthly. Frequent reviews allow you to catch issues early and improve your revenue cycle management.
5. What role do insurance companies play in AR management?
Insurance companies are a key part of the AR process, as they reimburse practices for services rendered. Understanding their payment timelines and follow-up procedures is crucial for effective AR management.
