In the intricate landscape of healthcare, mastering the art of accounts receivable (A/R) management is paramount if you want your healthcare organization to be successful. Keeping track of outstanding payments in any industry is no small feat, and when you factor in the complexities of healthcare billing cycles, implementing solid A/R processes can feel impossible. We’ll break down common reasons accounts receivable in medical billing departments struggle and provide best practices you can implement to improve your revenue cycle management.
Understanding the Intricacies of Accounts Receivable in Medical Billing
In any industry, monitoring accounts receivable is a critical aspect of financial management, representing the money owed to a company for goods or services provided on credit. In the context of healthcare, accounts receivable refers to the outstanding balances owed to a healthcare provider by patients and insurance companies for services rendered.
Medical A/R is distinct from other industries because collecting payments involves working directly with patients and insurance companies, all while maintaining regulatory compliance. Efficiently managing A/R is essential for maintaining a healthcare practice’s financial health. Timely payment collection ensures steady cash flow, reduces debt, and supports operational sustainability. Plus, when you closely monitor your A/R, you can identify trends, streamline processes, and improve the overall financial health of your practice.
Best Practices for Effective Accounts Receivable Management
If you’re looking to enhance profitability at your medical practice, a great place to start is fine-tuning your accounts receivable processes.
1. Collect and Submit Correct Patient Information and Claims
Accurately capturing patient data increases the likelihood you’ll file claims correctly the first time. It may even make sense for your practice to collect patient data prior to their first visit. Then, when your patient comes in, verify all the information they provided is correct. Finally, when submitting claims, double and triple-check before you send — it’s far less time-consuming than correcting an error or managing denied claims.
2. Simplify the Patient Payment Process
Providing multiple convenient payment options, like online portals or payment plans, enhances patient satisfaction and facilitates prompt payments. Older generations may prefer receiving and responding to an invoice through physical mail, while younger generations may prefer making payments online. No two patients are alike, and the more options you have, the more likely you are to collect prompt payments. Making this process as easy as possible, without unnecessary hurdles to deal with, goes hand in hand with providing a variety of options for patients.
3. Have a Plan for How You’ll Collect Overdue Payments
Sometimes, patients don’t pay their bills on time — that’s unavoidable. But if you don’t have a set of processes in place, you may find a handful of unpaid invoices can quickly multiply. Evaluate when and how you’ll send reminders of outstanding bills. Even though involving a debt collector is always the last resort, make sure you consider at what point it’s best to pass a bill along.
4. Adopt the Right Technology
A billing software like Benchmark PM can make all the difference. Within one platform, you should be able to view outstanding claims, pull financial reports, and more. Plus, don’t overlook the importance of integrations — if your EHR can automatically populate the codes you’ll eventually bill for, you can save a lot of time. Though software is an investment, it’s well worth it, so if you find your billing platform is holding you back, it may be time to consider making a switch.
5. Effectively Track A/R Performance
Regularly reviewing A/R aging reports allows for early detection of overdue accounts. Each day, set time aside to review what payments need to be collected. Or, even better, configure a report or dashboard that updates in real-time. Depending on your practice’s specialty and unique processes, you may want to consider customizing reports to your liking.
