How Hospital Accounts Receivable Management Boosts Your Bottom Line
Hospitals and healthcare facilities have been the forefront of a major transformation while at a crossroad of increasing demand for higher acuity care and deepening financial stability.
Persistent workforce shortages, severe fractures in the supply chain of drugs and equipment and changing healthcare regulations and claim submission guidelines are making the administration a cumbersome process.
While on the one hand, providers are putting in their hard work and dedication, on the other hand, due to the complex nature of revenue cycle management they are struggling to obtain accurate reimbursements.
Managing hospital accounts receivable is a crucial part of revenue cycle management and a minor mistake can lead you to claim denials and substantial revenue loss.
Let’s dive deep into the different nuances of hospital accounts receivable services and what you can do to improve the same.
Understanding Hospital Accounts Receivable
Accounts receivable in healthcare are the reimburses owed to a medical practice, hospital, independent physician and other healthcare facilities. The outstanding payments may also include patient payments.
Once you bill a patient and submit a claim to the insurer, the accounts receivable process begins. After the patient reimburses your payments or insurance company reimburses you for the rendered services, the account is no longer in the accounts receivable bucket.
According to the AAFP, days in accounts receivable should be no more than 50. And 30- 40 days are ideal. Days in accounts receivable are vital as they inform you of the average time taken to be paid by different clients so that you can work on the overall collection time and revenue cycle.
Why are Hospital Accounts Receivable Significant?
Days in hospital accounts receivable buckets explain the financial health of your practice which is essential when it comes to sustaining functionality and quality care in the long run.
The bigger the number of accounts in AR, the less cash the practice collects. And, regretfully, the longer the money ‘awaits’ in accounts receivable, the lower the chance that the practice will be paid in full for the services.
When your practice’s accounts receivable accumulates, there is less money on hand for day-to-day practice or paying employees. In the long run, you may be forced to take a charge off the unpaid or delayed patient balances (called bad debt) which is negative revenue to the business. The management of accounts receivable will ensure that your practice flourishes and doesn’t get into more worsened financial difficulties.
How to Improve Your Hospital Accounts Receivable
You can implement some preventive strategies to enhance the hospital accounts receivable management process. Before that here is a brief list of common reasons for increasing days in AR:
- Delays in filing claims
- Lack of insurance eligibility and benefit verification
- Incorrect coding
- Data entry errors
- Increased claim rejections
- Inefficient appeals process
- Credentialing delays
- Incorrect posting process
- Increased out of pocket and decrease in patient account receivables
Best Practices in Hospital Accounts Receivable
- Streamline insurance verification
- Establish a defined collection culture in your practice to collect copays and deductibles at the time of service
- Implement regular internal audits to eliminate process inefficiency and errors
- Monitor and track your accounts receivable regularly
- Establish a follow-up system and denial management process
- You can automate your claim processes to reduce the chances of errors and increase productivity in your practice
Expertise Always Counts!
If you are overwhelmed by your increasing hospital accounts receivable, it might be time to call an RCM team. Ultimately, managing an efficient hospital accounts receivable service is all about putting the right people and processes in place.
A team of outsourced RCM experts can help your practice get paid while reducing your overall days in accounts receivable with their experience and extensive knowledge.
Delegating this vital activity to an experienced medical billing company that handles the activity will involve expert personnel. Your consultants must have a sound program and efficient internal control mechanisms to assist you in acting in outstanding accounts receivable and avoiding the accumulation of accounts receivable backlogs.