Accounts receivable management is a process in healthcare organizations that manages pending reimbursements for their medical services. These receivable accounts are reserved for unpaid payments of outstanding patient invoices and insurer reimbursements.
The accounts receivable process is initiated once you submit reimbursement claims to insurance companies for your healthcare procedures and treatments. It is completed once those companies reimburse you for the services availed by your patients.
Accounts receivable management in healthcare is a step-by-step process in which you must implement certain steps to optimize your medical billing.
The steps involved comprise claim submission, claim follow-ups and patient collections. There are other steps included as well like payment posting and collection management.
The first step in medical AR management is claim submission in which you generate medical bills and submit their reimbursement claims. These claims are primarily submitted to the insurance providers of your patients.
The purpose of claim submission is to receive appropriate reimbursements from those providers for your medical services. You must ensure that accurate details are provided in complete and accurate reimbursement claims to prevent denials.
In addition, the medical codes assigned to your healthcare procedures and treatments should also be accurate. You may also provide any supporting documentation to facilitate the relevant insurance companies in approving your claim submission.
Healthcare organizations should also focus on following up with insurance companies about their reimbursement claims. This step can enable you to identify and fix any irregularities or discrepancies before your claims are denied.
Furthermore, you can also prevent partial and unpaid payments within the timeframe conveyed by the insurers. You should also monitor your accounts receivable so that you are always in a better position to address overdue payments.
You can implement additional follow-up measures like reviewing the aging reports of your patients to identify any overlooked collections. Hospitals and clinics also tend to consistently reach out to their patients to optimize collection efforts which maximizes their revenue.
Accounts receivable management involves patient collections as well as collecting sufficient reimbursements for medical services. This step is only applicable if the relevant patients have any deductibles, co-pays or any other out-of-pocket expenses.
These options enable you to directly bill your patients and you can report it by involving any third party for insurance verification. You can work with such patients to ease the reimbursement process for them by providing flexible options and payment statements.
You must include key details in those statements about viable payment methods including the recipient of reimbursement checks. Moreover, you should consistently communicate with your patients about their overdue payments to enable timely reimbursements.
The process of accounts receivable management continues in healthcare organizations even after they receive the appropriate reimbursements from insurance providers. You have to post them to their respective accounts in your medical billing system.
Payment posting involves reconciling the reimbursed payments with their relevant claims. This step enables you to make appropriate adjustments and offer discounts to your patients. You can use it to accurately record your reimbursed payments and address any discrepancies.
In this way, you can consistently review your payments to maintain records about their reimbursements and other financial elements. You can also efficiently manage your accounts receivable so that your medical services are appropriately reimbursed in the future.
This step includes a constant review of your accounts receivable to analyze their aging and identify the overdue ones among them. You can use several conventional methods to review them like letters and phone calls.
You can also work with specific collection agencies that specialize in collecting pending reimbursements from patients. They can also convey the payment terms on your behalf and follow up with your patients to speed up their payments.
These measures can simultaneously ensure timely payments and patient satisfaction for hospitals and clinics. They also put you in a better position to appeal any denied claims so that they can be reimbursed in a timely manner as well.
You can implement several techniques to elevate your accounts receivable and optimize their management. Some of the prominent ones comprise perfecting claim submissions, verifying patient information and validating insurance coverage.
Healthcare organizations can also focus on setting payment expectations, collecting upfront payments and tracking your accounts receivable. There are some secondary measures as well that can be executed to boost your accounts receivable.
You must ensure that your first attempt at recording details to submit reimbursement claims is perfect. In this way, you can minimize discrepancies to prevent claim denials and reduce your accounts receivable cycles.
A short AR cycle refers to a high turnover ratio and increased revenue as accounts receivable are swiftly reimbursed. It also enables healthcare organizations to maximize their collections on pending accounts.
Hospitals and clinics can also prioritize the verification of demographic entries to optimize their reimbursement process. You can also focus on verifying accurate details of key medical processes like patient registration and scheduling.
It is beneficial for your revenue cycle as you can efficiently bill and collect your reimbursement claims. It also enables you to close your accounts receivable and generate organizational revenue quickly.
You can allocate resources towards validating the insurance coverage of your patients. Any discrepancies can elongate the duration of your revenue cycle. This change is likely to impact your cash flow and accounts receivable as you may lose revenue due to claim denials.
Healthcare organizations can set up an automated eligibility system with which they can accurately validate the insurance details of their patients. This function can be executed before appointments are given to patients so that patient insurance is checked in batches every week.
In this way, you are in a better position to identify any issues before you meet your patients. You can use this advantage to communicate with them better and clarify all insurance matters.
Hospitals and clinics can also set up payment expectations from their patients. These expectations can reduce the instances of overdue payments by constantly revising the financial responsibility of your patients with them.
You may risk your accounts receivable if you do not keep a check on your patients and collect their co-pays. Your revenue may also take a hit if their insurers take longer to reimburse you after the medical services are availed.
You can also focus on establishing a collection process for your customer invoices. Such a process can quickly release your reimbursements so that you can quickly collect those payments. This outcome results in better accounts receivable management for you.
You can elevate your accounts receivable management by introducing an upfront payment system for your medical services. In this way, you are able to receive your reimbursements at the time of service and prevent post-appointment invoicing.
Healthcare organizations can send the cost estimates for their medical services to insurance companies. They are sent before patients avail themselves of the relevant healthcare procedures and treatments. This policy increases timely payments as patients are well-informed beforehand.
This process is one of the best ways to optimize your medical accounts receivable. You must constantly execute AR tracking for its logs and validate the relevant transactions. These methods open up new opportunities on their own for you to increase your revenue flow.
These opportunities can include new trends and practices that can be implemented on patients and their insurance providers. In this way, you can optimize the processing of your reimbursement claims and minimize the prevalence of overdue payments.
You can compare the duration of the accounts receivable of your patients. The comparison can be used to identify patients who have overdue payments. Moreover, you can also determine ways to decrease the duration of their accounts receivable.
The manual medical billing process of healthcare organizations is a major reason for the slow management of their AR process. It makes the AR billing process more time-consuming which increases the duration of your revenue cycle.
You may make more errors with the manual processing of your reimbursement claims. Hospitals and clinics can counter it by automating the process and extensively scrubbing their claims. Scrubbing minimizes organizational rejections and mistakes in the form of claim denials.
These benefits are also effectively received by insurance companies which are more likely to process your reimbursement claims.
This blog examined the intricacies of AR management in healthcare in detail. We comprehensively analyzed the steps involved in this process and the measures that can be taken to optimize it.
Our accounts receivable experts are specifically trained to manage the medical billing and reimbursement processes of healthcare organizations. Contact us today to learn the best ways to elevate our accounts receivable and streamline their management.
Accounts receivable management is a process implemented to manage outstanding medical reimbursements in medical terms. Patients and their insurers have to reimburse healthcare organizations for their treatments and procedures.
The role of accounts receivable management is to establish an effective credit policy that can minimize revenue losses. It manages credit lines which may get reduced if patients fail to make timely payments.
The five steps to managing accounts receivable in healthcare comprise setting up payment terms, monitoring reimbursement invoices and establishing strict payment policies. They also include resolving financial disputes with patients and offering alternative options to them.
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