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Did you know receivable management services increasingly contribute to the revenue of hospitals? They ensure that you do not miss out on any overdue payment for your medical services.
This blog is a guide on how you can optimize your revenue through these services. We will discuss each aspect of implementing accounts receivable management in detail. Continue reading further to find out if you can assess its services and outsource it.
In addition, maximize your healthcare revenue with reliable receivable management services, providing accurate and efficient billing solutions. Find out how to improve your financial performance.
What Is Receivables Management?
Receivables are the pending payments of hospitals from their patients. Accounts receivable include the money owed by patients for their treatments. You can manage your accounts receivable to track such payments.
You can consider receivables management as getting services on credit. Patients get medical treatments and do not pay for them upfront. Many third parties provide services to manage these debt collection processes.
Hospitals also have to follow up on any pending payments and their accounts. There are certain systematic approaches that manage receivables. These approaches ensure timely collections and healthy patient relationships.
Furthermore, unlock the potential of accounts receivable automation to revolutionize your business operations. By automating repetitive tasks and accelerating invoice processing, you can improve accuracy and shorten payment cycles.
Why Are Receivable Management Services Necessary?
Receivables management services are necessary to effectively run medical services. They determine the cash inflow of hospitals. You can also estimate the revenue generated from them. Payment delays from the patient’s end lead to cash flow shortage.
So, you must efficiently manage your accounts receivable to prevent major financial issues. These services can also increase your profits through hospital revenue. They extend credit options to patients so they get your services.
This extension creates a healthy doctor-patient relationship. You can also install these services to attract investors. They can see your ability to collect pending payments. Investors usually use that information to assess a company’s credit record.
There are many elements of efficient receivables management. They involve insurance eligibility verification. Hospitals also have to maintain positive patient relationships. You have to quickly track any late payments. You should settle them as soon as possible.
Types of Accounts Receivable Management Services
There are two types of accounts receivable management services. They include skip-tracing services and third-party management.
1. Skip-Tracing Services
You can install these services for your patients who have pending payments. They can be running away from paying or may have changed their details. Skip-tracing uses special databases and tools.
These resources can easily identify such patients and extract payments from them. The implementation of skip-tracing services is important for your receivable management. They are ideal for patients who are hard to find.
Skip tracers are the staff employees assigned to these services. They check online sources and talk to the neighbors of such patients. They only have to locate these debtors and collect your medical payments.
2. Third-Party Management
This service outsources your receivable management to external agencies. These agencies manage your day-to-day operations. Such operations mostly include reconciling follow-ups and invoicing. This way, you can easily complete your third-party management. You have more free time as third-party agencies manage your medical processes. Doctors can consider these agencies helpers.
These helpers collect your overdue payments for you. You do not have to manage these collections all alone. Your helpers first use the easy way to get your payments. They act as a middle entity and try to keep everything sorted.
You can treat them as friendly teammates who manage your tough job. Still, you may prefer skip-tracing if receivable management is not a problem for you.
Problems Of Outsourcing Your Receivable Management Services
Various problems can arise as a result of outsourcing receivable management services. These services can result in complicated communication and costly contract lock-ins. Your medical processes may also distance away from your patients.
This distancing is also likely to reduce the privacy of your patients. Some dependability and consistency issues can also arise from outsourcing receivable management.
1. Complicated Control And Communication
Receivable management services are usually outsourced to third-party service providers. These providers add another layer of control and communication.
You are at one end of this workflow, and your patients are on the other. These providers are between you and your patients. This addition usually complicates the workflow.
This complication is likely to affect your control and communication channels. These complications cause delays and misunderstandings between doctors and their patients. The medical issues of your patients also remain unsolved.
2. Costly Contract Lock-Ins
Many third-party entities need long contract terms for outsourcing projects. You may have to pay financial penalties if you break such contracts. So, you must always start by deciding your long-term ability and plans. After this process, you can enter into agreements with those entities.
3. Distancing Medical Processes
Outsourcing receivable management can distance your services away from your patients. This becomes likely if your outsourcing project includes any form of debt collection. Such outsourcing projects can also compromise the quality of your patient relationships. The reputation of your hospital can also be affected.
4. Reduced Patient Privacy
Sharing patient data is part of outsourcing receivable management services. You have to share those details with third-party entities. This process often raises privacy concerns from patients.
There have to be strong measures set to protect patient data. These measures should be enough to ensure compliance with data privacy laws.
5. Dependability and Consistency Issues
The quality of outsourced services always remains uncertain. They can undergo many variations between hospitals and third-party entities. These variations cause issues like delayed collections, inconsistent follow-up, and inaccurate reporting.
These issues undermine the advantages of outsourcing. You can vet prospective third-party entities to prevent these dependability and consistency issues. Hospitals can ensure dependable and consistent medical services.
Roles And Responsibilities of Accounts Receivable Manager
An accounts receivable manager can have various roles and responsibilities. They are also supposed to fulfill certain requirements and have specific skill sets.
1. Roles Of Accounts Receivable Manager
You can expect an accounts receivable manager to set daily objectives for their team. These objectives should match the financial goals of the hospital. They should also check the processes of generating billing invoices for healthcare services.
A manager also ensures the timely collection of payments for their accounts receivable. They have an important job to handle the financial operations of hospitals. They should also keep track of which patients owe them money.
Accounts receivable managers discuss overdue payments with their patients. The aim of these discussions is to sort out their financial issues. It is their job to collect and record all the payments. They also answer the financial questions of their team and keep things smooth.
2. Responsibilities Of Accounts Receivable Manager
An accounts receivable manager can have versatile responsibilities for hospitals. They are primarily responsible for setting medical objectives for their team. These objectives should align with the billing goals of hospitals.
You can also expect your receivable managers to conduct credit checks. They may also have to negotiate with patients about their non-payment cases. Forecasting reports are additionally required for accounts receivable management.
Accounts receivable managers can prepare quarterly, monthly, ad-hoc, and annual reports. They should also record and organize the deposits and bills of their hospitals. This way, they can execute high-quality financial procedures that follow industry standards.
Moreover, your accounts receivable managers should support and train new team members. They can check whether those members are following the set accounting principles. New employees should also be aware of the industry updates.
3. Requirements And Skills Of Accounts Receivable Manager Jobs
An accounts receivable manager should have prior work experience in the same field. You can consider them if they have worked before on accounting software. They should be familiar with advanced MS Excel formulas. Many hospitals prefer top-notch analytical skills.
You may also look into the managers who can handle detailed financial reports. They must have the skills to negotiate and manage teams and process numerical data. Accounts receivable managers have to be keen on maintaining patient confidentiality.
Educational requirements are not mandatory. A BSc degree in Finance or Accounting is the best choice. Moreover, students with a CPA certification are likely to progress further.
Pros and Cons of Accounts Receivable Management Services
Outsourcing accounts receivable has its fair share of advantages and disadvantages. It is like any other business decision and offers a bunch of benefits.
1. Industry-Specific Expertise
You can gain industry-specific expertise from your accounts receivable management services. Their skills and knowledge equip you with effective financial practices.
Doctors can also become experts in accounts receivables. They can also look into any billing and invoicing issues.
2. Time-Saving
Also you can also outsource your services to free up your time. You can use that time for other important operations. This way, you do not have to chase your patients for overdue payments.
3. Consistent Cash Flow
Effective accounts receivable management also ensures a consistent cash flow. You can professionally handle your payments for a regular flow. These practices can enable you to efficiently conduct financial planning.
4. Maintaining Patient Relationships
Accounts receivables also help hospitals maintain their patient relationships. You can use a third-party entity to manage overdue payments.
Whereas you can focus on improving patient satisfaction. You do not have to confront your patients yourself about their pending payments.
5. Advanced Tools And Software
Hospitals can also get access to certain advanced tools. They can integrate these tools into their practices. There is specific software available as well that you can use.
You can also use these tools and software. They can report, track, and analyze your accounts receivables data through reporting and analytics.
But, you must factor in the drawbacks as well to paint the full picture.
6. Cost Implications
You will have to pay certain commissions and fees to engage with third-party entities. Hospitals regularly have to conduct a cost-benefit analysis.
This analysis evaluates whether your benefits are worth the incurred costs. Outsourcing projects are generally more affordable than providing on-site projects.
7. Lack of Direct Control
You can get regular updates from third-party entities in outsourcing projects. But, you may be unable to control the day-to-day handling of your receivable management. This inability can raise some concerns for certain hospitals.
8. Data Security Concerns
The third-party entities in outsourcing projects are external entities. Handing over patient data to them to execute receivable management services is risky.
There can be various data breaches that can pose a serious threat to your patients. So, you should direct your outsourcing entities to install strong security measures.
9. Miscommunication
Hospitals have to constantly send their accounts receivable needs to outsourcing entities. These needs are mostly about specific patient cases. They can easily get lost in translation and cause discrepancies in communication.
10. Dependency
You may become overly reliant on third-party entities. This increase in dependency can create a knowledge gap among your team members. This way, hospitals have to regularly consult with those entities.
Will Credit Collection Services Pay For Delete?
Patients in debt often use “Pay for Delete” to negotiate with a credit collection service. The aim is to remove a negative entry in exchange for payment. This negative entry results from overdue payments for medical treatments.
But, the “Pay for Delete” practice is not universal. Some credit collection services may not accept it. They have to adhere to the set industry guidelines. Those guidelines prohibit the removal of negative entries from credit reports.
Such patients have to search collection services that install “Pay For Delete.” But, they must record all agreed points in an agreement before they make any payments. There can be implications for pursuing this practice if not executed accurately.
The Bottom Line
This blog covered receivable management services as a means to optimize medical revenue. We initially focused on their importance and steps. Then, the blog moved on to the problems of outsourcing these services.
We also analyzed their managerial roles and responsibilities and some pros and cons. Finally, we discussed whether credit collection services accept the “Pay for Delete” practice.
The medical professionals at Health Quest Billing specifically deal with receivable management services. Contact us today to learn how you can put them in place to optimize your revenue.