Accounts receivable is the total amount of money that your hospital owed for the services given. Accounts receivable are the vital components of your hospital’s overall financial foundation because it is the amount that you truly deserve. As your hospital caters to both inpatients and outpatients, you must understand the differences between the two accounts receivable types and why the delinquent accounts accumulated from inpatient services need more attention from your side.
To understand the differences between inpatient and outpatient accounts receivable in your hospital, you need to know the definition of both AR types.
Definitions of Outpatient And Inpatient Hospital Accounts Receivable:
What is Inpatient Hospital Accounts Receivable?
Hospital accounts receivable is the money your hospital is waiting to receive for services already provided. The majority of inpatient services that you provide to your patients are expensive. Here is why: a patient comes to your emergency room, gets admitted, has surgery, receives medication, and stays in the ICU. Each step involves different departments and billing tasks. The hospital sends the bill to Medicare, Medicaid, or private insurance after the patient is discharged. But payment can take weeks—or even months—to arrive.
What is Outpatient Accounts Receivable?
Outpatient Accounts Receivable is different. It refers to the money your outpatient centers are owed. These services are usually smaller and quicker. One of your patients may need an X-ray for a particular diagnosis. The visit is short. The documentation is less complicated. The claim is processed faster.
Outpatient Accounts Receivable usually means lower dollar amounts and simpler billing. These claims often get paid faster than typical inpatient claims.
Here is a quick comparison between Inpatient and outpatient accounts receivable:
| Feature | Hospital AR | Outpatient AR |
|---|---|---|
| Claim size | High | Low to moderate |
| Coding complexity | Very high | Moderate |
| Service Cycle | Days to weeks | Same day |
| Department involved | Many | Few |
| Urgency for follow-up | Extremely high | High |
Why inpatient Hospital accounts receivable services are more crucial than outpatient AR:
Let’s break down why hospital inpatient accounts need top priority.
1. High Dollar Value
Hospitals deal with large claims. One surgery could cost tens of thousands of dollars. If a claim is denied or delayed, the hospital loses a lot of money. Outpatient claims are smaller, so the financial impact of a single delay is lower.
2. More Complex Claims
Hospital billing includes services from different departments. For example, the ER, lab, radiology, surgery, and pharmacy may all be involved in one patient’s care. Each department adds codes, notes, and charges. One mistake can cause a denial.
Outpatient claims are more straightforward. There is usually one service and one provider. Fewer steps mean less room for errors.
3. Longer Reimbursement Time
Hospital claims take longer to process. There are more codes, more reviews, and more steps in the approval process. The time between patient discharge and payment can be long.
In outpatient care, the claim is often submitted and paid within a few weeks, sometimes even sooner than a week.
4. Impact on Hospital Operations
Inpatient departments have higher operational costs. They have more staff, more equipment, and larger facilities. When AR is delayed, it affects cash flow. Hospitals may struggle to pay staff or buy supplies. This can impact patient care.
Outpatient centers have lower costs. They can survive short payment delays more easily.
5. Risk of Denials and Write-Offs
Hospitals are at higher risk of denied claims in their inpatient departments. Because the services are complex, payers look closely at each detail. Missing a code or failing to document a step can lead to a denial.
When inpatient claim denials pile up, hospitals may have to write off large amounts. That is money they will never get back. Outpatient denials happen, too, but the amounts are smaller and easier to rework.
Read More:
The Perfect Hospital AR Management- 7 Proven Strategies to Implement
Learn how Ellwood City Hospital’s AR backlog led to financial struggles and discover key strategies to manage hospital accounts receivable for better cash flow.
You would be able to understand the impact of Accounts receivable on your hospital’s financial structure better when you compare it with the outpatient side-
Real-World Impact:
Imagine the situation; if your hospital has $100,000 in an accounts receivable bucket that is more than 90 days old, you cannot count it as your revenue as this money has still not hit your bank account.
Instead, it’s stuck in payer review or missing documentation. The hospital now faces cash flow problems. It may delay investments, cut staff, or borrow money to stay afloat.
Compare that with a busy outpatient center with $50,000 in accounts receivable. The volume is high, but most claims are paid quickly. They don’t face the same financial pressure.
Vital steps to improve hospital accounts receivable:
- Track aging buckets: Focus on claims older than 60 or 90 days.
- Assign accounts receivable follow-up teams: Make sure someone is chasing every unpaid claim.
- Fix denial reasons: Review patterns and fix root causes.
- Invest in training: Make sure billing and coding staff know the latest rules.
- Use automation: Use technology to flag issues early.
- Outsource if needed: Sometimes, an outside accounts receivable team can work faster and better.
However, the majority of hospitals cannot afford to handle two separate teams of accounts receivable specialists to handle inpatient and outpatient accounts receivable, respectively. If you are one of them, you can simply hire an expert hospital accounts receivable company to work on your delinquent accounts. Experienced accounts receivable specialists know how to keep track of aged accounts receivable, follow up on them, and get the maximized payments from those accounts within the shortest period of time, thus ensuring an excellent fiscal foundation and the utmost peace of mind.
