Hospital accounts receivable (AR) is the money you’re owed by patients, insurance companies, or other payers for the care you’ve already provided. With so many rules and changes in the hospital billing domain, managing AR can be hard, but necessary. Late payments, denied claims, and underpayments are common and can hurt your finances. However, you can still safeguard your financial side. Wondering how? You need to understand what AR management is and the growing challenges, and then the vital strategies that you should implement to ensure a streamlined hospital accounts receivable solution.
Understand what hospital accounts receivable are:
The AR process starts when you send a bill to the patient or a claim to the insurance company. Once payment is received, the account is cleared. It’s best to submit a claim within 72 hours after the service. But if payments are delayed and bills pile up, your days in AR go up. Days in AR means the average time it takes to get paid. It’s an important number that shows how healthy your finances are and where you can improve.
Days in AR is the total money you are owed divided by your average daily charges. It shows how many days it takes, on average, to get paid. The American Academy of Family Physicians (AAFP) says it should be less than 50 days. But it’s better if it stays between 30 to 40 days. Tracking Days in AR helps you see how fast you collect payments. It also helps you find ways to improve collections and boost your revenue.
Unfortunately, managing hospital accounts receivable is not a cakewalk because of the growing challenge of claim denials and delayed reimbursements. The following are some recent statistics that you must be aware of.
Recent statistics related to challenges in hospital accounts receivable services:
Claim denials and delays are a major issue. Over 37% of providers are waiting on $25,000–$100,000, and 32% are owed more than $100,000, according to PYMNTS. The Working Capital Tracker also said that 30% of providers have seen more denials since the pandemic ended. Data from over 1,800 hospitals and 200,000 doctors showed that one in three inpatient claims to commercial insurers went unpaid for over three months. Also, 15% of both inpatient and outpatient claims were denied at first.
Fortunately, you can still reduce your days in AR and improve your overall revenue model by implementing the steps mentioned below-
5 Vital steps to ensure perfect hospital accounts receivable service:
1) Proper verification of insurance eligibility:
Accurate insurance info helps you know what a patient’s plan covers and what they need to pay. Insurance verification specialists check the insurance, contact details, and other info before the visit. This confirms coverage and shows what the insurance will pay. It also helps find out what the patient needs to pay. Updating records before the appointment makes sure everything is correct and shows if any amount is already due.
2) Capture your charges accurately:
Capturing all services provided to a patient is the important step in managing accounts receivable (AR) in healthcare. Every procedure, test, or treatment must be recorded clearly. Doctors and nurses should enter these details into the electronic health record (EHR). This is called charge capture. It turns medical services into billable items. For example, let’s say a patient comes in for chest pain. The doctor performs an EKG, gives medication, and orders blood tests. If only the EKG is recorded and not the rest, the hospital won’t get paid for the medication or lab work. That’s a loss in revenue. But if everything is entered correctly into the EHR—EKG, medication, lab tests, and diagnosis—each service can be billed properly. Good charge capture ensures the patient’s bill is correct. It also helps your practice get paid faster and the right amount.
3) Submit clean claims:
Submitting claims on time and with correct details is very important. Accurate coding and full documentation help prevent rejections. Skilled coders use the right diagnosis, treatment codes, and modifiers. Before sending claims, you must perform the claim scrubbing process. It checks for mistakes like wrong codes, missing info, typos, or duplicate charges. Scrubbing helps fix these issues early and lowers the chance of denials or delays. It also makes sure the claim follows rules like HIPAA. Many practices use claims scrubbing software to check claims before sending them to insurance.
4) Patient education and follow-up:
After insurance pays, the remaining balance is billed to the patient. Clear communication is important to manage overdue bills. Help patients understand their insurance and what they owe. Share a simple payment policy. It should explain due dates, who must pay, co-pays, deductibles, payment methods, and rules for fees, refunds, and collections. To reduce AR days, collect payments during visits, send bills quickly, and offer easy payment options. Check AR aging reports often, follow up on unpaid bills, and plan how to manage both fast payers and those with big balances.
5) Follow-up on denied claims:
Your AR team should know how to fix denied claims and resubmit them to get payment. They need to look for what caused the delay and take steps to fix it. To get paid faster, you need to find what’s slowing down reimbursements. This helps spot slow payers and those who deny claims often. A revenue cycle management company can help with this. They give monthly AR reports that show what is owed and what hasn’t been collected. They also keep track of claims, fix issues, and send them again if needed.
The reality is that most mid-sized and small hospitals lack professional experts who can efficiently implement the above-mentioned steps. Are you also one of them? You can simply hire a professional hospital accounts receivable company.
Outsourcing AR management can help reduce your workload. Specialized companies handle the process and improve your cash flow. They help you collect payments faster. Experts use advanced mechanisms to speed up tasks and cut down on manual work. This saves time and reduces errors. They also find and fix issues before claims are sent. This increases the chances of claims getting approved the first time. It also lowers the cost of rework. With timely payments and fewer unpaid bills, AR specialists make your revenue cycle stronger.
So, what are you waiting for? Partner with a hospital accounts receivable solution and keep your revenue foundation strong!
