Medical accounts receivable (AR) are the funds owed to a medical practice or provider from patients, third-party payers, or other sources. As healthcare providers increasingly depend on billing for revenue, managing AR is becoming increasingly important. High levels of AR can reduce cash flow, create administrative challenges, and lead to increased bad debt write-offs.
How Can You Optimize Medical Billing and Payment Collection?
You can do a few things like establishing a solid billing process, hiring trained and experienced employees, utilizing billing software, negotiating payment plans, and educate patients on insurance policies. Also, employing medical account receivable services allow healthcare providers to streamline the process of billing and collecting payments from patients or payers. Other advantages include:
- Establishing patient payment plans and creating statements.
- Updating patient accounts with the latest billing information.
- Working with insurance companies and third-party payers to ensure proper reimbursement of claims.
- Generating reports for monitoring cash flow, AR aging, and other collections metrics.
- Auditing accounts receivable and providing feedback on how to improve processes.
- Resolving discrepancies between the charges submitted and the payments received.
- Analyzing financial data to determine trends and opportunities for improvement.
- Managing accounts receivable follow-up procedures.
What Are the Medical Accounts Receivable Problems and Their Solutions?
Medical accounts receivable problems are almost the same across healthcare service providers. So, there is a chance that you are currently dealing with one or more of them. Let us take a quick look at the most common medical AR problems and their solutions:
1. Aging Accounts Receivables
Problem: An aging AR will lead to cash flow issues and necessitate additional staff costs for collection efforts.
Solution: Aging accounts receivable is a common problem that medical practices face due to slow reimbursement from insurance companies and patients who are unable or unwilling to pay their bills. As a result, many practices now use automated systems and billing solutions that can help track outstanding payments and remind patients of overdue balances. Address the issue of aging A/R by regularly monitoring aged accounts receivable reports, utilizing automated systems for follow-up communications with patients, and consistently following up on unpaid claims.
2. Poor Payment Posting
Problem: When payments are entered incorrectly into the system, this leads to collection challenges and long-term accounts receivable issues.
Solution: Establish processes and internal controls to ensure payments are correctly entered into the system. Implement a quality control system to review payment entries regularly and provide training for staff on how to post payments accurately. In addition, revenue cycle management services can help streamline and optimize processes from patient admission to post-discharge account settlement.
3. Incorrect Coding
Problem: Incorrect coding can lead to delays in reimbursement, as many payers may reject claims that are incorrectly coded.
Solution: Ensure coding accuracy by employing certified coders and an auditing system to check for errors regularly.
4. Claims Denials
Problems: Denied claims can be a major obstacle in gathering payments from payers.
Solution: Reduce the number of denials by submitting clean and compliant claims. Analyze denial data to identify trends and improve coding, documentation, and billing practices.
5. Uninsured Patients
Problem: A high number of uninsured patients can also lead to long-term collection dilemmas.
Solution: Develop a policy for collecting payments from uninsured patients upfront or soon after services are rendered. Consider offering discounts or payment plans for those struggling to pay their bills. Additionally, consider partnering with organizations that assist uninsured patients.
6. Lack of Transparency
Problem: Many medical practices need more transparency regarding billing and payments, leading to patient confusion and frustration.
Solution: To ensure that your practice is transparent about billing, providing clear explanations of services and associated costs is essential. Additionally, consider providing online portals where patients can access their bills, view payment history, and make payments.
Managing medical accounts receivable can be a time-consuming and tricky task. But by staying organized, training your staff to appropriately process insurance information, utilizing the latest in healthcare technology, and having clear processes to follow from patient intake through reimbursement, you can maximize efficiency and minimize hassles associated with medical accounts receivable.