Accounts receivable management (AR) in healthcare is the management of payments due either from the insurance companies or the patients to physicians. These payments are for provider care services. It is important to manage these payments effectively and balance them all on time to avoid financial downfalls from revenue loss. The benefits of outsourcing account receivable are much more than sustaining regular cash flow from patients or insurance providers. Plus, outsourcing RCM services ensures avoiding AR accumulation – which would otherwise affect the practice’s financial goals.
The quality and efficiency of accounts receivable management are key requirements for keeping the monthly cash flow of a healthcare practice. Missing out on AR follow-ups can end up triggering revenue pitfalls, essentially affecting the continuity of the business. Effective and daily management of AR helps avoid AR aging of claims older than 60 days. The benefits of outsourcing account receivable also help keep your practice’s financial goals steady and profitable.
Most medical practices lose money due to a lack of comprehensive policies, procedures and even due to internal oversight control, which leads to loss of revenue. Some of the common reasons for practices losing revenue include:
In 2020, healthcare systems and hospitals in the USA faced a massive loss of over $202 billion in revenue. The figure comes close to $50.7 billion per month – according to AMA (American Hospital Association).
So, what is the solution?
One of the most effective ways healthcare practices address these challenges is by ensuring timely payments for the provided services. It can be done through close examination of days in A/R in addition to instigating appropriate measures for optimization. Doing so will not only help healthcare practices to establish solid foundations, but it will also set their course for long term financial success.
Many practices lack effective strategies to minimize or regularly address Accounts Receivable (AR). Ignoring AR claims and delaying their resolution can result in the accumulation of aging AR buckets, causing missed claim submission deadlines and reducing the likelihood of reimbursement. It’s essential to recognize that this accumulated revenue is vital for covering various expenses, such as staff salaries and business-related costs. Neglecting these financial responsibilities month after month can become intolerable and challenging to manage over time.
Furthermore, the implications of neglecting accounts receivable can be detrimental to a medical practice’s revenue. Outsourcing Account Receivable management to a reputable medical billing company offers a strategic solution. The benefits of outsourcing account receivable management include:
By embracing outsourcing, healthcare practices can work around the intricacies of billing more effectively and ensure sustained financial health.
The most common reason for denied claims is incorrect information. Be it by accident or intentionally, coding and billing errors are the most common reasons for claims denials due to incomplete, missing, or incorrect information.
It is a strategic process that aims to resolve and unmask problems that lead to claim denials.
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