Importance Of AR Management In Medical Billing
In the year 2021, the healthcare industry is in the place to deliver value-based care to their patients by considering the new regulations and healthcare policies. Today, healthcare experts and U.S medical billing organizations found it hard to come up with the new healthcare account receivable management challenges.
As the healthcare cost rise and patients with high-risk health plans increases, AR management has also become a big task. In this article let’s learn about accounts receivable management and its importance.
What Is Accounts Receivable?
Accounts Receivable (AR) is the money owed to healthcare providers or medical billing companies for the medical care rendered to patients. The accounts receivable process includes any amounts due from insurance companies, patients, or other guarantors.
How To Calculate AR Days?
The number of days in AR is a very helpful metric for analyzing whether or not your accounts receivable balance has grown too large relative to your gross charges. Days in AR is simply calculated as follows.
Days in AR = AR Balance / Avg Daily Gross Charges
You can calculate your average daily gross charges by dividing your total gross charges for the past year by 365, or your total gross charges from the past 6 months by 182.5. Because gross charges can fluctuate significantly from one month to the next, it’s always better to use a 6-12 month sample size.
Accounts Receivable Management
You may also doubt what is accounts receivable management? AR management is a process of collecting - re-filing the corrected claims, identifying denied/unpaid claims, reducing AR days, and eliminating aged account receivables. The main goal of accounts receivable management in healthcare is to maintain improved cash flow in a healthcare practice by reducing the collection period and the cost associated.
The Best Strategies For Effective AR Management
1.Manage Denials Correctly
Identifying the claim denials at the correct time is one of the important processes in Account Receivable management. Your billing team should be highly skilled and experienced to find out the reason behind claim rejection and re-fill without any delay. Also, it is very important to examine denial patterns and find exact solutions to reduce the future occurrence of denials.
Effective steps to improve claim denial management
- Understand the main reason for claim denials
- Streamline the denial management process
- Process claims without any delay
- Identify common healthcare claims denial trends
- Implement a claims denial log
- Make use of the best medical billing software for the denial management process
2.Timely AR follow up
Following up on the account receivables on a timely basis is necessary for improved cash flow. A good AR management team will keep track of all claims that have been filed effectively. Also, they will take immediate action if the claims are not paid within the 30-day time limit. The expert AR team will also be responsible for analyzing no underpayment or overdue payment.
As more patients are started using self-pay, the medical billing organizations had to rely more on the patients than the insurance companies for payments. In case of any outstanding balance, the AR management team will follow-up with the patients directly via phone calls or emails, so the delays will be reduced. A good provider-patient relationship is the main key to timely payments.
4.Periodical Audits And Reports
The best quality of a good AR management team is conducting audits frequently to learn areas of improvement, assess risks, check for problems, and more. As a next step, the team will submit a report on the audits conducted. The details include aging AR reports, outstanding payment reports, and more. These reports will help to analyze the payment details accurately and there are no future claim denials.
The Right Solution: Invest In a Best Billing Software
Today’s healthcare industry is fast-paced and to remain at the top, you should need to consider implementing a powerful medical billing software that can manage a lot from AR management to payment collections automatically.
Vozo medical billing software with the advanced accounts receivable management feature offers an easy way to establish baselines for how collections should be handled across each client. The key services include automated eligibility check, rejection lists, automated electronic claim rejection dashboard, patient balance and eligibility check, report generation, and more
The powerful billing software that works with automation has the potential to be a huge practice productivity boost to your accounts receivable management team. By setting up automated invoice processing, and account alerts, Vozo helps your team spends less time manually inputting data.
We are here to help you to improve your practice productivity