{"id":418,"date":"2024-05-07T15:56:04","date_gmt":"2024-05-07T15:56:04","guid":{"rendered":"https:\/\/medibillmd.com\/blog\/?p=418"},"modified":"2024-09-25T11:54:44","modified_gmt":"2024-09-25T11:54:44","slug":"accounts-receivable-in-healthcare","status":"publish","type":"post","link":"https:\/\/medibillmd.com\/blog\/accounts-receivable-in-healthcare\/","title":{"rendered":"What is Accounts Receivable (A\/R) in Healthcare and How to Improve It?"},"content":{"rendered":"\n<p>Healthcare facilities struggle to stay profitable amidst reimbursement cuts and ever-evolving regulations. A\/R, or accounts receivable in healthcare, is one of the many metrics that need constant monitoring to avoid flushing your rightful payments down the drain.<\/p>\n\n\n\n<p>This comprehensive guide will explore it in detail. We will start by discussing what is A\/R and what are its key components to establish a basic understanding. Then, we will clear the confusion between accounts payable and accounts receivable by discussing their differences.<\/p>\n\n\n\n<p>Moving forward, we will build on the details by discussing the A\/R process, what common challenges you may encounter while trying to manage it, and some strategies to help you become better at keeping your days in A\/R short for better financial health.<\/p>\n\n\n\n<p>So, without further ado, let\u2019s get started!<\/p>\n\n\n\t\t\t\t<div class=\"wp-block-uagb-table-of-contents uagb-toc__align-left uagb-toc__columns-1 uagb-toc__collapse uagb-block-cc991a58      \"\n\t\t\t\t\tdata-scroll= \"1\"\n\t\t\t\t\tdata-offset= \"30\"\n\t\t\t\t\tstyle=\"\"\n\t\t\t\t>\n\t\t\t\t<div class=\"uagb-toc__wrap\">\n\t\t\t\t\t\t<div class=\"uagb-toc__title\">\n\t\t\t\t\t\t\t<strong>Table Of Contents<\/strong>\t\t\t\t\t\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 384 512\"><path d=\"M192 384c-8.188 0-16.38-3.125-22.62-9.375l-160-160c-12.5-12.5-12.5-32.75 0-45.25s32.75-12.5 45.25 0L192 306.8l137.4-137.4c12.5-12.5 32.75-12.5 45.25 0s12.5 32.75 0 45.25l-160 160C208.4 380.9 200.2 384 192 384z\"><\/path><\/svg>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"uagb-toc__list-wrap \">\n\t\t\t\t\t\t<ol class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#what-is-accounts-receivable-ar-in-healthcare\" class=\"uagb-toc-link__trigger\">What is Accounts Receivable (A\/R) in Healthcare?<\/a><ul class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#key-components-of-account-receivables-in-healthcare\" class=\"uagb-toc-link__trigger\">Key Components of Account Receivables in Healthcare<\/a><\/li><\/ul><\/li><li class=\"uagb-toc__list\"><a href=\"#difference-between-accounts-receivable-and-accounts-payable-in-healthcare\" class=\"uagb-toc-link__trigger\">Difference Between Accounts Receivable and Accounts Payable in Healthcare<\/a><li class=\"uagb-toc__list\"><a href=\"#accounts-receivable-process-in-healthcare\" class=\"uagb-toc-link__trigger\">Accounts Receivable Process in Healthcare<\/a><ul class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#step-1-establish-credit-terms\" class=\"uagb-toc-link__trigger\">Step # 1 &#8211; Establish Credit Terms\u00a0<\/a><li class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#step-2-information-collection-for-invoicing\" class=\"uagb-toc-link__trigger\">Step # 2 &#8211; Information Collection for Invoicing<\/a><li class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#step-3-send-invoices-to-patients\" class=\"uagb-toc-link__trigger\">Step # 3 &#8211; Send Invoices to Patients<\/a><li class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#step-4-follow-up-and-track-payments\" class=\"uagb-toc-link__trigger\">Step # 4 &#8211; Follow-up and Track Payments<\/a><\/li><\/ul><\/li><\/ul><\/li><li class=\"uagb-toc__list\"><a href=\"#accounts-receivable-challenges-in-healthcare\" class=\"uagb-toc-link__trigger\">Accounts Receivable Challenges in Healthcare<\/a><ul class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#challenge-1-higher-claim-denial-rate\" class=\"uagb-toc-link__trigger\">Challenge # 1 &#8211; Higher Claim Denial Rate<\/a><li class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#challenge-2-excessive-write-offs\" class=\"uagb-toc-link__trigger\">Challenge # 2 &#8211; Excessive Write-offs<\/a><li class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#challenge-3-slower-reimbursement-process\" class=\"uagb-toc-link__trigger\">Challenge # 3 &#8211; Slower Reimbursement Process<\/a><li class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#challenge-4-collecting-overdue-patient-payments\" class=\"uagb-toc-link__trigger\">Challenge # 4 &#8211; Collecting Overdue Patient Payments<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><li class=\"uagb-toc__list\"><a href=\"#how-to-improve-healthcare-accounts-receivable\" class=\"uagb-toc-link__trigger\">How to Improve Healthcare Accounts Receivable?<\/a><ul class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#tip-1-streamline-insurance-verification\" class=\"uagb-toc-link__trigger\">Tip # 1 &#8211; Streamline Insurance Verification<\/a><li class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#tip-2-payment-estimates-and-up-front-payments\" class=\"uagb-toc-link__trigger\">Tip # 2 &#8211; Payment Estimates and Up-front Payments<\/a><li class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#tip-3-proactively-track-claims\" class=\"uagb-toc-link__trigger\">Tip # 3 &#8211; Proactively Track Claims<\/a><li class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#tip-4-automate-your-claim-process\" class=\"uagb-toc-link__trigger\">Tip # 4 &#8211; Automate Your Claim Process<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><li class=\"uagb-toc__list\"><a href=\"#outsource-ar-management-to-medibillmd-your-ultimate-rcm-partner\" class=\"uagb-toc-link__trigger\">Outsource A\/R Management to MediBillMD &#8211; Your Ultimate RCM Partner<\/a><ul class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#expertise-and-technology\" class=\"uagb-toc-link__trigger\">Expertise and Technology<\/a><li class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#higher-reimbursements\" class=\"uagb-toc-link__trigger\">Higher Reimbursements<\/a><li class=\"uagb-toc__list\"><li class=\"uagb-toc__list\"><a href=\"#scalability-and-flexibility\" class=\"uagb-toc-link__trigger\">Scalability and Flexibility<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><li class=\"uagb-toc__list\"><a href=\"#conclusion\" class=\"uagb-toc-link__trigger\">Conclusion<\/a><\/ul><\/ul><\/ul><\/ul><\/ul><\/ol>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is Accounts Receivable (A\/R) in Healthcare?<\/strong><\/h2>\n\n\n\n<p>Accounts receivable in healthcare are the outstanding payment for the rendered care services owed to the healthcare practitioner by the patient or the insurance company. Simply put, it is the amount of money yet to be paid by the patients, government payers, or private insurance companies to the provider.<\/p>\n\n\n\n<p>They play an integral role in <strong>revenue cycle management (RCM)<\/strong>Medical Billing by directly affecting the healthcare organization&#8217;s sustainability and financial health.<\/p>\n\n\n\n<p>Besides, it is a financial metric that enables providers to oversee revenue streams for a steady cash flow. It defines the unreceived but recognized revenue and is recorded as a current asset in the statement of financial position. It constantly changes as providers perform new care services for patients while reimbursements, write-offs, and adjustments are made to the billing.<\/p>\n\n\n\n<p>Accounts receivable in healthcare RCM are categorized based on age, typically in 30-day buckets:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>1-30 days<\/li>\n\n\n\n<li>31-60 days<\/li>\n\n\n\n<li>61-90 days<\/li>\n\n\n\n<li>91-120 days<\/li>\n\n\n\n<li>120+ days<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Key Components of <\/strong><strong>Account Receivables in Healthcare<\/strong><\/h3>\n\n\n\n<p>Healthcare RCM is a complicated topic, and understanding the accounts receivable is nothing short of a challenge. Thus, to make things more digestible, here\u2019s a breakdown of all the components it involves:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Charges &#8211; <\/strong>These represent the amount billed to the patient or the insurance company and reflect the fee schedule or payment negotiated rates between the payer and the healthcare provider.<\/li>\n\n\n\n<li><strong>Payments &#8211;<\/strong> They represent the actual reimbursements received from the patient or the insurance payer. They can be patient payments, insurance reimbursements, or government payments.&nbsp;<\/li>\n\n\n\n<li><strong>Adjustments &#8211; <\/strong>These refer to the reductions in the billed charges due to write-offs, discounts, or contractual agreements.&nbsp;<\/li>\n\n\n\n<li><strong>Denials &#8211;<\/strong> They occur when an insurance firm refuses to pay against a medical claim. There can be several reasons for claim denial, including lack of medical necessity, coding inefficiencies, inadequate documentation, and out-of-network claims submissions. Provider should appeal to these to ensure they get paid rightfully for their rendered care services.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Difference Between Accounts Receivable and Accounts Payable in Healthcare<\/strong><\/h2>\n\n\n\n<p>Are you confused about the difference between accounts payable and accounts receivable in healthcare? Here\u2019s a quick breakdown of the differences to help you get started and stay on top of both numbers for a healthier RCM.<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table><thead><tr><th class=\"has-text-align-left\" data-align=\"left\"><\/th><th class=\"has-text-align-left\" data-align=\"left\"><strong>Accounts Payable<\/strong><\/th><th class=\"has-text-align-left\" data-align=\"left\"><strong>Accounts Receivable<\/strong><\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Origin<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\">It originates from the purpose of buying goods\/services on credit from suppliers, vendors, and other creditors.<\/td><td class=\"has-text-align-left\" data-align=\"left\">It originates from providing healthcare services to patients.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Meaning<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\">It is the money the healthcare facility owes to its suppliers and vendors.&nbsp;<\/td><td class=\"has-text-align-left\" data-align=\"left\">It is the money patients or insurance companies owe to the practice.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Classification<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\">It is classified as a current liability.<\/td><td class=\"has-text-align-left\" data-align=\"left\">It is classified as a current asset.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Types<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\">It can be categorized into wages payable, interest payable, sales tax payable, trades payable, and loans payable.<\/td><td class=\"has-text-align-left\" data-align=\"left\">It can be categorized into notes receivables, and trade accounts receivables, etc.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Offset Allowance<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\">It has no offset.<\/td><td class=\"has-text-align-left\" data-align=\"left\">It may have offset against doubtful accounts.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Impact on Cash Flow<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\">It results in cash outflow on the cash flow statement.<\/td><td class=\"has-text-align-left\" data-align=\"left\">It results in cash inflow on the cash flow statement.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Responsibility<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\">The healthcare facility is responsible for it.<\/td><td class=\"has-text-align-left\" data-align=\"left\">The patient or insurance payer is responsible for it.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Audits<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\">Auditing accounts payable involves monitoring the general ledger, vendor invoices, and purchase orders.<\/td><td class=\"has-text-align-left\" data-align=\"left\">\n                    Account receivable auditing includes overseeing doubtful accounts, company invoices, cash receipts, general ledger, shipping logs, and credit memos. From a medical billing perspective, it involves monitoring the\n                    remaining payments payable by insurance payers or patients.\n                <\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Examples<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\">\n                    <ul>\n                        <li>A healthcare facility purchases new equipment and office supplies, such as stationery, computers, etc.<\/li>\n                        <li>A plastic surgery practice purchases a Stryker bone surgery drill and saw system.<\/li>\n                        <li>A healthcare organization takes professional accounts receivable management in healthcare services from a professional RCM company.<\/li>\n                        <li>A hospital gets a bank loan to expand its facility by building a new wing.<\/li>\n                    <\/ul>\n                       \n                <\/td><td class=\"has-text-align-left\" data-align=\"left\">\n                    <ul>\n                        <li>A practice bills patients for rendered care services.<\/li>\n                        <li>A healthcare equipment manufacturer delivers an ultrasound machine to the hospital.<\/li>\n                    <\/ul> \n                <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Accounts Receivable Process in Healthcare<\/strong><\/h2>\n\n\n\n<p>Even though there are some aspects of the accounts receivable in the US healthcare that are distinct from other sectors, the overall process remains the same:<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><\/div>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step # 1 &#8211; Establish Credit Terms&nbsp;<\/strong><\/h3>\n\n\n\n<p>The process initiates with the healthcare organization deciding whether they will extend the line of credit to the patient based on their insurance eligibility and benefits verification. It is also an important practice in the medical billing process to avoid claim denials. If the patient is approved to receive care services on credit, then the practice manager must establish clear payment terms.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step # 2 &#8211; Information Collection for Invoicing<\/strong><\/h3>\n\n\n\n<p>The second step is to collect all the necessary information for invoicing, like details about the care services, their medical necessity, patient&#8217;s details, etc. Missing or incorrect information is another main reason leading to medical claim denials.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step # 3 &#8211; Send Invoices to Patients<\/strong><\/h3>\n\n\n\n<p>The third step in the A\/R process is to send out the patient statement to the patient detailing the charges against the care services, insurance coverage details, and any remaining balances they owe to the provider. Sometimes, the statement is also sent to the insurance payer if there are discrepancies or outstanding balances.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step # 4 &#8211; Follow-up and Track Payments<\/strong><\/h3>\n\n\n\n<p>The accounts receiver officer (ARO) is responsible for follow-ups and tracking each payment to ensure a steady cash flow. It involves monitoring outstanding balances, initiating follow-up communications, and resolving discrepancies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Accounts Receivable Challenges in Healthcare<\/strong><\/h2>\n\n\n\n<p>A\/R is a key metric in the RCM process and comes with its fair share of challenges. But by managing it and keeping the days to a satisfactory number, practices can avoid bumpy roads ahead. Some of these challenges are discussed below:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Challenge # 1 &#8211; Higher Claim Denial Rate<\/strong><\/h3>\n\n\n\n<p>Frequent claim denial by third-party and government payers is the prevailing issue faced during the A\/R recovery process. It delays payments and affects the practice&#8217;s financial health. Payers may even reject claims due to missing information, late filing of a claim, duplicate submissions, coding errors, etc.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote has-background has-medium-font-size is-layout-flow wp-block-quote-is-layout-flow\" style=\"background-color:#0f75a812\">\n<p><strong><em>32% of hospital reimbursement leaders believe coding errors are the top reason for claim denials. Contrarily, 30% say it is a lack of medical necessity, 20% believe ineffective front-office dealing, and 18% mentioned clinical validation as the root cause behind the higher denial rate.<\/em><\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/www.healthcarefinancenews.com\/news\/more-30-hospitals-are-near-danger-zone-denial-rates\" rel=\"nofollow noopener\" target=\"_blank\"><strong><em>Healthcare Finance<\/em><\/strong><\/a><\/p>\n<\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Challenge # 2 &#8211; Excessive Write-offs<\/strong><\/h3>\n\n\n\n<p>Writing off unpaid charges is just like leaving money on the table. Sometimes, writing off payments is a necessary evil. However, if you unnecessarily write off payments, that you can recover through effective A\/R management, you will strain your practice&#8217;s revenue cycle.&nbsp;<\/p>\n\n\n\n<p>Thus, your billing office must follow a streamlined process for A\/R recovery. Simply billing patients and payers and expecting them to pay is not enough. Remember! Without stringent procedures for payment collection, reducing write-offs is a lost cause. Unnecessary write-offs will be reported as financial losses for the facility, leading to bad debts.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote has-background has-medium-font-size is-layout-flow wp-block-quote-is-layout-flow\" style=\"background-color:#0f75a812\">\n<p><strong><em>In 2022, 41% of adults in the US had some healthcare debt. Besides, 14 million adults owed more than $1,000, and 3 million owed more than $10,000 in medical debt.<\/em><\/strong><\/p>\n<cite><a href=\"https:\/\/www.healthsystemtracker.org\/brief\/the-burden-of-medical-debt-in-the-united-states\/\" rel=\"nofollow noopener\" target=\"_blank\"><strong><em>Health System Tracker<\/em><\/strong><\/a><\/cite><\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Challenge # 3 &#8211; Slower Reimbursement Process<\/strong><\/h3>\n\n\n\n<p>A slower insurance reimbursement process negatively impacts a healthcare facility&#8217;s cash flow. This issue has a more adverse effect on small practices where resources are limited, specifically financial ones.&nbsp;<\/p>\n\n\n\n<p>Typically, insurance firms take longer to process claims due to administrative delays and backlogs. However, practices can expedite this process by monitoring outstanding claims and regular follow-ups with the payer.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Challenge # 4 &#8211; Collecting Overdue Patient Payments<\/strong><\/h3>\n\n\n\n<p>Another challenge, adding to the complexity of A\/R recovery is the rise in patient responsibility, which requires practices to chase patients directly to collect payments, not just the insurance firms. It puts the practice in a difficult situation as most patients struggle to understand their financial obligations and how their insurance coverage works.&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote has-background has-medium-font-size is-layout-flow wp-block-quote-is-layout-flow\" style=\"background-color:#0f75a812\">\n<p><strong><em>A 2023 research study found that in 2022, patient out-of-pocket spending increased by 6.6% to $471.4 billion on average.<\/em><\/strong><\/p>\n<cite><a href=\"https:\/\/www.cms.gov\/newsroom\/fact-sheets\/national-health-expenditures-2022-highlights#:~:text=Federal%20Medicaid%20spending%20increased%2010.8,growth%20of%2011.0%25%20in%202021.\" rel=\"nofollow noopener\" target=\"_blank\"><strong><em>CMS.gov<\/em><\/strong><\/a><\/cite><\/blockquote>\n\n\n\n<p>As a result, the patients suddenly feel burdened with the financial responsibility of unpaid charges. Therefore, healthcare practices must strive to communicate and stay transparent about the diagnosis and procedural charges from the beginning. It may not be a foolproof solution but help you in A\/R management.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How to Improve Healthcare Accounts Receivable?<\/strong><\/h2>\n\n\n\n<p>Want to improve A\/R management? Here are a few tips to help you get started!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Tip # 1 &#8211; Streamline Insurance Verification<\/strong><\/h3>\n\n\n\n<p>Throughout the blog, we have reiterated the importance of insurance eligibility and benefits verification. If you fail to incorporate this step before a patient encounter, your accounts receivable will add up and you could end up with higher claim denials and financial loss.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote has-background has-medium-font-size is-layout-flow wp-block-quote-is-layout-flow\" style=\"background-color:#0f75a812\">\n<p><strong><em>In 2021, the frequency of all in-network claim denial was 17%. 14% of total denials were due to submitting a claim for excluded services, 8% due to lack of preauthorization, and 2% due to no medical necessity.<\/em><\/strong><\/p>\n<cite><a href=\"https:\/\/www.kff.org\/private-insurance\/issue-brief\/claims-denials-and-appeals-in-aca-marketplace-plans\/\" rel=\"nofollow noopener\" target=\"_blank\"><strong><em>KFF<\/em><\/strong><\/a><\/cite><\/blockquote>\n\n\n\n<p>Thus, it is recommended that you integrate your electronic health records (EHR) system with a real-time eligibility (RTE) tool to ensure eligibility verification before an encounter. Besides, developing a weekly batch-checking process can also speed up your entire billing workflow.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Tip # 2 &#8211; Payment Estimates and Up-front Payments<\/strong><\/h3>\n\n\n\n<p>You can charge your patients upfront to avoid accounts receivable altogether. When you collect payments at the time of the care service, you eliminate the need for post-appointment invoicing, accelerating the reimbursement process.&nbsp;<\/p>\n\n\n\n<p>One way to achieve this is by sending cost estimates before the appointment. Besides, re-appointment estimates are another way to boost patient satisfaction.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote has-background has-medium-font-size is-layout-flow wp-block-quote-is-layout-flow\" style=\"background-color:#0f75a812\">\n<p><strong><em>Healthcare providers can save nearly $9.8 billion annually by verifying patient eligibility and benefits before suggesting estimated medical costs.&nbsp;<\/em><\/strong><a href=\"https:\/\/www.caqh.org\/hubfs\/43908627\/drupal\/explorations\/index\/2021-caqh-index.pdf\" rel=\"nofollow noopener\" target=\"_blank\"><\/a><strong><em><a href=\"https:\/\/www.caqh.org\/hubfs\/43908627\/drupal\/explorations\/index\/2021-caqh-index.pdf\" rel=\"nofollow noopener\" target=\"_blank\"><\/a><\/em><\/strong><\/p>\n<cite><a href=\"https:\/\/www.caqh.org\/hubfs\/43908627\/drupal\/explorations\/index\/2021-caqh-index.pdf\" rel=\"nofollow noopener\" target=\"_blank\"><strong><em>CAQH<\/em><\/strong><\/a><\/cite><\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Tip # 3 &#8211; Proactively Track Claims<\/strong><\/h3>\n\n\n\n<p>Regularly track accounts receivable to ensure your healthcare business&#8217; financial well-being. If you fail to track this number, you may encounter revenue leakage and miss opportunities to increase your collections.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote has-background has-medium-font-size is-layout-flow wp-block-quote-is-layout-flow\" style=\"background-color:#0f75a812\">\n<p><strong><em>A research study found that 85.4% of healthcare facilities use practice management software and EHR systems for tracking claims, while 63.4% of organizations use this technology for claim analysis.<\/em><\/strong><\/p>\n<cite><a href=\"https:\/\/www.hfma.org\/technology\/revenue-cycle-technology\/how-healthcare-organizations-navigate-claims-processing\/\" rel=\"nofollow noopener\" target=\"_blank\"><strong><em>HFMA<\/em><\/strong><\/a><\/cite><\/blockquote>\n\n\n\n<p>Tracking accounts receivable in healthcare can highlight claim process areas that you can improve and reveal trends with payers and patients. These stats will help you manage your A\/R to a healthy number. For instance, Payer X&#8217;s accounts receivables are 30+ days, but Payer Y&#8217;s accounts receivables are 60+ days. This finding hints you to look deeper into Payer Y&#8217;s contracts and find ways to reduce the days in A\/R.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Tip # 4 &#8211; Automate Your Claim Process<\/strong><\/h3>\n\n\n\n<p>Manual billing processes can leave your practice struggling. One of the many challenges you may encounter is the failure to track and streamline your A\/R processes. These processes are time-consuming and error-prone.&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote has-background has-medium-font-size is-layout-flow wp-block-quote-is-layout-flow\" style=\"background-color:#0f75a812\">\n<p><strong><em>The healthcare industry spends $60 billion annually. However, it could save up to $25 billion (41%) by completely automating the administrative transactions.<\/em><\/strong><\/p>\n<cite><a href=\"https:\/\/www.caqh.org\/news\/2022-caqh-index-health-plans-and-providers-can-save-nearly-25-billion-annually-automating\" rel=\"nofollow noopener\" target=\"_blank\"><strong><em>CAQH<\/em><\/strong><\/a><\/cite><\/blockquote>\n\n\n\n<p>Thus, we recommend automating your claim scrubbing and submission process to not only reduce mistakes but also help you mitigate claim denials and rejections, leading to faster reimbursements and less time in A\/R.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Outsource A\/R Management to MediBillMD &#8211; Your Ultimate RCM Partner<\/strong><\/h2>\n\n\n\n<p>The tips discussed above for improving your accounts receivables provide a solid foundation for improved A\/R management. However, what if we tell you there&#8217;s another POWERFUL strategy that you can utilize to unlock maximum efficiency and profitability? Partnering with a professional medical billing and RCM company, like MediBillMD can save you the stress.&nbsp;<\/p>\n\n\n\n<p>Here&#8217;s why MediBillMD is the ULTIMATE solution for practices of all sizes, regardless of the specialty:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Expertise and Technology<\/strong><\/h3>\n\n\n\n<p>Our certified professional coders (CPC) and billing specialists are trained in leading medical billing and RCM software to ensure accurate claim submission, maximizing reimbursement, and minimizing days in A\/R.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Higher Reimbursements<\/strong><\/h3>\n\n\n\n<p>Our team tracks payments and follow-up on claims, working tirelessly to expedite the insurance reimbursement process, improving your practice&#8217;s cash flow.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Scalability and Flexibility<\/strong><\/h3>\n\n\n\n<p>Our team of billing specialists and certified coders work as an extension to your existing team, giving you the flexibility to scale up or down as per your practice\u2019s size and needs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<p>We hope this guide has helped you understand accounts receivable in healthcare to effectively manage your healthcare facility\u2019s cash flow. As a healthcare provider, you have expertise in medicine and health-related issues, while RCM and its metrics, like days in A\/R, are related to the financial aspect of the practice and may seem a little challenging to navigate. Therefore, outsourcing your medical billing and RCM operations to a professional firm, like MediBillMD, can help you survive and thrive in the competitive healthcare landscape without breaking the bank.<\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p class=\"has-text-align-center has-text-color has-link-color has-large-font-size wp-elements-0cb4344b891f2a1edcc5c199b035c9c2\" style=\"color:#045cb4\"><strong>Frequently Asked Questions<\/strong><\/p>\n\n\n<div class=\"wp-block-uagb-faq uagb-faq__outer-wrap uagb-block-cccf6b6d uagb-faq-icon-row uagb-faq-layout-accordion uagb-faq-expand-first-true uagb-faq-inactive-other-false uagb-faq__wrap uagb-buttons-layout-wrap uagb-faq-equal-height     \" data-faqtoggle=\"true\" role=\"tablist\"><script type=\"application\/ld+json\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@type\":\"FAQPage\",\"@id\":\"https:\\\/\\\/medibillmd.com\\\/blog\\\/accounts-receivable-in-healthcare\\\/\",\"mainEntity\":[{\"@type\":\"Question\",\"name\":\"<strong><strong>How much accounts receivables should be maintained in healthcare?<\\\/strong><\\\/strong>\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"The RCM industry experts recommend healthcare organizations maintain their average days in accounts receivables to 35 days or less to ensure a steady cash flow and healthier revenue cycle.\"}},{\"@type\":\"Question\",\"name\":\"<strong><strong>What does gross accounts receivable mean in healthcare?<\\\/strong><\\\/strong>\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Gross accounts receivable is the total amount of money a patient owes to a healthcare provider for the rendered care services.\"}},{\"@type\":\"Question\",\"name\":\"<strong><strong>What is the accounts receivable cycle in healthcare?<\\\/strong><\\\/strong>\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Once a healthcare provider submits a claim to a payer or bills a patient, the A\\\/R process starts. After you receive the payment for your rendered service against a claim, the account is no longer in A\\\/R.\"}},{\"@type\":\"Question\",\"name\":\"<strong><strong>Why are days in accounts receivable important in healthcare?<\\\/strong><\\\/strong>\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"It is an important RCM metric. It measures the average days a practice takes to collect payments against rendered care services. A lower number indicates faster reimbursements.\"}}]}<\/script><div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-c73faff4 \" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\">\t\t\t<span class=\"uagb-icon uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t<span class=\"uagb-icon-active uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t<span class=\"uagb-question\"><strong><strong>How much accounts receivables should be maintained in healthcare?<\/strong><\/strong><\/span><\/div><div class=\"uagb-faq-content\"><p>The RCM industry experts recommend healthcare organizations maintain their average days in accounts receivables to 35 days or less to ensure a steady cash flow and healthier revenue cycle.<\/p><\/div><\/div><div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-61f6783e \" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\">\t\t\t<span class=\"uagb-icon uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t<span class=\"uagb-icon-active uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t<span class=\"uagb-question\"><strong><strong>What does gross accounts receivable mean in healthcare?<\/strong><\/strong><\/span><\/div><div class=\"uagb-faq-content\"><p>Gross accounts receivable is the total amount of money a patient owes to a healthcare provider for the rendered care services.<\/p><\/div><\/div><div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-6df0d267 \" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\">\t\t\t<span class=\"uagb-icon uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t<span class=\"uagb-icon-active uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t<span class=\"uagb-question\"><strong><strong>What is the accounts receivable cycle in healthcare?<\/strong><\/strong><\/span><\/div><div class=\"uagb-faq-content\"><p>Once a healthcare provider submits a claim to a payer or bills a patient, the A\/R process starts. After you receive the payment for your rendered service against a claim, the account is no longer in A\/R.<\/p><\/div><\/div><div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-82873aef \" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\">\t\t\t<span class=\"uagb-icon uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t<span class=\"uagb-icon-active uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t<span class=\"uagb-question\"><strong><strong>Why are days in accounts receivable important in healthcare?<\/strong><\/strong><\/span><\/div><div class=\"uagb-faq-content\"><p>It is an important RCM metric. It measures the average days a practice takes to collect payments against rendered care services. A lower number indicates faster reimbursements.<\/p><\/div><\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>Healthcare facilities struggle to stay profitable amidst reimbursement cuts and ever-evolving regulations. A\/R, or accounts receivable in healthcare, is one [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":419,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","content-type":"","_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[12],"tags":[],"class_list":["post-418","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-medical-billing-faqs"],"uagb_featured_image_src":{"full":["https:\/\/medibillmd.com\/blog\/wp-content\/uploads\/2024\/05\/what-is-accounts-receivable-1-663a4d021c670.webp",1200,720,false],"thumbnail":["https:\/\/medibillmd.com\/blog\/wp-content\/uploads\/2024\/05\/what-is-accounts-receivable-1-663a4d021c670-150x150.webp",150,150,true],"medium":["https:\/\/medibillmd.com\/blog\/wp-content\/uploads\/2024\/05\/what-is-accounts-receivable-1-663a4d021c670-300x180.webp",300,180,true],"medium_large":["https:\/\/medibillmd.com\/blog\/wp-content\/uploads\/2024\/05\/what-is-accounts-receivable-1-663a4d021c670-768x461.webp",768,461,true],"large":["https:\/\/medibillmd.com\/blog\/wp-content\/uploads\/2024\/05\/what-is-accounts-receivable-1-663a4d021c670-1024x614.webp",1024,614,true],"1536x1536":["https:\/\/medibillmd.com\/blog\/wp-content\/uploads\/2024\/05\/what-is-accounts-receivable-1-663a4d021c670.webp",1200,720,false],"2048x2048":["https:\/\/medibillmd.com\/blog\/wp-content\/uploads\/2024\/05\/what-is-accounts-receivable-1-663a4d021c670.webp",1200,720,false]},"uagb_author_info":{"display_name":"Fred Allen","author_link":"https:\/\/medibillmd.com\/blog\/author\/fred-allen\/"},"uagb_comment_info":0,"uagb_excerpt":"Healthcare facilities struggle to stay profitable amidst reimbursement cuts and ever-evolving regulations. A\/R, or accounts receivable in healthcare, is one [&hellip;]","_links":{"self":[{"href":"https:\/\/medibillmd.com\/blog\/wp-json\/wp\/v2\/posts\/418","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/medibillmd.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/medibillmd.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/medibillmd.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/medibillmd.com\/blog\/wp-json\/wp\/v2\/comments?post=418"}],"version-history":[{"count":0,"href":"https:\/\/medibillmd.com\/blog\/wp-json\/wp\/v2\/posts\/418\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/medibillmd.com\/blog\/wp-json\/wp\/v2\/media\/419"}],"wp:attachment":[{"href":"https:\/\/medibillmd.com\/blog\/wp-json\/wp\/v2\/media?parent=418"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/medibillmd.com\/blog\/wp-json\/wp\/v2\/categories?post=418"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/medibillmd.com\/blog\/wp-json\/wp\/v2\/tags?post=418"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}