Revenue management in the healthcare environment has never been simple, but reimbursement and collection woes have only increased over the recent past. Practices are finding that, regardless of how well-coded and on-time filed claims are, payments always seem to lag. No surprise, then, that accounts receivable management has also become the billing staff and providers’ biggest concern.
At its most basic, AR management is merely ensuring that revenue collected on a practice isn’t left on the table. But with different payers, evolving rules, and administrative hurdles, AR has a tendency to be one of the most time-consuming aspects of revenue cycle management.
The Problem of Aging Claims
One of the strongest warning signs of AR is the presence of aging claims. Those are claims that have not been reimbursed 60, 90, or 120 days from the time they were submitted. The longer a claim has “aged”, the poorer its chances are for reimbursement. Payment delays happen from missing information, errors in authorization, or payer requirements that were not cleared up front.
For payers, the impact is greater than cash flow disruption. Uncollected aging claims bring uncertainty and inhibit planning for staffing, equipment purchase, or service expansion. Effective accounts receivable management attempts to process these claims in a timely fashion by following them actively and systematically.
The Follow-Up Burden
Follow-up on claims is most commonly underappreciated. Payers, following a claim submitted, may request clarification, deny all or part of it, or just not reply. Without an established follow-up system, practices lose money between cracks.
Best practice calls for specific timelines to be laid out for outreach. For example, a 15-day response to a claim from the date a claim is received, taking it over 30 days. Special AR teams track follow-ups, log communication, and resubmit improved claims, as required. Not only does this increase recovery rates, but it also identifies issues in billing workflows and gets them fixed for future submissions.
Payer Delays and Administrative Barriers
Even with accurate claims and continuous follow-ups, payer delays remain a nuisance. Insurers take weeks to settle payments, particularly for costly procedures or those that need prior authorization. Backlogs on the payer side also result in delays, and the providers wait with no specific timeframe.
To address this, billing offices may establish stronger payer communication links, launch electronic claim status checks, and include automation functionalities that identify delinquent payments prior to reaching the status of aging claims. In such offices with limited in-house capabilities, outsourcing AR management would most likely be the optimal option to keep revenue streams consistent and administrative loads at bay.
Establishing a Stronger AR System
Closing these barriers requires more than patch-by-patch solutions. It requires a formal accounts receivable management strategy across the full life cycle of claims:
- Â Accurate claim filing with proper documentation upfront.
- Â Problem claim identification early on through the use of dashboards or reporting.
- Â Timely follow-up with payers to keep claims moving.
- Â Denial management processes that identify and correct recurring errors.
- Continuing staff training on payer rules and changes in compliance.
Processes utilizing a methodical process of AR management reduce loss and stabilize the cash flow landscape more efficiently.
Inefficiency of AR cannot be avoided by healthcare practices. Time lost in aging claims, follow-ups, and payer delays dilutes fiscal strength and takes attention away from treating the patient. By investing in solid processes, technology, and, in some cases, outside assistance, practices are able to regain the revenue cycle.
Finally, effective accounts receivable management is not merely a matter of collecting from patients. It is about keeping practices in the black, providing for employees, and offering uninterrupted care for patients.
