A well-established durable medical equipment (DME) supplier based in Florida encountered challenges concerning delayed payments and a substantial backlog in accounts receivable (AR). Seeking to enhance their cash flow and alleviate the AR backlog, they aimed to optimize their AR follow-up procedures for greater efficiency.
Challenges
The esteemed DME supplier grappled with notable challenges due to a substantial backlog within their Accounts Receivable. These impediments within their AR management and follow-up procedures consequently led to payment delays, thereby diminishing their cash flow.
Our data analysis showed that their revenue cycle process was sub-optimal and led to substantial backlog, that posed a threat to their steady cash flow and financial health. We observed that their average AR days is more than two months (>60 days) and a significant number of claims are unpaid after 120 days.
Our Approach & Solutions
Commencing with an analysis of our Accounts Receivable data, we delved deeper to gain enhanced insights into immediate focal points, aiming to prioritize areas of concern. Subsequently, we strategized to address these immediate concerns while also devising plans to focus on critical aspects to improve the overall billing process in the long term.
We generated detailed Aging report, segmenting the accounts receivable into distinct aging buckets and specific criteria. Additionally, we conducted an in-depth analysis of AR data based on both payer categories and monetary values, identifying focal areas for heightened attention and task prioritization. Our team initiated proactive communication with payers, adhering to a meticulously devised priority list for outstanding claims, while systematically compiling and arranging the status of claims. This preparation facilitated subsequent actions, such as resubmissions, updating payment records, or providing necessary documentation to ensure the prompt adjudication of pending claims by the respective payers.
Our team covered the aged claims listed in the AR aging report within three months of support by performing the followings tasks methodically and diligently.
- Tracking and monitoring of unpaid claims
- Proper work assignment based on well defined criteria
- Proactively following up with payers
- Initiate claim actions to resubmit and file appeals
- Daily status reporting and task prioritization
Results
With consistent and systematic effort, our team successfully resolved the aged claims outlined in the AR aging report within a span of three months. This achievement was realized through methodical execution of designated tasks.
Following the three-month duration of our AR Follow-up project, notable improvements were observed, marked by a substantial reduction in the number of outstanding claims.
- Unpaid claims over 120 days reduced to 15% from 30% earlier
- Average AR days reduced to < 38 days
- Operational cost for the AR team reduced by 60%
