After a patient or the patient’s insurance provider has been billed for DME services, accounts receivable (A/R) refers to the money owed to the practice. The practice can calculate A/R in a variety of ways. Firstly, a practice often keeps track of “Days in A/R” by dividing A/R totals by average daily charges. Secondly, accounts are typically classified according to their age, such as:
- 1 to 30 days after billing
- 31 to 60 days after billing
- 61-90 days since billing
- 91-120 days since billing
The longer an account stays unpaid for services performed, the more likely it will never be paid. As a result, even when money is definitely owed, ARs do not always record as revenue.
According to research, a provider may expect to receive around 10 cents on the dollar for each account over 120 days old.
Unfortunately, failing to manage ARs on time overburdens financial departments, increases workload, and often results in excessive costs and revenue leakage for the DME practice.
Excessive revenue leakage is a severe problem for DME healthcare providers in the United States. Many hospitals already have negative margins that fall hundreds of millions of dollars short of their income.
According to research in healthcare conducted in 2018, more than 40% of respondents’ hospitals lose 10% or more to leakage. Perhaps more concerning is the fact that 23% of respondents are unaware of the leakage costs their practices bear. In fact, DME providers cannot afford to lose revenue for extended periods.
Tips to Turn DME AR Collection Challenges into Cash Flows:
Maintain Open Patient Communication
DME Providers with clearly established payment periods are less likely to experience AR delays. In many situations, simply making sure payment expectations are clear for the patient before services are delivered will reduce the number of overdue or delayed payments. Creating a financial responsibility statement for new patients to sign at their first session provides a clear understanding of what is anticipated regarding payments.
Use an updated Medical Billing Software
Having up-to-date DME billing software is essential for streamlining your entire DME billing and collection process. It allows you to keep track of and manage all of your DME bills. You may keep track of past-due bills and identify patients who have not made payments. You may need to pay a significant amount to purchase robust DME billing software, but it will save you a lot more money on internal DME billing resources and increase your collection rate.
A/R workflow automation saves time by managing some of the more time-consuming aspects of A/R. This form of automation not only makes invoicing and payment collection prompter but also decreases issues such as overlooked A/R accounts or claim denials.
Review your Collections
Tracking and managing collections is one of the process’s most essential and noticeable aspects. If you can’t complete this task, it’s unlikely that you’ll be able to increase your collections. Make reviewing your collections during your monthly financial meeting a monthly task to observe the methods and processes working in your favor.
Although this procedure appears evident, it works quite well in practice. All thanks to your DME billing staff for their efforts; it is not an easy chore to examine and contact patients to collect past-due invoices.
Consistently Run A/R Reports
The overarching goal is to keep A/R days low, which is the most effective way to manage the revenue cycle. This necessitates a thorough monitoring of AR. It is beneficial to thoroughly evaluate AR data monthly to identify troubling trends or persistent problems with collecting payments. These reports should look into issues such as:
- Delays between services rendered and invoicing
- Average AR cycles
- Collection rates
- Aged accounts
Outsource DME AR Collection Services!
Accurate and efficient DME medical billing is critical for keeping AR days as low as possible. A minor claim error can cause payments from payers to be delayed by weeks if not months. If your in-house DME medical billing is inefficient, consider outsourcing DME medical billing services.
This is most likely the answer to all of your collection concerns. You can simply choose to outsource DME billing services to specialists who will handle the entire DME billing and AR collection Services, allowing you to focus on your patients without worrying about revenue. 24/7 Medical Billing Services professionals assist you in meeting your financial objectives by boosting your AR collections.