How is your Accounts Receivable Health?
Running a financially healthy healthcare unit amidst all the healthcare regulatory changes that take place regularly is an arduous task. Keeping up and incorporating the changes is as essential as keeping a tab on the practice’s performance, especially on the revenue cycle. Your accounts receivable (AR) health shows whether or not you are covering up for your expenses and for the services you rendered.
Although most medical practices conduct a yearly AR report, we at 24/7MBS believe a monthly report goes a long way in having superior control over the revenue cycle management (RCM). A poor accounts receivable status can lead to serious depletion of revenue. The following are some collection metrics from our experts to help you monitor your AR health.
Accounts Receivable Monitoring Metrics
There are many metrics that can be used to monitor a practice’s performance and AR status but these are amongst the easiest ones and helpful too. Incorporate these in order to have a firm grip over your AR and you will see a remarkable difference in your RCM.
1.Average Days Delinquent (ADD) / Average Days
The average AR days is a crucial indicator as it indicates the number of days your claim in lying unpaid. Being aware of the number will help you streamline the medical billing process and try to lower the days. The more time claims lie around in the payer’s office, it is likely to go unpaid.
2.Days Sales Outstanding / Aging AR
Aging report reveals the amount your practice is due to get from your payers. Lower the AR age, higher the chances of getting reimbursed. Thus, it is imperative to try to maintain the bucket within 30 of the 30/60/90/120 brackets. A quarterly analysis report can help to a great extent.
Since the majority of payment is made by the primary and secondary payers, monitoring the patient AR takes a back seat. Nevertheless, it does form an essential part of your income as well as to know your patient better. A patient with bad payment or credit record can be dealt differently.
Claims that pass through the scrubbers can be rejected by certain payers for various reasons including silly mistakes and compliance issues. Working on the rejections is double work so, it is necessary to know the common reasons behind them and work on them at the source itself.
Denials are nothing but major time consumers that demands immediate attention for appealing and it also takes your in-house team days to follow up on it. Physicians can’t afford to run behind denials because it hampers the fresh inflow of money too due to administrative reasons. The percentage of denials can be reduced if the reason for rejections are known and rectified.
Every payer has a peculiarity or pattern in reimbursing typical kinds of claims given the percentage of coverage and insurance policies of patients. Noting the trend and issues you face with them can drastically increase the chances of improvement in filing claims according to their convenience. Insurance companies have a lot to cater to, why not help yourself by assisting them with the appropriately filed claims?
Do feel free to share any other metric that you think helps practices to monitor the AR performance and improve it.