Skip to main content

5 Simple Steps to Reduce Account Receivable for Your Medical Practice

August 6, 2015

5 Simple Steps to Reduce Account Receivable for Your Medical PracticeBenchmarking AR objectives isn’t as difficult as many medical billing professionals think, if you approach the task with the proper tools and vision. Your accounts receivable (AR) assets are a living, breathing organism that is constantly evolving. Every transaction throughout the day increases or decreases the distance to the imaginary finish line, that magic number your accountant establishes as an acceptable outstanding balance.

Assume you’ll never reach the ultimate finish line, that place where every balance is zero or nothing falls into the over 30 day column. Going with that assumption, consider these strategies to help you tackle your outstanding A/R balances with confidence.

1. Understand the rules of engagement You can expect Medicare reimbursements within two weeks of claim receipt, providing you file clean claims. If you experience a high volume of delays or denials, explore your filing process and reason codes. To expedite faster claim reimbursement, file claims on the day of service. Utilize a coding resource to help you discover common data entry errors and identify next steps. Check your billing software for posting errors. Whether it is reducing processing time for Medicare or another major third party payer, know the filing rules and initiate procedures to meet those benchmarks consistently. Aim for a first pass recovery rate above 90 percent. That will virtually eliminate large balances in the 60, 90, and 120-day columns.

2. Engage provider relations representatives Stop struggling to resolve a problem on your own. Establish relationships with each payer on your roster. Many have local representatives in larger markets and they can help you resolve problems faster. Anticipate changes. This might be a good time to reach out to Anthem/Cigna reps to find out if filing procedures will change with the merger. Proactively managing challenges is far superior to tackling problems once they hit the AR stream.

3. Shorten review cycles Complete a comprehensive AR review at least bi-annually. More frequently if you currently see a high volume of accounts aging out.

4. Tighten your patient account policies Due-at-time-of-service policies have given many providers more control over their account management efforts. However, strict collections policies for patient accounts that your practice carries are necessary for financial survival today. Implement a no-excuses policy. Perhaps: three statements, followed by a 15-day demand letter, and then, the file goes directly to a collections agent. You know your patients better than anyone and understand when an extension of time is warranted and when you must press for payment.

Medical Practice Needs to Upgrade Credit Card Teminal

If you choose to establish payment plans follow these guidelines:

  • Post standard payment schedules in your office and on your website.

  • Establish automatic payment policies that link to a credit card, checking account or debit card.

  • Collect a deposit on the balance in addition to insurance co-pay at the first visit.

  • Offer multiple payment options including credit card, cash, check, debit cards, health savings vouchers and specialty cards such as CareCredit.

  • Educate patients and your staff about billing policies and payment guidelines.

  • Set realistic terms for repayment (six months or one year depending on the balance).

  • Consider referring your patients to a financial counselor before scheduling elective surgery.

5. Equip staff to manage collections with every patient encounter Payers provide online tools to estimate coverage for specific services and verify unmet deductible balances. Using these tools and a current patient account balance report together allows medical practice staff to discuss financial obligations at registration or before the patient exits the office. Train designated team members how to discuss payment options with your patients. With the proper tools, technology and training, patients will be confident you care about their health, and your team will improve past due ratios.

4 Tips For Increasing Revenue In A Medical Practice

You don’t have to accept high account balances as part of running a medical practice. Understanding the dynamic nature of your A/R and what it takes to develop stronger collections policies will help you gain more control over your cash flow and improve profit margins.

{{cta(‘6e630817-4653-4786-8bcb-3800cdada97c’)}}

Get the Latest RCM News Delivered

Receive practical tips on medical billing and breaking news on RCM in your inbox.

Get in Touch