Accounts receivable (A/R) days are a significant and key indicator of a company’s liquidity and overall cash flow. It measures how many days patients take to settle their bills fully.
The longer patients settle their outstanding medical billing, the more likely healthcare providers will experience a liquidity crisis and have difficulty paying short-term obligations. This can happen even when the healthcare provider is doing brisk business. Unresolved collections woes can take the whole ship down.
Industry-standard for healthcare providers’ A/R days is 40 to 50 days for the average performing medical billing department. Sixty days and above is poor, while 30 days or less is considered excellent and ideal as far as account receivable days are concerned.
In simple terms, low accounts receivable days mean healthcare providers take a shorter time to collect payments owed by patients. This gives medical practices enough funds to procure necessary equipment and supplies, hire and compensate top-notch staff, and invest in technology. Ultimately, low A/R helps healthcare providers serve their patients even better.
Recognition and a healthy regard for keeping A/R days to a minimum should be shared by all enterprises in the health industry, particularly those in the Durable Medical Equipment, Prosthetics, and Orthotics business. Below are the guide questions that serve as a list of things to do for healthcare providers to reduce their accounts receivable days.
Do you have a proper assessment of your current accounts receivable situation?
The initial step is to ascertain the state of the business’ accounts receivable situation by asking, “How long does it take for patients to settle their bill?” A business accounts receivable strategy depends on this. If the number of A/R days is deemed problematic, businesses should set realistic goals in dealing with their accounts receivable days woes. In other words, recognizing the problem is the most significant step.
Do you dispatch patient bills as soon as possible?
It is to the healthcare provider’s benefit for bills to be sent out on the day of the service. A delay in the dispatch of statements may cause payment delays down the line.
Do you thoroughly check bills before sending them out?
Issuing incorrect bills is the surest way for claims to be denied and, therefore, causes delays in invoice settlements. Healthcare providers are always mad at sending out claims that errors are likely to happen. Incorrect billing can delay payments by days or weeks. Knowledge of the medical coding system, keeping abreast of medical coding updates, and thoroughly checking each bill before dispatch could be fundamental driving forces in keeping accounts receivable days down.
Do you collect payment upfront when possible?
Patients should be informed in advance about payments they need to pay for out of pocket and when payment is due. Implementing this will reduce collection efforts needed to recoup payments owed.
Healthcare providers are advised to collect payments upfront when possible. They may collect deductibles upfront, too. Copayments, fixed amounts that patients pay for after-tax deductibles, should also be collected on the day of the appointment.
Do you have extensive patient payment options?
Aside from cash, check, and credit/debit cards, healthcare providers can accommodate PayPal, Apple Pay, and CareCredit users. More payment options increase the chance of being paid quicker as patients can settle in the most convenient method. This could lead to an increase in revenue, which drives accounts receivable days down.
Do you notify patients of payment expectations in advance?
Informing patients of payment expectations upfront makes them better prepared for how they are going to settle their bills.
Upon scheduling appointments, patients should be informed how much they are projected to pay, the payment options available, and the deadline for submitting payments. Notifying patients before their appointments help prevent confusion.
It is beneficial to have an option for patients to pay in advance, too. Offering patients cash discounts and rebates could entice patients to do so.
Do you keep track of billing and coding regulations updates?
By staying in the know of billing and coding developments, businesses can avoid mistakes and delays due to billing errors. Mistakes in billing mean claim denials. Claim denials mean medical practice will have to wait longer to get compensated.
The American College of Physicians website is an excellent place to start for coding updates. Medicaid and Medicare, regarding the matter, also provide free resources. Medical coding publications, webinars, and conferences are a treasure trove of information for the latest in coding and regulations.
Do you employ smart claim-tracking techniques?
Electronic-based claim tracking techniques enable healthcare providers to monitor outstanding claims and ensure they are properly processed. Efficient tracking of claims status can aid in recognizing and locating bottlenecks.
Why should you partner with Proclaim Billing Services?
Nothing is a more vital metric to collections than accounts receivable days. It is wise for businesses in the healthcare industry to keep A/R days as short as possible. Medical practices must devise ways for outstanding medical bills to be settled soon.
Proclaim Billing Services is the leading DME, Prosthetic, and Orthotic billing expert with years of practical experience in applying business processes. Hiring their team will be your best choice if you are a DME healthcare provider looking for experience and expertise in managing your Accounts Receivable, Collections, and Claims Processes. Entrusting your DME billing process to Proclaim Billing Services will significantly reduce billing errors, claims denials, and rejections and reduce your workload, allowing you to focus on caring for your patients.
Set a free appointment today to learn more about how Proclaim Billing Services may be of service to you.