The importance of actively managing your accounts receivable

Accounts Receivable is considered a primary source of revenue for medical organizations; they get either from insurance companies or from the patient. As the process is time exhaustive and involves too many legislative complexities, medical providers must not handle themself; if so, they will not utilize the best of their time and will compromise in delivering patient-centric medical services. Therefore, partnering with healthcare administrative partners to manage your accounts receivable actively must be a top priority. It will ensure that your practices and medical facility successfully treat more people.

Importance of receivables management

Strong accounts receivable management is crucial for the organization without any industry difference, but certainly, there is no exception in the healthcare industry. In fact, because of the technical and legislative complications in billing operations, medical practices frequently face unique challenges; it is critical to manage accounts receivable effectively for success. If your medical staff doesn’t manage accounts receivable effectively, you could encounter the following problems;

1. Claim Denial: It is a crucial requirement of the insurance carrier to collect the accounts receivable payments promptly. According to the hospital benchmarks, the average AR days( amount of time it takes to receive payment on a claim) for the medical facilities ranges between 30 and 70 days. When medical providers fail to follow up with the Payers to receive their payments timely, it becomes a primary reason for the claim being denied.
2. Unpaid Invoices: When you don’t handle accounts receivable efficiently, you will frequently face the issue of outstanding invoices as these are created manually. Therefore, the invoices are hard to read; worst of all, it is impossible to track them. Ultimately, you do not receive payments on time, badly affecting your medical practice’s financial health.
3. Missed Payments: If your accounting system lacks efficiency, your patients will probably neglect to pay their financial responsibilities, and your medical practice will notice the lack of incoming revenue.

In short, it is crucial to collect payments on time, or your late payments will probably turn into nonpayment. As the research has shown, if businesses fail to timely collect money on accounts receivable, they would be less likely to collect that debt.

Tips for actively managing accounts receivable

It is crucial for medical organizations to apply accounts receivable management best practices, as it is a major asset of the company and the future cash flow of the company depends on it. Your workforce in charge must efficiently manage accounts receivable; it will optimize your billing, payments, and collection processes to reduce the time it takes to get paid and eliminate the risk of bad debt. In these circumstances, we are here to list a couple of the accounts receivable management best practices:

Verify the creditworthiness of potential clients

It is crucial for in charge workforce to perform the credit check on customers(patients) by analyzing their previous records of making payments. You must ensure that the patient holds a good reputation for making payments promptly before entering into business with them. If there is any kind of doubt about their trustworthiness, you can refuse credit or ask for payment upfront instead.

Offer straightforward payment options

Your medical organization should deploy digital payment solutions, whether it may be an online payment portal or a mobile bill payment application, to make billing payments faster and more secure. It is essential as most patients prefer to get medical services from providers who provide modernized payment solutions because patients find it easy to pay their bills, which ultimately helps you to reduce your accounts receivable days.

Track payments

Your medical organization must acquire a modernized claim tracking system to have better control over the paid, low-paid, and denied claims and a robust system for taking immediate and necessary steps for reimbursement. You must equip telehealth solutions that can analyze the core reason behind the claim denial, and the concerned staff is notified to take necessary steps to prevent the denial repetition.

Send electronic invoices

Electronic invoicing has a crucial role in streamlining accounts receivables. Following up with the payers and manually processing documents is unprofessional and hard to read, but worst of all, they are impossible to track. To get rid of getting trapped under the payer’s legislative regulations, it is most important you eliminate paper invoicing the envelopes, stamps, and the postal service that accompanies them, and acquire e-invoicing to process via email or through your accounting system, which ensures you to get paid faster.

Automate your account receivable process

Accounts receivable automation maximizes a patient experience by enhancing financial transparency with the patients; you can tell them in advance about their out-of-the-pocket expenses and financial liabilities before they take expensive treatment or medication.
Patients will be more likely to pay timely when they know about their due payments. Additionally, the status of different bills and payments can be determined with the help of medical billing and coding software. In short, it would be the best practice to streamline your accounts receivable process when you invest in the technology.

Know when to get rid of a customer

Another best practice to improve your accounts receivable is filtering out your list of patients with a bad reputation in making their payments. If you have patients who frequently make late payments and require a follow-up each time, it would be best to get rid of them simply. Before you decide to put such patients out of your business, it would be best to calculate the financial risk of non-payment or late payment. The second option to tackle such kinds of untrustworthy patients is to ask them to make payments upfront instead of offering them credit.

Set credit & AR collection policies

If you are providing a credit facility to your patients, you must define clear credit policies to avoid extending too much credit to some clients. It also makes it easy for your financial workforce to decide whether to extend credit when a client requests it. Comparably, transparent accounts receivable collection policies ensure you take an energetic approach to address overdue accounts and streamline the overall process. Following up with the clients to collect outstanding balances and periodic evaluation of the accounts receivable must be a part of your collection policies.

Seek help from MedsIT Nexus practice revenue experts to collect outstanding accounts receivables

If you have implemented all of the described strategies and still you are experiencing failure to manage your accounts receivables, then MedsIT Nexus medical billing and coding services are nearby; we are equipped with a highly proficient team that can genuinely help you identify your possible point of failure and highlight your benefits. So, a financial partnership with a renowned healthcare administrative partner is a viable option that may be considered if needed.