When your medical practice submits a claim to a payer, the countdown begins until you receive the payment. Ensuring timely payment is crucial for your business, as delays can have costly consequences. Ideally, you should aim to clear accounts receivable within 30 days. To effectively reduce accounts receivable, it’s essential to implement efficient billing processes, follow up promptly on unpaid claims, and maintain clear communication with payers.
By doing so, you can minimize the time it takes to receive payments, improve your cash flow, and reduce the financial strain on your practice.
However, payment delays can occur for various reasons, including:
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- Claim errors
- Multiple denial appeals
- Missing the filing deadline
Reducing the accounts receivable (A/R) turnaround time is essential. Here are some tips to help you achieve this:
1. File Claims Promptly
Submit claims to the payer as soon as possible. In large hospitals, it may take around two weeks to file claims. Once payers like Medicaid, Medicare, or private insurance receive the claim, they typically process the payment within 15 days. By streamlining your claims submission process, you can improve your cash flow.
2. Preempt Denials
Invest in solutions that minimize errors in submitted claims. Mistakes can lead to claim denials, requiring you to file a denial appeal, which prolongs the A/R process. Submitting clean claims is vital for receiving timely payments.
3. Address Denials Immediately
Even with a streamlined process, occasional mistakes are inevitable. Upon receiving a denial notice, address it immediately to prevent a backlog that could disrupt your cash flow. Payments from appealed denials can take about 90 days, so timely resolution is crucial.
4. Monitor Your Aged Trial Balance
The aged trial balance lists all outstanding accounts receivable. Review it at least once a month to ensure no receivables exceed 45 days.
5. Track Claims Denial Rate and Overall A/R
Regularly review and analyze your accounts receivable, at least every six months. Pay special attention to the denial rate. If it’s high, consider improving your claims submission process.
By following these tips, you can effectively manage your accounts receivable and maintain a healthy cash flow for your medical practice.
Benefits of Allzone’s AR Follow-Up Services:
- Improved Cash Flow: Efficient AR follow-up ensures quicker collection of payments, enhancing the cash flow for healthcare providers.
- Reduced Bad Debt: Proactive management of outstanding accounts reduces the risk of debts becoming uncollectible.
- Increased Efficiency: Automation and streamlined processes lead to higher efficiency in managing AR.
- Enhanced Patient Satisfaction: Clear communication and flexible payment options improve the patient experience.
- Cost Savings: Outsourcing AR follow-up can be more cost-effective compared to maintaining an in-house team.
By leveraging Allzone’s expertise and services in AR follow-up, healthcare providers can focus more on patient care while ensuring that their revenue cycle operations are optimized for better financial performance.