Hospital accounts receivable play a pivotal role in your practice’s revenue generation. Beyond its financial role, it indicates the overall performance of your practice. Managing AR in its complexity plays a crucial role in both financial well-being and operational efficiency.
Most healthcare leaders and providers focus less on accounts receivable as they are labeled as not collectible and written off as bad debts. This results in poor collections.
What is the Significance of Hospital Accounts Receivable?
Accounts receivable are a crucial part of healthcare billing and revenue cycle management. The more accounts piling up in your practice the less cash flow you have. Unfortunately, the longer your invoices stay in AR buckets, the less likely your practice will get full reimbursements.
Increasing hospital AR buckets means you have less cash flow to maintain stable operations and pay your staff. Eventually, you might have to write off patient payments which will eventually result in revenue loss.
Benchmarks of Hospital Accounts Receivable
Maintaining a healthy AR in your practice needs assessment of key performance indicators in revenue cycle management. These include:
- Average AR days: This is the average time needed for patients or insurers to reimburse your practice after the services rendered. AR days less than 35 indicates a healthy cash flow and operational stability of your practice.
- AR days more than 90: This is a percentage of AR older than 90 days. AR buckets older than 60 days are considered a high-risk area for your practice. AR buckets older than 90 days indicate that you need to rethink your hospital accounts receivable management strategies.
Factors Contributing to Poor Hospital Accounts Receivable
Here are a few reasons why your practice might be facing challenges in managing AR buckets:
- Lack of Expertise: AR tasks are often handled by staff primarily focused on front-end activities who may not be certified coders. Without the necessary expertise, they cannot properly analyze the process before submitting a claim. This leads to an increase in older AR buckets. Over months, unpaid claims can accumulate to around 20-40% of net billable charges, potentially costing you $100k. Employing certified accounts receivable staff can help eliminate these challenges and enhance your revenue.
- Global Issues: The term "global issues" often refers to global days for surgeries. However, in AR, it signifies problems like lapses in contracting, outdated credentialing, incorrect code usage, or non-compliance with revised CMS guidelines. Addressing global issues requires more time and resources compared to simple claim corrections.
- Clearinghouse Transition: In-house billing staff may neglect clearinghouse rejections or transmissions, resulting in hundreds of unresolved claims stuck at the clearinghouse. Regularly verifying clearinghouse transmissions can prevent unattended claims and ensure appropriate reimbursements.
Lean on Experts when AR Days Increase
If your hospital is struggling with accounts receivable, it may be time to enlist the help of a professional revenue cycle management (RCM) team. These experts can address your hospital accounts receivable challenges and ensure your practice receives timely payments.
Sunknowledge Services Inc. offers a powerful and cost-effective solution to expedite your payments. They provide:
- Up to 97% collection rate
- Improved workflow through effective tracking tools
- Quick turnaround times
- 99.9% accuracy
- 100% HIPAA-HITECH compliance
- Extensive AR follow-up until resolution
Leveraging industry knowledge and advanced technology, Sunknowledge’s RCM experts empower you to regain control of your revenue cycle and achieve a better ROI. Partnering with them will help you to focus on your core competency: delivering high-quality care.
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