Many healthcare practices reach out to third-party service providers to handle their medical billing and coding needs. One such service that has been overlooked in the past but is extremely crucial to take charge of right away is accounts receivable. Accounts receivables management services can help you take control of your cash flow and ensure you are being paid quickly and in full for the services rendered.
What is the accounts receivable cycle?
Accounts Receivable (AR), in simple terms, is the money that a business is yet to receive for services already rendered. In healthcare practices, this is how AR comes into play.
A hospital treats a patient, and the patient is covered by medical insurance. The bills are captured and sent to the insurance provider. The payer takes their time to analyze the bills and approve or deny them. Approved bills are then paid or reimbursed.
Depending on how straightforward the charges are and the transparency in the bills captured, the reimbursement will happen anywhere from 30 to 70 days.
A accounts receivables management service provider aims to bring the AR days as low as possible. Why is this important?
An extended A/R cycle means that the business or healthcare practice is left for longer days between cash inflow. This affects the financial stability of the practice and leaves it money-less for longer periods of time in a month.
Benefits of Accounts Receivables management services
- Increased cash flow
One of the biggest benefits of hiring an accounts receivables management service provider is the increase in cash flow the practice gets to experience over time. Increased cash flow is great for any business, despite the industry it exists. Higher cash flow means the following.
- Increased liquid assets
- Ability to handle everyday and periodic expenses by self
- Buffer against sudden cash needs
- The independence to stay afloat comfortably
Lesser need to depend on external debts
One of the biggest struggles that healthcare practices get into is debt. Healthcare expenses are always high in terms of staff payments or technology investments. Most business debts come with high-interest rates. Having a good cash flow prevents having to depend on external debts.
Quicker closure of cases
Accounts receivables management services help quickly close individual patient claims and cases by moving from claims creation to full payments quickly. When cases are closed quickly, it leaves the team with enough time to focus on other integral tasks to help the business grow.
Better financial stability
Without a doubt, increased cash flow, which is a result of well-planned accounts receivables management services, is the easiest way to improve financial stability. When the balance sheet is filled with a quick and consistent inflow of cash, this also improves the status and positioning of the business in the eyes of the stakeholders.
Improved customer experience
When a healthcare practice enjoys better cash flow, this also positively affects the patient experience. The business offers better services, maintains a great ambiance, has more ground staff to help people in need, and also can offer discounts and benefits. So, accounts receivables management services, over time, help improve customer experience.
Takeaways
Some people assume that accounts receivables management services are just ways to claim reimbursements quicker. However, the consistent and regular inflow of cash can help every aspect of running a healthcare business positively and that is why the investment you make into hiring an AR team makes sense.
Measure your average A/R cycle right now and then keep that as a reference to see how the strategies of these accounts receivables management service providers bring in changes.
Read more:
The top five responsibilities of a medical coding company in India
Reasons for working with a Revenue cycle management company in India
BOT automation – The future of healthcare RCM
