9 Proven Ways to Cut AR Days in Healthcare Accounts Receivable

Healthcare providers have primary responsibility of offering top-notch treatments. They used to keep busy during the whole day and night to ensure patients get accurate and effective care. After taking care of medical responsibilities, healthcare staff rarely gets the time to focus on billing. Eventually, a burned-out staff automatically commits silly billing mistakes and sends erroneous claims to payers. 

Insurance companies have a keen attention to find even a nominal error or mismatch in claims. As a result, they deny reimbursements, and the provider suffers from piled-up pending accounts receivable (AR). You can also experience how frustrating AR can be once you interact with any healthcare billing staff. You can almost hear the fatigue in their voice due to fighting with payers and patients to collect payments. 

Healthcare Accounts Receivable Basics: What Every Clinic Should Know 

Accounts receivable refers to payments for services that providers have already rendered. In most medical clinics, staff experience many claims that are pending for months. That increases pending bills, if not collected on time, may break the back of the clinic’s financial side. As a result, the practice may face closure due to denied or hindered cash flow. As we have seen, a significant number of medical services in the US have closed during the last six months due to financial struggles. 

Now, the common question arises: What are the reasons behind this increasing AR? Moreover, why do internal staff fail to notice the increased number of pending AR and resolve them within the time? Here are the practical explanations and feasible solutions to minimize days in AR. 

Reasons Behind Piled-up Accounts Receivable (AR) 

Providers or clinicians, as they stay busy in providing healthcare services, often fail to follow up on whether the payments are coming seamlessly, right on time. Now, payers have a strict rule that every claim needs to be picture-perfect. For a tiny error, they send the claim to the rejected bucket. Over time, these unpaid claims become bad debt for providers. Consequently, the practice suffers due to financial loss from bad debt. Now, pending AR accumulates due to the following reasons:  

Lack of Proper Follow-up 

Billing staff of a healthcare provider often stay busy addressing patients’ conditions. Often, they become burned out in balancing patient care and clinic administration at the same time. As a result, they miss the record of claim denials and do not appeal on time. Payers fully utilize these oversights and deny the payment. Here, hiring a professional third-party healthcare accounts receivable company offers effective solutions to reduce AR. They thoroughly observe every claim and prepare a proper appeal to address denials. 

Denial Management Inefficiency 

Also, in many clinics, we have observed a lack of denial management efficiency. Denial management in healthcare is almost like detective work. Here, medical billing and RCM experts not only fix mistakes. They dig into why these denials just keep on happening. In this process, they notice trends, like one insurer denying claims for the same reason over and over, and they fix the root cause. That persistence pays off. Slowly, the AR days shrink. Slowly, the clinic regains its financial standing. 

Patients Unaware of their Out-of-Pocket Expenses 

Disputed patients are a significant reason behind piled-up bad debts. Providers often do not give a proper idea to patients regarding their out-of-pocket expenses. When they see a huge amount of pending medical bills over their heads, they start to dispute. Here, professional healthcare accounts receivable management experts eradicate any chance of dispute. They discuss every tentative cost with patients, so patients stay informed and get ready to pay the amount. It eradicates any chances of disputes later.    

Hence, to fight piled-up accounts receivable, staff need to be extra cautious and active. They must follow every claim right after submission. It ensures that no claims slide through the cracks. Without it, everything gets harder. Increasing bad debts hurts the clinic’s overall efficiency. It affects staff morale, payroll, investing in better tools, and even keeping up with basic patient services. 

9 Proven Ways to Cut AR Days 

Here are the most effective strategies used by revenue cycle leaders. These strategies effectively reduce AR days and ensure clinics get the full payments for their services. 

1. Verify Insurance Before the Visit 

So many denials come down to one thing: eligibility issues. Providers first need to ensure the patient’s insurance plan is still active and not outdated or exhausted. Moreover, they must ensure the patient’s plan will cover the required treatments and medications.  

For effective solutions, they must utilize real-time eligibility verification tools. Moreover, they should thoroughly check whether there are any co-pays in the patient’s plan. Finally, what most billing staff frequently miss is reconfirming coverage at every visit. This one step alone can shave days, sometimes weeks, off your AR. 

2. Aim for “Clean Claims” the First Time 

Every rejected claim ends up in increasing AR. However, most claims are rectified and sent back to payers for further review and reimbursement. It adds unnecessary delays and affects the clinic’s cash flow. Hence, clinics must ensure they submit clean claims that will have a maximum first-pass acceptance rate.  

To maintain optimum claim accuracy, providers should invest in claim scrubbing software. It will enable them to catch errors early. Moreover, they must arrange periodic training for their billing staff. The training should include the latest coding changes and regulations. Above all, setting up standardized workflows streamlines the entire RCM process. It ensures every staff member knows their responsibilities. Also, they perform them with efficiency. A higher first-pass resolution rate means fewer reworks and faster cash. 

3. Build a Smarter Denial Management Process 

Claim denials are a significant cause behind piled-up accounts receivable. We have observed that one in every ten claims ends up on the denial lists. Over time, it accumulates as backlogs and requires an expert’s attention. Regular healthcare staff juggling care and bills do not get adequate time to solve claim errors.  

To get rid of denials, providers must track denials by type and payer. It will help them find recurring issues. After detection, they should assign a dedicated team or specialist to handle appeals. They must ensure no denied claims go unattended. Moreover, healthcare accounts receivable services should focus on automating reminders to follow up. It will ensure they will not miss payer deadlines under any circumstances. 

4. Track AR Metrics Religiously 

To eradicate piled-up payment dues, tracking healthcare accounts receivable metrics is pretty essential. These metrics help to understand whether average AR days are having an upward or downward trend. Moreover, it gives a clear idea of how many AR are pending in the 60-day or 90-day buckets. Moreover, they can check out their first-pass acceptance rate from these metrics. 

Regular reviews efficiently help healthcare accounts receivable solution providers stay current. This way, they can track which claims need follow-ups and which are on the safe side. Once they realize a claim might go into denials, they must track status with payers and address the issues as soon as the claim is rejected.  

5. Know When to Outsource 

For practices drowning in AR backlogs, healthcare AR management company offers a practical solution. The third-party medical account receivable outsourcing companies have dedicated AR specialists in their arsenal. Hence, they possess all the expertise to address AR with ease.  

Hence, practices struggling with piled-up AR should find a reliable outsourced partner to collect their pending accounts. It can be a game-changer for the practice. These trained experts will not only reduce AR days but also take care of the entire operation.  

Why SunKnowledge Stands Out as the Best Healthcare Accounts Receivable Company 

SunKnowledge has in-depth expertise in collecting pending accounts. We have a team of healthcare accounts receivable experts, who thoroughly examine every claim and provide an effective solution. We ensure a 97% first-pass acceptance rate, which enables us to eradicate even the smallest chances of AR from accumulating. Moreover, our team comprises legal experts, who can ensure maximum collections from pending accounts.  

Hence, if you are getting tensed after seeing your debts, give us a call and we will present result-driven solutions. Our main focus is to free up healthcare staff to focus on patient care only. We will handle the rest of the administrative tasks. 

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