Optimize Your Healthcare Accounts Receivable for Better Cash Flow

Patient relationships: Clear and timely communication about billing procedures fosters trust and improves patient satisfaction. Also, A/R in healthcare can be assessed in several ways by a practice. First, “Days in A/R” is typically calculated by dividing total accounts receivable by the average daily charges of the practice. Second, accounts are often categorized by their aging, such as: 

• 1 to 30 days since billing
• 31 to 60 days since billing
• 61 to 90 days since billing
• 91 to 120 days since billing

What is the Healthcare accounts receivable benchmarks?

1. Maintaining healthy accounts receivable in healthcare involves tracking several critical revenue cycle management (RCM) key performance indicators (KPIs). Key benchmarks to monitor include:
2. The average Days in A/R: This metric reflects the average time it takes for your practice to receive payment from patients or insurance companies after an appointment. Industry experts recommend keeping your average days in A/R at 35 days or fewer.
3. All the A/R Over 90 Days: This percentage indicates the amount of A/R that is older than 90 days, representing invoices or claims that remain unpaid for this duration. Experts advise maintaining this figure at 10% or less.
   Consistent A/R Reporting: Regularly running A/R reports is essential for effective revenue cycle management. The objective is to keep A/R days low, which requires diligent tracking. Analyzing A/R data monthly can reveal troubling trends or persistent issues in payment collection. These reports should cover:

• Average A/R cycles
• Delays between services rendered and invoicing
• Aged accounts
• Collection rates

By closely monitoring these benchmarks, you can optimize your accounts receivable processes and improve your overall financial health.

In fact, here are a few important keywords that one should know while managing healthcare Accounts receivable:

A few Medical Accounts Receivable Management terms that you should know:

AR days formula – The A/R Days formula helps you assess how long it typically takes to collect payments. Calculating the average days outstanding provides valuable insights into your practice’s efficiency. A shorter A/R Days figure indicates effective collection processes, while a longer figure signals areas needing improvement.

AR follow-up in medical billing – For healthy AR, a proactive follow-up is quite essential here. So regularly reviewing unpaid claims and contacting patients and insurers for payment updates can significantly reduce the number of overdue accounts.

Average A/R Cycles: The typical duration from when a service is provided to when payment is received.

Delays Between Services Rendered and Invoicing: The time gap between delivering care and sending out invoices to patients or insurers.

Aged Accounts: Accounts that have outstanding balances for an extended period, indicating potential collection issues.

Collection Rates: The percentage of billed services that are successfully collected within a specific timeframe.

Reasons for increase in days in Healthcare Accounts Receivable:

• Delays in Claim Submission
• Insufficient Insurance Eligibility Verification:
• Errors in Coding
• Data Entry Mistakes
• Rising Claim Rejection Rates
• Ineffective Appeals Process
• Credentialing Delays
• Inaccurate Payment Posting
• High Out-of-Pocket Costs

Strategies to Improve Your Medical Accounts Receivable

Streamlined healthcare billing processes – Use Technology: Implement billing software that automates claims submissions and tracks outstanding balances. This reduces errors and speeds up the billing process.

Standardize processes: Create a standardized workflow for billing and collections, ensuring all staff are trained on best practices.

Regular monitoring of A/R Reports – Analyze A/R aging reports to identify trends and common issues, such as frequent denials or delays from specific payers. Regular monitoring helps you make data-driven decisions.

Patient education and communication – Inform patients about their financial responsibilities upfront. Provide clear billing statements and offer various payment options to facilitate timely payments.

Utilizing technology – Invest in tools that provide real-time insights into your A/R status. Automation can significantly enhance efficiency, from appointment scheduling to billing and collections.

Insurance verification – Conduct thorough insurance verification before services are rendered. This minimizes the likelihood of claims being denied due to coverage issues.

Denial management – Develop a systematic approach to manage claim denials. Understand the reasons for denials and establish protocols to address them swiftly.

Your trusted partner in Healthcare Accounts Receivable excellence

At Sunknowledge, we help you optimize your healthcare accounts receivable management to the maximum. In solutions for your A/R processes, we are tailor-made and comprehensive. It aims to ensure improvements in end-to-end processes:

• End-to-End A/R Management: We offer one-stop-shop management of your entire A/R process, with follow-through and final billing, and with our accounts received on time, keeping the days held within the A/R cycle at low levels.
• Advanced Analytics and Reporting: Our approach, based on data, helps you gain insights into your A/R performance so that you can identify the inefficiencies present and take corrective measures.
• Patient engagement solutions: We explain patient billing in more layman’s terms and insist on regular reminders so that they feel responsible for timely payments.
• Integration with technology: We facilitate clients to integrate the most contemporary billing software that automates processes, thus bringing them the most current updates about better efficiency.

Sunknowledge’s accounts receivable services credentials

• Invoices processed/FTE/month – 1.1K to 1.2K
• AR follow-ups/FTE/day – 50 to 55
• Denials handled/FTE/day – 40 to 45
• Average claim dollar value – $350 to $400
• Minimum first-pass rate – 93%
• Percentage of High dollar claims processed/month – 38%
• Small to medium dollar-value claims processed – 65%
• 80% lower cost-to-collect
• 97% growth in collections
• 30% A/R reduction in 1 month
• <1% write-offs
• Average AR collections/month – $250 to 300 million
• Nearly two decades of expertise in healthcare AR analysis & management

Our top specialties for AR – Hospital AR, DME, HME, Ambulatory Services, Radiology, Cardiology, Urgent Care, Mental health, Oncology, Immunology, Neurology, Sleep Therapy, DME, dental billing and more

Our skilled FTEs in healthcare accounts receivable (AR) services ensure timely payments and recovery of old and recent receivables for healthcare organizations. Additionally, they help save on labor and admin expenses.

Partner with us means we are here to take care of all your accounts receivable worries, so your practice can experience a healthy business. helping you focus on the best delivery of patient care, we are here to help simplify your processes and, hence, improve the cash flow by bringing out the best in your medical billing and A/R management system.

What makes Sunknowledge’s Healthcare Accounts Receivable Services different?

• Lower direct expenses by reducing payroll costs and benefits
• Lower AR Days and cost-to-collect
• Higher revenue realization rate owing to effective healthcare AR management strategies
• Improved Collection Effectiveness Index(CEI)
• Access to experienced healthcare AR specialists without the need to train or re-hire
• No requirement for office space or equipment
• Collection rate growth resulting in improved cash flow and collection rate
• Reduced claim denials from claim scrubbing and denial management expertise

Contact Us Today 

Are you ready to optimize your accounts receivable and enhance your financial health? Contact Sunknowledge today for a consultation, and let’s work together to elevate your medical billing processes! 

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