How Can a Medical Billing Company Turn Aging AR Into Faster Payments?

Managing accounts receivable (AR) is one of the most important aspects of medical billing. Problems start to occur when claims are denied after submission. This calls for efficient denial management that can help reduce your aging AR by resubmitting corrected claims on time. In simple terms, aging AR refers to the money a provider has earned but not yet received. The longer this money stays in AR, the more difficult it becomes to ensure a smooth cash flow. This is when you must consider hiring a professional medical billing company that can reduce aging AR and unlock your potential for revenue generation.

This is why, with our expertise, we are here to share the ways in which an outsourced company can manage AR and also streamline the overall reimbursement process. Before diving in, let us get a quick understanding of why medical practices have aged AR.

Discovering the Reasons behind Aging AR in Medical Practices

When providers offer services to a patient, they do not receive the money instantly. Claims are submitted to payers for providing medical services to patients. This is where things may start to get complicated. Incorrect information or missing authorization are two common reasons why payers may deny claims. Correcting or appealing these claims within the applicable deadline can help prevent further payment delays. This helps in reducing aging AR and improving reimbursement rates.

The major reasons for this aging AR in physician billing are:

Incorrect patient information – The claims that you submit to the patient’s insurance company have a lot of important information on patient health and medical history. Any error in a patient’s name, insurance ID, or date of birth could result in claim denials. In this case, you do not receive the payment until the error is corrected. Moreover, every additional follow-up cycle increases the claim’s age. A delayed claim often requires manual intervention, causing it to move from current AR into aging AR.

Coding errors – The use of medical codes is essential to maintain billing accuracy. There can be cases where the submitted codes are incorrect or incomplete. Payers often reject claims if the codes do not support the medical services. The practice must correct and resubmit the claim before the deadline. However, each correction and resubmission adds days to the collection cycle. Thus, it can be said that coding errors lead to claim denials and reimbursement delays. This pushes balances into aging AR, which can become an issue for providers.

Coordination of Benefits (COB) issue – Patients may often have two insurance policies from different payers for a specific medical service. This creates complexities for providers to ensure proper medical billing. COB issues can lead to unpaid claims and aging AR when the payers do not have accurate information about the patient’s coverage. These delays put an additional burden on practitioners to correct and resubmit the denied claims. This significantly increases AR aging in medical billing.

As a healthcare provider, you must have come across a few of these errors in your practice. You must also be aware of the difficulties involved in rectifying the denied claims. On one side, you are engaged in providing treatment to patients, and on the other side claim denials are pushing you to focus on billing tasks. A third-party medical billing company can help address these concerns efficiently and ensure streamlined revenue cycle management.

Ways in Which a Medical Billing Company Can Reduce Aging AR

In today’s era of advanced technology, having an in-house billing team does not restrict you from hiring an external company. It must also be considered that most in-house staff have limitations that often restrict them from achieving the desired results. Hiring a professional medical billing company does not replace your in-house staff but provides the required support.

Specialized medical billing services help reduce aging AR in the following ways:

Analyze the AR aging report – When you let professionals handle medical billing, they implement detail-oriented processes and advanced methods. They analyze an A/R aging report to determine where unpaid revenue is stuck, why it is stuck, and what action is needed to collect it. The most important thing is to divide outstanding balances into a number of days.

The denied claims are typically categorized into the following:

• 0-30 days: Claims that are billed recently and may still be within the normal payment cycle
• 31-60 days: Review claims against payer processing timelines, claim status, and filing or appeal deadlines
• 61-90 days: Older claims that require more active intervention
• 91-120 days: High-priority accounts that have increasing collection risk
• 120+ days: Aged AR that requires immediate follow-up, appeals, or write-off review

Professional billing companies analyze AR by insurance payer to determine whether a particular insurer is responsible for a disproportionate share of outstanding balances.

Identify and resolve claim denials – Most billing companies excel in identifying denied claims and correcting them. This extensive process starts with the denial reason and ends with either payment, a successful appeal, or an appropriate adjustment.

You may also wonder how a professional company differs from your in-house team when it comes to resolving claim denials. This is because an outsourced medical billing company uses advanced tools and updated software to manage claims. The rejected or denied claim is also matched against the AR aging report. This helps in identifying which denied balances are contributing to older AR.

Most importantly, their trained staff and certified coders ensure proper documentation and use accurate codes for reimbursement. They practically resolve all major claims that are denied because of missing authorization, COB issues, and missing documentation.

Follow-up on outstanding claims – Besides resolving denied claims, it is necessary to ensure proper tracking of outstanding claims. When you partner with a medical billing company, you get to witness a structured claim follow-up process.

Claims that are older and have higher value usually receive more attention. This is mainly because they represent a higher risk of cash flow.

Effective AR follow-up is not just about making phone calls. The specialized billing teams maintain follow-up queues and worklists so that unresolved claims are worked upon based on their priority. Most importantly, they detect the issue at its source rather than waiting for the claim to be denied. After a claim is resubmitted or appealed, the professional billing team verifies two things. They check whether the payer processed the claim and whether the payment matches expectations.

Partnering with a professional medical billing company is beneficial to providers in more ways than one. However, choosing the right partner is crucial to ensure security of patient data and efficient revenue generation. In today’s world of rapid changes in billing rules and different payer policies, medical billing outsourcing options have become a requirement for optimum results. While reducing aged AR can be a difficult task, especially when you are dealing with high patient volume and complex medical procedures, there is also expertise that can come to your rescue.

At SunKnowledge, we offer specialized medical billing solutions with dedicated account managers, prior authorization and reauthorization support, when required. We also ensure about 50% shrinkage of AR buckets within the first 30 days, improving the practice’s financials.

If you are struggling to reduce AR aging in your medical billing, hiring an expert medical billing company can be the right choice for you. Get in touch with our experts and witness a never-seen-before improvement in your practice.