Every healthcare facility depends on a healthy revenue cycle, which is why effective accounts receivable management is an essential step in RCM. An accounts receivable is the payment that is to be collected from the patients or the insurance providers. It determines the revenue of your practice to a huge extent. The better you manage your accounts receivable, the greater the revenue of your practice will be. For a practice, it is very important that the payments are collected on time without a lot of delay, for its healthy functioning. Remember, the longer the days in AR, the higher the chances of payments going unpaid. As a result, effective AR management is what is required to prevent any unnecessary leakage in revenue and to collect the maximum reimbursement. However, managing accounts receivable is not as simple as it appears, rather, it is a difficult and exhausting task, and the practice and its staff frequently struggle with its management. Knowing and understanding the accounts receivable and the various processes involved in it can really help in improving your revenue cycle and increasing the revenue of your practice, making your accounts receivable management smoother and faster.
So, here are some of the processes involved in accounts receivable
Follow-up with insurance companies
Connect with the insurance provider for any details or additional information on insurance payment and regulation. This helps you stay up to date with the changing insurance policies and regulations so that you can submit your claims as per these updated rules and regulations and thereby avoid the denial of claims. Don’t shy away from maintaining continuous contact with the insurance provider as it could make your claim submission process easier and more effective.
Establishing credit terms and policies
Boundaries should be set, and policies must be put in place before providing any service to avoid any loss in revenue and protect the practice from any possible risks. Failure to establish such policies or raise patient awareness can result in payment delays or nonpayment. This can ultimately hurt your practice’s relationship with its patients. Make sure you communicate clearly with your patients about the payment process and other requirements so that they are not put in situations that make them feel uncomfortable or uneasy.
Collecting accurate information
Collect accurate information from your patients. Any inaccuracy in it can lead to the denial of claims. Also, stay up to date with this information, and know when changes happen. Various patient information and data, including personal as well as insurance data, needs to be collected before providing any services.
The accounts receivable process cannot proceed without a proper invoice stage. Therefore, it is crucial to establish an organized process for producing and sending invoices. Patients often anticipate receiving notification of the amount they are meant to pay. Some even wait to see the total amount before making a payment. It is important as it provides your patients with clarity on transactional information. But always ensure that you send the invoices as soon as possible, because the longer it takes to send the invoice, the longer it takes for patients to make the payment.
Tracking claims is another important step in maintaining a healthy accounts receivable and, thereby, a successful revenue cycle. Make sure that you keep proper track of your claims even after the submission. This helps in identifying claim denials on time and also helps identify the different reasons for claim denials. This can help the practice take steps to prevent such denials from occurring again. Tracking claims could be your perfect solution for reducing claim denials, thereby increasing the revenue of your practice.
Recording AR activity
Recording all the payments received is another important step in managing accounts receivable. Remember to record every incoming payment so that the claims that go unpaid and the ones that take too long to get paid can be identified. This helps the practice to take steps to prevent the same from happening again and helps the practice identify patients who are at constant risk of never making their payment. Therefore, proper documentation of payment is necessary for the growth of practice.
Establishing payment terms and due dates
It is important to establish proper due dates and payment terms for your patients as there are high chances that they may forget about the payment or may not realize the seriousness of delaying payment. Establishing such due dates reminds them of their obligations and also helps in reducing delayed payments, thus ensuring maximum payment collection. To avoid misunderstandings, the practice should clearly define their payment terms, due dates etc., to their patients from the beginning.
Identifying and managing denials
Most of the revenue of a practice is lost in claim denials. Therefore, it becomes highly important for a practice to identify and avoid denials of claims. Even if a claim denial occurs, make sure that you rework and resubmit the claims as soon as possible to avoid further loss in revenue. Managing claim denials can be a demanding and exhausting task, but it is equally an important one that cannot be kept aside. Identifying and managing claim denials helps effectively collecting payments.
Final payment collection
This is the last step in the accounts receivable as well as revenue management cycle. It is the process in which all the due payments are collected from the patients or the insurance providers. Offer your patients a simple and straightforward payment option. This helps in increasing patient comfort and experience, thereby gaining their trust. Formulate the payment process as easily as possible for your patients to make the whole payment cycle a lot faster and smoother.
Why partner with an RCM service provider?
Managing the various steps involved in accounts receivable along with the other processes involved in RCM can be a very stressful and hectic task, disturbing the entire working of your practice. Partnering with an experienced RCM service provider could be your perfect solution. As they help you with managing your RCM, including accounts receivable, with the help of their expert professionals, you can provide your undivided attention to other important aspects of your practice, including patient care and treatment. They help in handling all your complex RCM related worries and create a peaceful environment in your practice.
Accounts receivable is, undoubtedly, a difficult and complex task, but it is also one of the most crucial processes in RCM. Make your AR process as fast as possible and reduce your days in AR to a minimum. Claims with account receivable days above 90 are at a high risk of going unpaid. A dedicated and well-managed AR can lower your lost revenue to a great extent and can take your practice on the path to success.