Strategies for Reducing Accounts Receivable Days and Improving Collections

The first step is assessing current accounts receivable and collection metrics:

• Days in accounts receivable (AR days) – Calculate average number of days from date of service to payment
• Bad debt percentage – Total bad debt write-offs divided by total charges
• Overall collection rate – Percent of total charges collected as payments
• Clean claim rate – Percent of claims submitted without errors
  

Several scenarios contribute to AR issues:

• Manual claims preparation errors leading to rejections and delays
• Insufficient payer follow up on pending claims
• Weak denial management and appeal processes
• Patient insurance eligibility issues like expired policies and coverage lapses
• Failure to collect copays and deductibles upfront per policy
• Lack of price transparency and estimates given to patients
• Long wait times contacting customer service or confusing bills
• Insufficient payment options and inconvenient automated systems

Addressing weak links proactively significantly improves financial outcomes.

Reduce AR days by applying proven tactics:

• Verify accurate patient insurance coverage details upfront before rendering services
• Obtain necessary pre-authorizations and referrals early in the process
• Ensure clinical documentation is complete before billing
• Scrub claims thoroughly with billing editors before submission
• File claims electronically for faster delivery and reduced errors
• Follow-up rigorously on unpaid or denied claims weekly
• Formally appeal all justified claim denials quickly with documentation
• Update patient contact information regularly to avoid billing delays
• Provide estimates and collect any patient responsibility amounts owed per policy at time of service

Staying diligent across the entire revenue cycle speeds proper reimbursement.

Targeted technology solutions also optimize AR outcomes:

• Automated patient insurance eligibility checks and documentation retrievals reduce manual effort.
• Claims scrubbing software catches submission errors before sending.
• ePrescribing into EHRs ensures accuracy and automatic documentation needed for billing.
• Rules-driven workflows expedite routine follow-up tasks on unpaid claims.
• Dashboards track AR performance metrics in real-time enabling swift response.
• Integrated practice management, EHR and patient billing systems decrease hand-offs.
• Tools like online patient appointment scheduling, registration, and bill pay portals increase convenience and payments.

Upgraded capabilities reduce manual workload and errors while accelerating cycles.

Diligent follow up prevents claims from falling through cracks:

• Make follow up central to daily workflows with assigned staff responsibility.
• Log all claims into tracking system and set timeline for follow up like 2 weeks after submission.
• If claim remains unpaid after 2 weeks, check status online and call payer for explanation if needed.
• For pending claims, monitor weekly and escalate internally if no response after 30 days.
• Measure average days pending by payer to expose slow responders.
• Report metrics on weekly follow-ups, dollars recovered, longest pending.
• Set system alerts on aging claims approaching timely filing limits.

Proactive follow up minimizes unpaid claims getting lost or exceeding deadlines.

Methodical denial and appeal management also improves collections:

• Log and categorize all claim denials for tracking and pattern visibility
• Identify most prevalent denial reasons like medical necessity and eligibility issues.
• Develop structured appeals process including templates for common scenarios.
• Appeal all denials unless contractual limitations exist. Avoid write-offs.
• Compile compelling denial-specific documentation like medical records and policy excerpts.
• Follow up on pending appeals after 30 days for status and escalate priority.
• Analyze outcomes to identify opportunities to boost appeal success rates.

Persistence and preparation generates higher overturned denials recovered.

Confirming active accurate insurance coverage prevents billing issues:

• Check patient eligibility with payer through portals or calls at every encounter.
• Verify details like name, DOB, policy number match card presented.
• Review effective dates, lapses, out of pocket accumulators, limits.
• Update expired policies in systems prior to submitting bills.
• Confirm coverage specifics for services planned like exclusions, prior authorization needs.
• Obtain new insurance card and authorization details at each visit.

Accurate eligibility reduces claim rejections and uncovered service write-offs.

Staff training ensures coordination with payer requirements:

• Review each major payer’s policies and protocol nuances annually. Create tip sheets.
• Highlight plan details like tiered networks, referral rules, prior authorization procedures.
• Share insurer insights like turnaround metrics, common denial reasons.
• Train staff on proper eligibility check and benefit verification processes. Audit periodically.
• Educate clinical teams on documentation needs to support billing codes.
• Cross train front desk staff handling authorizations on basics of coding and billing.

Aligning to payer particulars prevents avoidable claims issues.

Collecting patient owes maximizes point of service payments:

• Calculate copays, coinsurance, and unmet deductibles precisely at every visit.
• Confirm amounts owed through eligibility checks and health plan summaries.
• Collect all patient responsibility amounts at time of service before care.
• Ensure clinical and billing systems deduct owes to avoid double collection.
• Provide estimates and payment plans for large out of pocket expenses when possible.
• Offer multiple payment options – cash, check, credit cards, and online payments.

Collecting owes aligns with contract terms while securing revenue.

Payment rates improve when patients understand what they owe:

• Explain financial policies thoroughly upfront and provide written summaries.
• When scheduling, inform patients of their payment amount due based on their coverage.
• After appointments, share visit cost estimates and balances due through printouts, patient portals or emails.
• Provide detailed paper or digital statements clearly conveying amounts owed by service and dates.
• List how patients can pay through online portal, automated phone system, mail, or in-person.

Clarity on balances due enables patients to take payment initiative.

Structured workflows prompt collections:

• Load balances into patient billing system immediately after visits.
• Set system rules to automatically generate paper or digital statements based on billing milestones.
• Enable online patient portal to access statements, balances, and payment options.
• Integrate automated phone, text, or email reminders about outstanding balances.
• Route past due accounts to staff for progressive outreach efforts – calls, letters, payment plans based on delinquency stages.
• Monitor metrics on collection rates by age buckets – under 30 days, 60 days, 90 days.

Automation provides consistency while reducing administrative burden.

Payment plans allow patients to pay large balances over time:

• Establish reasonable payment plan terms – duration, minimum amounts, payment methods.
• Provide online self-service portal for patients to enroll in plans and schedule installments.
• Accept automatic recurring credit card or bank payments to fulfill plans.
• Follow up at 30 and 60 days on overdue plans to re-engage patients.
• Structure terms to incentivize enrollment – no interest, relaxed timeline.

Accommodating plans aligned to your policies increases collection rates.

Equipped staff convert more balances to payments:

• Provide customer service training to handle billing inquiries professionally with empathy.
• Coach on proactive payment outreach, overcoming objections, and payment plan negotiation.
• Arm with latest details on fees and financial assistance policies to address patient concerns.
• Share strategies for following up persistently while maintaining rapport.
• Recognize top patient financial performers.

With knowledge and skills, staff become payment ambassadors.

Some providers enlist outsourced RCM services to improve collections through:

• Automation and streamlining of burdensome eligibility, claims, and collections workflows
• Access to specialized financial systems and technology
• Experienced teams trained in the latest payer practices and patient financial services
• Persistent claim follow up and active denial management to capture more revenue
• Ethical collection techniques that maintain patient satisfaction

Evaluate partners carefully based on costs, services, expertise, technology, and results.

Ongoing metrics identify when cycles lengthen or performance declines:

• Average accounts receivable days
• Denial and appeal rates
• Clean claim submission rates
• Bad debt and write-offs
• Patient payment collection rates
• Call abandonment rates
• Eligibility checks completed

Fixes can be implemented once patterns surface. Routinely share results with staff.

Major improvement initiatives warrant planning:

• Assemble cross-departmental teams with defined roles – data, technology, operations.
• Set quantifiable goals for reducing accounts receivable days and key collection metrics.
• Document current workflows end-to-end to identify pain points.
• Research root causes through data analysis and staff input.
• Develop project plans addressing people, processes, and technology.
• Budget for tools, training, and change management support.
• Phase roll outs with timelines guided by pilot testing and milestones.
• Measure results continuously and adjust course as required.

Thoughtful execution and buy-in shifts culture to a more financially fit operation.