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Hospitals account receivables discrepancy

How To Fix Your Hospital’s Accounts Receivable Discrepancies

Accounts receivable are the money owed by patients in the healthcare industry. Neglecting hospital accounts receivable management leads to poor cash flow and revenue loss. Even if you follow all steps accurately and the payers may deposit the funds in the wrong account, enabling you to clean up the massive mess of accounts receivable inconsistencies. It is necessary to hire an expert team to address your cash flow issues and ensure a seamless billing process efficiently in case you are experiencing bad cash flow due to inadequate hospital accounts receivable management. Strong accounts receivable management can quickly transform the overall cash flow of medical practice. This blog discusses hospital accounts receivable discrepancies and how to fix them.

Understanding the Problem

Fixing the gap between the records and the actual money in the bank account is problematic. Handling a hospital’s revenue cycle is challenging enough in the best possible circumstances; it becomes even more difficult when you don’t know whose accounts payers are depositing revenue. Hospital accounts receivable cannot be reconciled until the remittance procedure is finished. However, it is challenging to balance the accounts and go on to the next stage of revenue cycle management without transparency into deposit irregularities. Account reconciliation is a time-consuming and lengthy process. Many hospitals decide not to handle the issue, yet neglecting it means that concerns related to accounts receivable will never be resolved.

Common Hospital’s Accounts Receivable Problems  

Here are some of the most typical hospital accounts receivable problems and their solutions to maintain consistency.

Insurance Claim Denial

Denied insurance claims are one of the most common hospital accounts receivable issues. Healthcare organizations can lose up to 10% of their potential income as a result of poor denial management procedures. Insurance companies frequently deny claims for the following reasons: missing/incorrect information, multiple submissions, improper procedure, coding problems, and late filing. According to the Medical Group Management Association (MGMA), every healthcare organization should have a denial rate of 4%.

Solution – Your hospital accounts receivable management team must carefully analyze each claim form before submission to meet the requirements and maintain track of refused claims. You must look into the rejected claims and figure out what has to be submitted.

Unnecessary Write-offs

Some write-offs are required. Others result in high account receivables. You undoubtedly have too many if your practice does not have a written write-off policy. After a certain period, practices frequently write off unpaid accounts and deny claims without investigating alternative payment options. The write-offs add up to a higher net loss even if the balances are low. This eventually impacts the hospitals’ balance sheet because some patients are willing to pay in installments or may collaborate with you to lower their medical debt.

Solution – The team must review everything before writing off anything. Everything must be recorded in the books of accounts, whether the amount is higher or less. In this manner, you may ensure that your company does not go bankrupt. This is why your billing staff must establish an approval process for adjustments. Claims should not be changed unless there is a compelling reason. As a general rule, you don’t want to see write-offs for reasons other than exceeding the maximum permissible, and even then, you want to ensure your rates are being applied correctly. 

Bad Debt

With increasing deductibles and out-of-pocket expenses, many patients find it difficult to pay their bills, resulting in bad debt. Expanding bad debts has become one of the most prevalent mistakes in hospital accounts receivable management, even though the patient’s responsibility accounts for more than one-quarter of the healthcare industry’s revenue. Previously, the patient’s responsibility was limited to the duration of service, but this is no longer appropriate. It is essential to collect payment from the patient throughout the revenue cycle.

Solution – Your healthcare organization must collect all relevant billing and insurance information before providing the treatment and calculate the expected out-of-pocket cost. So, by checking coverage and insurance bills, the patient understands and accepts their duty.

835s and 837s

The payer file 835 and file 837 are crucial to resolving this issue. Payer claim data is contained in an 837 file. Healthcare organizations send them to payers electronically. The fact that the 837 files may include numerous claims simultaneously complicates matters even more. The 837s contain information regarding medical services delivered, treatment costs, and other changes. The EFT notice is contained in an 835 file. They are messages sent from payers to healthcare professionals containing information about the healthcare services being reimbursed. 835s record remittance information such as what costs have been paid for, decreased, or changed, as well as insurance information such as deductibles, co-pay amounts, claim dividing, co-insurers, and bundling.

Solution – The first stage in accurate execution is establishing transparency into individual hospital account receivable discrepancies. The team will need to produce a master record document that incorporates all cash postings from the previous day utilizing EFT, ERA (835), EOB (explanation of benefits), and business banking records. This mix of 835s, banking data, EOBs, and ERAs should provide more information about possible account posting discrepancies.

Inappropriate Account Receivable Management

Improper account receivable management in medical practice can result in loss, including bad debts and a negative patient experience. Furthermore, you can examine rising bad debts in your accounting records.

Solution – You must thoroughly reconcile your bank statements to ensure that all transactions are correct and that no entries have been missed. This will assist you in preventing fraud and errors, allowing you to concentrate on your patients and treat them more successfully.

Tips for Fixing Hospital’s Accounts Receivable Discrepancies

Following are some of the important tips associated with account receivables and multiple discrepancies.

Follow-up with Outstanding Accounts

Patients with outstanding balances should be notified regularly. If they persist in disregarding these reminders, have your office call them. Phone calls are more complex to ignore than letters. If your patient ignores both, you may need to use a collection agency’s more severe collecting tactics.

Boost Billing Cycles

Medical offices frequently mail bills once a month, which impacts cash flow. Mail patient bills once a week and insurance bills twice a week. The sooner a bill reaches its intended receiver, the sooner it may be paid.

Build a team

Cash processing and accounts receivable errors are not issues that can be resolved by a single person but rather by a specialist team. The team must be detail-oriented individuals with extensive healthcare financial experience. If you construct this team internally, we recommend drawing from the billing and finance departments, as these disciplines will be used for accounts receivable. When hiring externally, search for applicants with experience in finance, billing, and revenue cycle management.

Begin the Account Reconciliation Process

When the team has discovered the deposit and record errors causing the unbalanced books, they can begin fixing them one by one. Going through the 835s and EOBs will offer the necessary information to reconcile the variances and determine where the cash should have been deposited. This manual procedure can take a long time. There are additional choices for healthcare firms wishing to save time.

Third-Party Services

To resolve healthcare cast posting concerns, hospitals must devote hundreds of work hours each week to carefully reviewing each record and comparing it to the deposit. Third-party healthcare companies have created systems that can rapidly reconcile differences, automatically balance the books, and remove unnecessary billing and finance teams to focus on process development elsewhere in the hospital.

How Can I-Med Claims Handle Your Hospital Account Receivable Management Process?

Professionals can reduce stress by having us for their hospital account receivables. Our billing expert inspects your claims for errors, follows up on denials, and improves your cash flow. Our expert billers and coders thoroughly analyze each claim while assuring prompt claim submission. Our professionals ensure that no write-offs or changes are made to claims without the client’s consent by managing hospital accounts receivables properly. We offer devoted resources to get your payments forward. We have an experienced resource that can perfectly sort out any old hospital accounts receivable bucket. Our team understands how to handle appeals, underpayments, and denials. We have the proper strategy to establish your ROI requirements in the best possible way. Our understanding of claims adjudication requirements in inpatient billing sets us apart from any other medical billing company.

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