{"id":17845,"date":"2023-07-07T14:19:44","date_gmt":"2023-07-07T19:19:44","guid":{"rendered":"https:\/\/imedclaims.com\/?p=17845"},"modified":"2023-07-07T14:19:45","modified_gmt":"2023-07-07T19:19:45","slug":"guide-to-account-receivable-management","status":"publish","type":"post","link":"https:\/\/imedclaims.com\/guide-to-account-receivable-management\/","title":{"rendered":"A Guide to Successful Account Receivable Management in Medical Practice\u00a0"},"content":{"rendered":"\n

Account Receivable<\/a><\/strong> Management is an essential aspect of medical practice management. It involves managing and tracking the payment of outstanding invoices from patients and insurance companies. Efficient management of accounts receivable assists medical practices in upholding a stable cash flow, mitigating bad debts, and enhancing the overall financial well-being of the practice. This guide will discuss the key steps to successful account receivable management in medical practice.<\/p>\n\n\n\n

Understanding Account Receivables<\/strong><\/h2>\n\n\n\n

Account receivables refer to outstanding payments due to a business for goods or services provided to customers on credit. In medical practice, account receivables are the outstanding payments due to healthcare providers for medical services rendered to patients.<\/p>\n\n\n\n

Components Of Account Receivables<\/strong><\/h2>\n\n\n\n

The components of account receivables in medical practice include:<\/p>\n\n\n\n

Patient information:<\/strong> <\/h3>\n\n\n\n

This consists of the patient’s name, address, phone number, and insurance information.<\/p>\n\n\n\n

Service codes:<\/strong> <\/h3>\n\n\n\n

These are the codes used to identify the medical services provided to the patient.<\/p>\n\n\n\n

Charges:<\/strong> <\/h3>\n\n\n\n

This refers to the amount charged for the medical services provided to the patient.<\/p>\n\n\n\n

Insurance payments:<\/strong> <\/h3>\n\n\n\n

This includes the payments made by the patient’s insurance provider for the medical services rendered.<\/p>\n\n\n\n

Patient payments:<\/strong> <\/h3>\n\n\n\n

This refers to the payments made by the patient for the medical services rendered.<\/p>\n\n\n\n

Adjustments:<\/strong> <\/h3>\n\n\n\n

This includes any adjustments made to the account receivable, such as discounts or write-offs.<\/p>\n\n\n\n

Types Of Account Receivables In Medical Practice<\/strong><\/h2>\n\n\n\n

There are two main types of account receivables in medical practice:<\/p>\n\n\n\n

Current account receivables:<\/strong> <\/h3>\n\n\n\n

These are the outstanding payments due to healthcare providers for medical services rendered within the last 30 to 60 days.<\/p>\n\n\n\n

Past due account receivables:<\/strong> <\/h3>\n\n\n\n

These are the outstanding payments due to healthcare providers for medical services rendered more than 60 days ago. Past due account receivables can be further classified based on the time the payment has been outstanding, such as 60-90 days past due, 90-120 days past due, and more than 120 days past due.<\/p>\n\n\n\n

Key Steps To Successful Account Receivable Management <\/strong><\/h2>\n\n\n\n

Managing account receivables is essential for the financial health of medical practices. Healthcare providers must ensure an efficient system to track and collect outstanding payments from patients and insurance providers. This can include sending regular reminders, following up with insurance providers, and implementing payment plans for patients who cannot pay their bills in full.<\/p>\n\n\n\n

Step 1: Verify Patient Eligibility and Benefits<\/strong><\/h3>\n\n\n\n

Before providing any medical services, verifying patient eligibility<\/a><\/strong> and benefits with their insurance provider is crucial. This step helps to ensure that the services provided are covered by the patient’s insurance plan, reducing the risk of denied claims and delayed payments. Verifying patient eligibility and benefits also helps to determine the patient’s financial responsibility, such as copays and deductibles, which can be collected during service.<\/p>\n\n\n\n

Step 2: Accurate and Timely Billing<\/strong><\/h3>\n\n\n\n

Accurate and timely billing is critical to successful account receivable management. Medical practices should ensure billing for the correct services, using the correct codes and modifiers, and submitting claims within the required timeframe. Delayed or inaccurate billing can lead to denied claims, delayed payments, and increased administrative costs.<\/p>\n\n\n\n

Step 3: Follow Up on Outstanding Claims<\/strong><\/h3>\n\n\n\n

Medical practices should regularly follow up on outstanding claims with insurance providers and patients. This step helps to promptly identify and resolve any claim issues, such as missing information or denied claims. Following up on outstanding claims also helps ensure that payments are received on time, reducing the risk of bad debt.<\/p>\n\n\n\n

Step 4: Implement a Collections Process<\/strong><\/h3>\n\n\n\n

Medical practices should have a collection process to manage overdue patient balances. This process should include sending regular statements, making collection calls, and offering payment plans to patients who cannot pay their balance in full. Implementing a collections process helps to reduce bad debt and improve cash flow.<\/p>\n\n\n\n

Step 5: Monitor and Analyze Accounts Receivable<\/strong><\/h3>\n\n\n\n

Monitoring and analyzing accounts receivable is essential to successful account receivable management. Medical practices should regularly review their accounts receivable aging report to identify trends or issues, such as high overdue balances or denied claims. Analyzing accounts receivable help identify improvement areas and implement strategies to improve cash flow and reduce bad debt.<\/p>\n\n\n\n

Importance of Accounts Receivable to the Revenue Cycle<\/strong><\/h2>\n\n\n\n

Account receivable (AR) is a crucial component of the revenue cycle<\/a><\/strong> as it ensures timely and accurate payment for services rendered, ultimately maximizing revenue for healthcare practices. It includes the following:<\/p>\n\n\n\n