Money owed to your practice does not do much good sitting in accounts receivable. The longer claims and patient balances remain unpaid, the harder they become to collect. Healthcare accounts receivable management is one of those areas that can make or break a practice financially. Get it right, and cash flows steadily. Get it wrong, and you find yourself wondering where all that revenue went.
Let’s walk through some practices that actually work when it comes to keeping your A/R healthy and your cash flow moving.
Know Your Numbers
You cannot fix what you do not measure. Before making any changes to your A/R processes, you need to know where you stand. A few metrics deserve your attention more than others.
Days in Accounts Receivable
This number tells you how long it takes, on average, to collect payment after a service is provided. Lower is better. Most practices aim for somewhere between 30 and 40 days. If your number creeps above 50 or 60, something in your process needs work.
Calculate this regularly and track it over time. A sudden increase signals a problem that needs investigation. Maybe a major payer changed their processing times, or maybe your follow-up process slipped.
Aging Buckets
Break down your A/R by age. How much sits in the 0-30 day bucket? How much has aged past 90 days? The older a balance gets, the less likely you are to collect it. Industry data suggests that collection probability drops significantly after 90 days.
Reviewing aging reports weekly helps you prioritize follow-up efforts. Focus energy on the accounts most likely to pay rather than chasing ancient balances that probably will not convert.
Clean Claims from the Start
The fastest way to improve A/R is to submit clean claims the first time. Every denial adds days or weeks to your collection timeline. Every rejection requires staff time to correct and resubmit.
Front-End Verification
Insurance verification should happen before the patient arrives. Confirm coverage, check for authorization requirements, and verify that patient information matches what the payer has on file. Catching errors at this stage prevents denials later.
Train your front desk staff to verify insurance for every visit, even for established patients. Coverage changes happen more often than you might expect. A patient who had insurance last month might have switched plans or lost coverage entirely.
Coding Accuracy
Incorrect codes cause denials. Your coding team needs to stay current on guidelines and payer-specific rules. Regular audits of coded claims help identify patterns of errors before they become expensive problems.
When denials do occur, track the reasons. If the same coding error shows up repeatedly, address it through training or process changes. Fixing root causes prevents future denials.
Work Denials Quickly
Denials will happen no matter how clean your claims are. What matters is how fast you respond. A denial that sits in a queue for three weeks is much harder to overturn than one addressed within days.
Daily Denial Review
Someone on your team should review new denials every day. Categorize them by reason and prioritize by dollar amount and filing deadline. High-value claims nearing their appeal deadline should move to the front of the line.
Create templates for common appeal scenarios. When a denial comes in for a reason you have seen before, staff should not have to start from scratch. Templates speed up the process and improve consistency.
Root Cause Analysis
Denials provide information about weaknesses in your process. If a specific payer denies claims for the same reason repeatedly, something systemic is happening. Maybe your staff does not know that payer’s requirements, or maybe your system is not set up correctly.
Track denial reasons over time and look for patterns. Addressing the underlying cause prevents future denials and improves your first-pass acceptance rate.
Patient Collections Matter Too
Payer reimbursements make up most of your revenue, but patient balances have grown significantly in recent years. High-deductible plans mean patients owe more out of pocket than ever before. Ignoring patient A/R leaves money on the table.
Collect at Time of Service
Your best chance to collect from a patient is while they are standing in your office. Train front desk staff to collect copays, coinsurance, and outstanding balances before the visit ends. Patients who leave without paying are much harder to collect from later.
Estimate patient responsibility before the visit when possible. Real-time eligibility tools can help calculate what the patient will owe based on their coverage. When patients know what to expect, they come prepared to pay.
Make Payment Easy
Offer multiple payment options. Online portals let patients pay at their convenience. Payment plans help those who cannot afford to pay everything at once. The easier you make it, the more likely patients are to pay.
Send statements promptly and follow up consistently. A patient who receives a bill six weeks after their visit may not remember what they owe or why. Timely communication improves collection rates.
Follow Up Consistently
Accounts receivable management is not a set-it-and-forget-it activity. It requires ongoing attention and consistent effort from your billing team.
Scheduled Follow-Up Cycles
Establish a schedule for following up on unpaid claims. Contact payers at specific intervals after submission. Document every call and every response. When you eventually need to appeal or escalate, you will have records showing your efforts.
Assign staff to work specific aging buckets. Someone should focus on claims approaching 60 days while another handles the 90-plus day accounts. This division of labor ensures nothing gets overlooked.
Payer Relationships
Build relationships with your payer representatives. Knowing who to call and having a contact who recognizes your practice can speed up resolution times. When problems arise, a good relationship helps you get answers faster.
Managing healthcare accounts receivable takes discipline and attention. The practices that do it well collect more of what they earn and spend less time chasing payments. Your A/R process directly affects your bottom line, so it deserves serious attention.