Accounts receivable are legally considered assets of the business that holds them. They comprise the unpaid debt from fees for services and procedures performed – in our case, of a medical practice – and a bill has been sent or given to the payor for services rendered.
So why are medical administrators always worrying about accounts receivable? Because when people don’t pay these bills in a timely manner, what was an asset becomes a liability.
This actually ties up funds until those fees are collected. This can seriously interfere with the cash flow of a business until the fees are collected.
Most businesses use a system to keep track of their accounts receivable aging, or accounts receivables that are still outstanding. In an “aging report,” current debt would fall into a range of 0 (zero) days through 30 days.
The next range would be for bills in the 31-day range to 60-day range. From there is the 61-day to 90-day range, and at the 90-day range a practice should consider alternative methods such as using a collection agency.
Some bills display those ranges, but the problem with that is that patients may subconsciously think they still have time. By eliminating those ranges or payment months from the bill, the patient will assume the bill is due now.
By changing all receivables to “Due Now” regardless of how old the bill is, practices should be able to collect fees in a more timely manner.
Insurance Changes Cause Problems
If the patient is a new patient or has had a change of insurance, the office staff should always check the patient’s insurance eligibility prior to the office visit. It is also a good idea to identify and communicate the co-pay and any deductibles.
This communication can help prevent patients from being surprised with an extremely high co-pay because of high deductibles, or because they are not eligible for the visit to be financially covered.
Ways to Eliminate Items from an Accounts Receivable Aging Report
By always collecting patient co-pays at the beginning of the appointment, and not allowing service until payment is collected, revenue will remain in hand. It is best to run a daily accounts receivable report. Make sure that the report tallies with receipts on hand; and if a co-pay was not collected, make the person responsible explain why.
Bill insurance carriers daily instead of weekly. This will help the pipeline of incoming payments show up faster.
Outsourcing Your Billing and Collections
Our team at ProMD can take care of your medical practice’s billing and coding. Accounts receivable include the management of insurance approvals, collections, write-offs, and the careful analysis of insurance benefits to verify correct reimbursements.
If billing and collections are placing a strain on your medical practice, then put it in the hands of professionals who know the ins and outs of medical accounts receivable. We can help prevent your practice from making billing errors due to ever-changing insurance regulations.
Have your practice’s billing and collections taken over by ProMD, and watch your revenues jump dramatically within only the first few months. Contact us today by calling (844) 236-5488 or schedule a consultation online, and start reaping the rewards next quarter!