Though most medical practices have accounts receivable policies about billing and collection, most don’t implement it efficiently, leading to outstanding dues. This obviously hurts the cash flow, and could hamper payment of wages, upgrading equipment, and so on.
The 4 most common problems faced are:
1. Denial of Insurance Claims
This is the most common issue in medical accounts receivables is denial of claims by insurers. If there is no efficient strategy for denial management, your revenue and profitability can be badly hit. Ideally, the denials should not be more than 4%.
The accounts receivables service provider will review every claim before submitting, to ensure that they meet the prescribed guidelines. They will also diligently follow up on denied claims, investigate them, and note what needs to be done to get them passed.
2. Needless write-offs
Lower amounts that remain unpaid are often ignored by in-house billing or accounts receivables teams, but this adversely affects your balance sheets.
The company providing you accounts receivables services will follow up with patients to determine who is willing to pay in instalments, and if they can come to some solution with them to reduce their medical debt. They will review every single bill before they write it off, regardless of the amount. This will help prevent loss of revenue for your practice or hospital.
3. Bad Debts
Bad debts are soon becoming a huge problem for medical accounts receivables. The patient’s contribution is over a fourth of the revenue in medical billing. Previously, it was only at the time of service that the patient was responsible, but now, it is essential that the payment is collected from them throughout the entire revenue cycle. The accounts receivables services team will gather all the required info about billing and insurance before the service is provided, and they will calculate the expected cost patients need to pay themselves. Once the coverage and insurance bills are verified, the patient understands and agrees to their responsibility.
4. Collection Culture
Following up on and collecting payments is not the primary work of healthcare professionals – their aim is providing quality care to patients. Of course, you need to get paid for your service; without that you cannot continue to practice and provide care.
If you outsource collections to an accounts receivables services provider, they will have the right tools to make sure that all payments are collected in time. They have the expertise and the technology to ensure that your revenue cycle is not affected – eventually leading to better patient care and retention.
High percentage of accounts receivables can negatively impact your practice; but an experienced accounts receivables services company can make sure to keep it low and follow up on unpaid claims to ensure smooth revenue flows.