Medical billing companies act as an important link between healthcare providers and insurance companies. These billing experts aim to maximize reimbursement and reduce the rate of claim denials. Medical accounts receivable (AR) refers to the outstanding payments owed to healthcare providers for services that are already rendered. The outsourced billing companies work towards reducing the AR so that the cash flow is maintained in healthcare centers. They offer streamlined medical accounts receivable services to improve cash flow in the system. It often becomes difficult for the in-house staff to manage the complex requirements of medical billing. This is when hiring an outsourced billing company becomes valuable to providers.  

 

Major AR terminologies used in Medical Billing 

  • Days in Accounts Receivable (AR) - This is the period between the service provided and payment received. The average number of days in AR cycles usually range from 30 to 45 days in most healthcare specialties. If outstanding balances are collected in less than 30 days, it is considered beneficial to healthcare providers. 
     
  • AR days formula - It helps to understand the time taken to collect payments. Calculating average AR days helps organizations evaluate collection efficiency. 
     
  • AR follow-up - An AR professional would ensure that proper follow-ups are being done. This would help in clearing out any unpaid claims and contacting payers for any pending amount. 
     
  • AR aging- It is a report that helps identify denied claims that require correction, patient balances that need to be collected, and billing workflow issues. An increase in aged AR balances leads to loss of revenue since this money is not recovered.  
     
  • Collection rates - It refers to the percentage of collectible revenue that is successfully recovered. If the collection rates of any medical billing company are high, it means that the claims are reimbursed effectively. 

 
Benefits of effective Accounts Receivable Management 

  1. Time-saving process – In claim reimbursement, there is a time gap between the patient being charged and the insurance amount paid to the provider. Claim reimbursement usually takes around 30 to 45 days. Effective AR management helps reduce this time to a minimum number of days. AR management includes tracking and recovering outstanding balances until full payment is received. 
     
  2. Regular follow-ups: AR companies frequently follow up on claims to maintain a uniform cash flow. Medical AR professionals contact the payers as well as patients to investigate the claims and perform any necessary corrections. This process of claims follow-up also helps to recognize any pattern in delayed payments or denials.  
     
  3. Timely claims submission – A proper accounts receivable will ensure that the claims are submitted on time to the insurance companies. If there are any updates or changes required after submission, the medical billing company will correct those to complete the billing process. 
     
  4. Consistency in cash flow – Effective AR management is essential for maintaining steady cash flow because it helps ensure payments are collected as quickly and completely as possible. Skilled AR professionals ensure that the healthcare facility runs efficiently with no interruptions in revenue earnings. 
     

How outsourced companies reduce aged medical AR 

  1. Implementing technology – The use of updated billing software can reduce errors and provide timely reminders for claims processing. This helps in automated claim scrubbing to detect coding errors, missing patient data, and duplicate claims. Most professional medical accounts receivable services use electronic claim submission systems. This assists in reducing claim processing delays to a great extent.  
     
  2. Effective verification – Before processing the claims, the billing companies verify the documents and insurance policies of the patient. This prevents any further delays in the claim reimbursement process. If a procedure is not covered under the patient’s insurance plan and the provider performs it anyway, they do not get reimbursed. With trained staff, outsourcing ensures that there is proper verification of the patient’s insurance policy.  
     
  3. Communication and education – Most of the payments are delayed due to confusion, missing information, and poor coordination between providers and payers. The billing companies also inform patients of their outstanding amount. Medical accounts receivable services will work effectively if there is clear and documented communication between providers, payers, and patients.  

 

Important factors of Medical Accounts Receivable Services 

It is important to maintain an effective accounts receivable process to ensure that there is no interruption in revenue cycle management (RCM). Following are the key benchmarks of medical accounts receivable:  

  • Days in AR - It refers to the average time taken to receive payments from insurance companies or patients after the providers’ services.  
  • AR over 90 days - This refers to the amount of AR which is older than 90 days. It signifies claims or invoices that have not been paid during this period. 

These benchmarks help to compare an organization’s AR performance with industry benchmarks. This would help you to select the best in the market and keep you updated with the latest medical billing regulations. 

 
Why do you need to hire outsourced companies? 

In the healthcare industry, there are many companies that provide billing services with high success rates. Outsourcing accounts receivable services help to reduce all the possible errors in the billing process. The in-house staff could often feel overwhelmed due to the extensive amount of effort required in the billing process. It not only reduces the burden of physicians but also provides streamlined services at reduced expenses. With streamlined medical accounts receivable services, these outsourced companies assist providers to prevent revenue loss and improve cash flow. It is also interesting to note that these third-party professionals take care of end-to-end RCM services. This includes documentation, coding, prior authorization, and other necessary reimbursement methods. 

 

There are companies that offer benefits such as 30% shrinkage of AR buckets within the first 30 days, reduction of costs up to 80%, HIPAA-compliant services, all-inclusive pricing, and dedicated account managers. These advantages not only reduce aged ARs but improve the overall reimbursement rate in medical billing. If your medical practice is struggling with aged ARs and increased rate of claim denials, now is the time to contact the billing experts.