When it comes to your revenue cycle, continuous improvement is the key to success. Small enhancements to your medical billing operations can make a big difference in the consistency of your revenue stream by helping you dodge reimbursement delays and denials.
One key performance indicator for your back-office team to watch is average days in accounts receivable (or “A/R”) – which measures the usual number of days it takes for you to receive payments from insurers and patients for services rendered. To determine your average days in A/R, divide your total accounts receivable by your average daily gross charge (which is your total gross charges for the past year, divided by 365 days). The lower the number, the more quickly you’re getting your practice paid every dollar it deserves!
Every payer operates on its own payment timeline within a range of 30 to 90 days, but keeping your practice’s days A/R as close to 30 as possible should be your goal. As with all things related to the revenue cycle, adhering to common-sense best practices like collecting co-pays at time-of-service and working with a medical billing service can help you achieve better A/R outcomes. In addition, here are five smart tips that can help you enhance efficiency.
Try a batch eligibility system.
If you’re not performing eligibility checks in advance of your patient encounters, you’re likely seeing more denials and payment delays than necessary. Since conducting manual eligibility checks can be a timesuck on your staff, consider utilizing a tool that can automate the process: a batch eligibility system can provide a report detailing each patient’s current coverage and eligibility status, helping you catch any insurance changes that occur between the booking and encounter dates.
Create better billing statements…
Efficient A/R requires prompt payment from both payers and patients – so if your patients can’t comprehend your billing statements, it’s unlikely your days A/R is under 45. Revisit your statement template and make sure it’s as readable and patient-friendly as possible. We recommend using a clean design, large typeface, and bulleted lists detailing dates and charges.
...and send them out faster.
The quicker you get bills to patients, the more quickly you can expect payment (or follow up when you don’t receive it). Audit a selection of statements to check how long it typically takes for them to be sent; if it’s more than a few business days, work with your staff to figure out why it’s taking so long and resolve the issue appropriately.
Expand your payment options.
If you’re not already accepting online payments and credit cards, you’re setting yourself up for longer-than-necessary days A/R. Patients increasingly want to handle payments in the most convenient way possible – which rarely means sending a check in the mail – and are more inclined to pay right away when they can apply their balances to reward-earning credit cards.
Find your offenders (and go on the offensive).
As you invest in lowering days A/R, find the outliers who are keeping the metric too high. Calculate average days in A/R by payer, not just overall, to determine if there are one or two who consistently lag behind. If so, get them on the horn and address the problem – bringing up your payer contracts if necessary. And don’t let non-paying patients off the hook either: Sit down frequent offenders and put them on notice. If you don’t, it’s your bottom line that will suffer.
Are you interested in learning more revenue cycle management tips? Visit our blog!
...and if you need help from a medical billing company...
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