While there are some upfront payments associated with medical services, many patients will pay after the fact. The trend makes managing accounts receivable in healthcare a crucial task for medical practices wanting to stay in the black.
What are accounts receivable in the healthcare sector? Like other industries, accounts receivable refers to unpaid charges from patients who have received care, either as individuals or via insurance payments. Healthcare practices typically classify accounts receivable by the account’s age, usually in cycles of 30 days.
Managing what patients owe is only one of the revenue cycle management healthcare challenges you may face. If you need more assistance, consider a team like PracticeForces for comprehensive solutions to maintaining your practice’s profits, cash flow management, insurance collection, and workflows.
In the meantime, below are seven proven management strategies to reduce your practice’s bad debt and improve your accounts receivable in healthcare.
#1 Establish Clear Payment Expectations
Establishing clear expectations upfront makes it more certain you’ll receive payments from those you serve. For example, many practices require a payment responsibility contract so that there are legal or monetary implications for late payments.
Staying on top of accounts is essential for cash flow management and profit maximization. The older accounts become, the less likely a practice will receive the full amount owed.
#2 Require More In-Office Payments
Requiring copays, deposits, and upfront percentages at the time of service can reduce what your patients owe you overall. It might not lower your accounts receivable, but the policy will generally improve your practice’s cash flow.
#3 Decrease Cycle Lengths
Shorter pay cycles cut down on your accounts receivable balance. Why not establish these terms with patients within a payment responsibility document so that your payment policy is transparent?
#4 Follow Up Frequently
As accounts receivable age, the chance of receiving the full amount dwindles. To avoid accruing bad debt from these unpaid accounts, follow up with patients more frequently. Some practices worry about negative views of their customer service, but respectfully reminding patients of the agreement to pay is well within your rights.
#5 Conduct AR Reports
Do you track accounts receivable data in routine reports? It paints a comprehensive picture of your practice’s revenue cycle management. You can improve collection practices by examining factors such as:
- Average AR cycles
- Payment delays
- Aged accounts
- Collection rates
#6 Verify Insurance Information Before Providing Services
Unverified insurance can lead to issues when you file an insurance claim for services rendered. Verify a patient’s insurance before treating them.
#7 Consider Outsourcing Billing and Workflow Automation
Outsourcing your medical billing, cash flow management, and workflow automation to qualified experts reduces the logistical and financial burden on your practice. The experts will monitor your accounts receivable to allow you to focus on providing excellent healthcare. Qualified accounts receivable management services can also significantly improve your revenue collection cycles.
Would you like experts to help you maximize your profits, optimize cash flow management, and improve workflow? Let our team handle it. For more information about improving your accounts receivable in healthcare or outsourcing medical billing, call PracticeForces at (727) 202-5429 today!