Minimize A/R Aging and Improve Collections in 2023

A/R aging

Did the accounts receivables or A/R aging for your medical practice increase or decrease in 2022? We do hope you have that answer at your fingertips. Lack of attention to aging A/R can make collections messy and dent the cash flow for your medical practice.

Minimize A/R Aging and Improve Collections in 2023 - PracticeForces

Refer to the image above. An MGMA poll on aging A/R from a year ago summarizes a trend that we often see with new clients – aging A/R percentages have either increased or stayed the same in medical practices. A common reason for the rise in A/R balances is the inability of medical practices to dedicate staff to the arduous process of aging A/R tracking and resolution. Many practice leaders also point to an increase in payor denials and the burden of prior authorizations.

What is A/R Aging?

Days in A/R are the total A/R divided by your practice’s average daily charges billed.

AR aging is monitored from when the patient or insurance company is billed. A/R aging buckets are

  • 0 to 30 days
  • 31 to 60 days
  • 61 to 90 days
  • 91 to 120 days
  • And greater than 120 days

As per 2021 data published by MGMA, the median A/R greater than 120 days for multispecialty practices was 13.54%. Minimizing the A/R aging as you begin a new year is essential for the following reasons.

  • AR clean-up will reduce the value of claims you have to send to the collection agency.
  • It will reduce the administrative burden on your practice staff.
  • It will improve your cash flow situation.
  • It will give you more room to invest in initiatives such as workflow automation to improve accuracy in medical billing and the patient experience.

Tips to Reduce A/R Aging

For your medical practice to be on a ‘healthier’ note in 2023, you must declutter aging A/R and implement initiatives to improve practice collections. Here are four tips to help your medical practice reduce A/R aging and collect more in 2023.

  1. Review your existing A/R aging accounts data

As dull as it may sound, playing the ‘data detective’ is the first place to start. Review the aging accounts to assess why the claims could not be collected. Here’s what you may find:

  • There was an inadequate or delayed follow-up after a claim had been denied.
  • A particular payor or category of claims contributes the bulk of your claim denials.
  • The claims were denied due to avoidable lapses. This could be a patient demographic error, prior authorization not obtained, expired insurance, lack of chart notes for a date of service, information of referring physician not included, or co-pays, coinsurance, and deductibles not collected at the time of service.

These errors can be minimized in the coming year if you improve the claims follow-up and claims scrubbing processes at your medical practice. Have your staff verify the patient information demographics and insurance card data prior to each visit. Ensure that the collected information is updated on the practice management system.

It may be worth writing off small unpaid patient balances over the last few years. Similarly, review outstanding balances from deceased patients, patients who have left the practice, or now defunct payors. Purging these old records will help you focus collection efforts on accounts that can be recovered.

For large outstanding balances, continue taking appropriate collection and legal measures.

  1. Improve collections from patients before the date of service

When patients ask for balances to be added to their bill at the end of a medical service, it dramatically increases the time and effort required to retrieve those balances. To significantly improve patient collections, ensure your practice has the following steps in place before the patient appointment date:

  • Check patient insurance eligibility.
  • Check existing patient balances.
  • Communicate the cost of service and outstanding balances via email, phone call, and text.
  • Inform the patients that they must make the payment before the visit.
  • Ensure you have a valid card to collect the balance due.
  • Offer multiple payment options, including online payments through your practice website and patient portal.
  1. Ensure that all your providers are credentialed with all the payors.

Another MGMA confirms that credentialing-related denials have increased. Only a small percentage of healthcare enterprises managed to reduce denials regarding credentialing over the same period. Refer to the image below.

Minimize A/R Aging and Improve Collections in 2023 - PracticeForces

Additionally, failing to update provider information on the CAQH profile can threaten your payor contracts. Read these nine tips on improving the credentialing processes at your medical practice and minimizing out-of-network claim denials.

Recommended reading – 9 Medical Billing Tips to Improve Claims Approval Rate

4. Outsource A/R review and collections

As you take the above administrative measures to collect more balances upfront and minimize denials, you must continue to run and analyze collection reports. A weekly and monthly analysis will help identify the problematic trends and take corrective steps to improve your performance in those aspects. However, if your staff does not have the capacity to take on the added responsibility of following up on receivables and analyzing the practice’s financial performance, consider outsourcing A/R review and collections. Outsourcing A/R clean-up will reduce the volume of claims you have to send to collection agencies, free your internal staff and decrease write-offs.

Claim a free A/R review worth 5 hours from PracticeForces. Once you submit an A/R aging request and give us access to your data, an independently certified coder will analyze your claims data. We will identify payor issues and coding issues. We will identify how much is collectible or needs to be written off. If you are happy with the initial results, we will continue to work on the A/R cleanup of your healthcare enterprise. Contact us to know more.

 

 

 

 

Parul Garg, CEO and co-founder of PracticeForces, has significantly contributed to the growth of over 1,000 U.S. medical practices through her expertise in medical billing and coding since the company’s inception in 2003. With a background in Computer Science and an MBA in Human Resources, her leadership and AAPC-certified coding skills have been pivotal in managing the company’s operations effectively.

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