Accounts receivable, often abbreviated as A/R, refers to the money owed to organizations for services provided and billed. Payments from payers, patients, and other guarantors contribute to A/R. Ensuring correct and timely payments is a key objective for every organization.
A rise in A/R from one period to another indicates that payments aren’t being collected upfront as they should. Failure to address this issue can lead to cash flow problems. Additionally, the volume of services provided by hospitals, physicians, and nursing homes continues to grow. Each time patients receive medical care, they incur a financial obligation to the healthcare provider.
Why Do Healthcare Services Need an Accounts Receivable (A/R) Team?
Your medical practice’s accounts receivable follow-up team is responsible for managing denied claims and reopening them to secure full reimbursement from insurance companies. Gone are the days of handling revenue cycle and medical billing A/R management in-house. Today, these tasks require billing specialists with specialized skills to handle your organization’s A/R follow-ups.
It’s important to recognize that aside from accounts receivables, there are several other crucial processes such as payment posting, verification, and charge entry that must be completed beforehand. Amidst these processes, a medical billing professional determines the precise diagnosis code and procedure code based on the treatment plan.
There’s a possibility that insurance companies may deny claims if they don’t comply with the rules. Therefore, it’s essential to have a dedicated A/R staff who can follow up with the insurance company and resolve all denied claims promptly.
Phases of Medical Billing A/R Follow Up.
Many medical billing professionals conduct their accounts receivable (A/R) follow-up systematically, usually in three phases:
- Initial evaluation of medical A/R follow-up.
- Analysis and prioritization of medical A/R follow-up.
- Maximizing collections through medical A/R follow-up.
Initial evaluation of medical A/R follow up.
During this phase, the focus is on identifying and assessing all claims listed on the aging report. The team examines the provider’s adjustment approach to determine which claims require adjustment. Additionally, additional claims may be identified when evaluating timely filing limits.
Analysis’ and prioritizing medical A/R follow up.
In this second phase, skilled analysts initiate by identifying various issues with claims, whether they label them as uncollectible or if insurance carriers haven’t paid according to their agreed rates with providers. They also check the appeal/filing deadlines of major carriers and review the “claims submission address” to ensure claims reach the optimal processing unit. Additionally, the team ensures that “clean claims” are reimbursed according to the contracted fee schedule.
Maximizing Medical Accounts Receivable Follow-Up.
After analyzing the team’s findings, we resubmit claims that fall within the insurance carrier’s appeal/refile limit, ensuring accuracy in all necessary billing information, such as claims processing addresses and other medical billing rules. We appeal claims exceeding the carrier’s filing limit or those appearing underpaid with the required supporting documentation. These appeal processes vary significantly depending on the plan, state, and insurance provider, and we initiate and track them for claims under appeal. Whenever possible, we electronically transmit claims directly to insurance carriers; for other carriers, we send claims through clearinghouses and diligently follow up with the insurance provider for confirmation.
Upon completing these steps and posting payment details to outstanding claims, we generate patient bills according to client guidelines and pursue payment from patients.
What are the key roles and responsibilities of Accounts Receivable (A/R) specialists?
Before the doctor can request payment from the insurance company, there is a substantial amount of work to be completed. Ideally, an accounts receivable team consists of two departments.
- Follow up
- Analytics
Their responsibility includes examining and analyzing denied claims and outstanding payments. Additionally, if any claim is identified to have a coding error, the team rectifies the error before resubmitting the claim.
On the other side, the team maintains ongoing communication with patients, insurance companies, and healthcare providers, taking necessary actions based on their responses or feedback.
The team’s skills and the quality of services they provide ultimately play a crucial role in assessing the overall financial well-being of the healthcare practice.
5 Reasons Why A/R Follow-up Is Essential In Medical Billing Processes.
The primary obstacle encountered by most firms in the medical billing process is managing accounts receivable (A/R) follow-up.
Here are several reasons to shed light on some of the commonly known factors.
1. If claim not received.
Failure to file claims is the primary cause of payment delays. In other words, the insurance company fails to receive the claim, often due to paper claims being lost or misplaced before delivery. To prevent such errors, submitting claims electronically whenever possible is advisable.
Delay in following up promptly on claims can result in weeks or longer passing before your firm realizes the insurance company never received it. When dealing with paper claims, wait 10 business days before contacting the insurance company to confirm receipt.
2. Assists in recovering overdue payments.
Accounts receivable (A/R) follow-ups support nursing homes, physicians, hospitals, and others in recovering late payments effortlessly. When healthcare providers have a dedicated team managing claim follow-up procedures consistently, receiving payments on time becomes hassle-free.
3. Secures healthcare provider’s finances.
Every healthcare provider’s financial stability relies on sustaining a robust cash flow. The Accounts Receivable (A/R) department effectively manages maintaining a steady revenue stream for hospitals and physicians to cover expenses and deliver essential patient care services efficiently.
4. Reduces outstanding account time.
The primary goal of each Accounts Receivable (A/R) department is to minimize the duration accounts remain outstanding. The team monitors unpaid accounts, determines necessary actions for payment, and implements required procedures to ensure timely payment.
5. Denied claims can be followed up.
Depending on the reason for denial, you can proactively submit a new claim request with necessary corrections before receiving a paper denial by mail. By reaching out to the insurance company to inquire about the denial reasons instead of waiting for a mailed explanation, the Accounts Receivable (A/R) team ensures prompt correction of all claims. Submitting claims up to 7 days earlier, rather than waiting for mail, significantly reduces turnaround time for payments. The key takeaway is to gain an advantage in processing denied insurance claims and expedite claim resolution.
Conclusion
Effective accounts receivable (A/R) management is crucial for healthcare organizations, ensuring financial stability and efficient operations. A rise in A/R indicates potential issues with upfront payments collection, necessitating systematic follow-up procedures to minimize outstanding accounts. Accounts receivable specialists play key roles in analyzing denied claims, maintaining communication with payers and patients, and ensuring timely payment processing. Their efforts contribute significantly to sustaining a steady revenue stream, covering expenses, and delivering essential patient care services efficiently. In summary, optimizing A/R management is essential for healthcare practices to maintain financial health and provide uninterrupted patient care.
