Revenue Cycle Management: Days In A/R (Part 5)

Revenue cycle management is becoming increasingly important as practices find their income numbers dropping after the switch to ICD-10. The drop could also be explained by changes in different insurance policies. Whatever the reason, physicians everywhere are working hard to make sure claims are sent correctly, and payments are being received.

For the fifth part in our revenue cycle management series, we will be talking about how monitoring your days in accounts receivable can improve your practice, and why it might be important that you outsource medical billing.

(For more information check out the rest of our Revenue Cycle Management Series.)

Simplicity

Studying the number of days in accounts receivable is likely the simplest global look at accounts receivable that there is.

In the most basic terms, days in accounts receivable represents the average amount of time it takes a practice to collect reimbursement for the services they provide.

By monitoring the days a claim is in accounts receivable, you create a reference point for all future billing cycles. With one single A/R report, you can determine if something has gone wrong in your billing. The report can also point you in the right direction to then repair the damage. A/R monitoring is easy and effective, and that is why practices should utilize it.

Accountability

Another great reason to monitor days in accounts receivable is accountability. Accounts receivable reports can highlight major problems occurring by your billing team.

It is not unlikely that lost revenue has come from simple administrative errors. A frequent reason credit balances for a practice increases is because the office staff fails to link a patient’s copay to a specific charge.

Additionally, it can be difficult for staff to monitor late payments on accounts receivable as the build up over time. This is problematic because the longer a payment goes unpaid, the more likely it is that it will never get paid.

Implementing a system that frequently checks the work of your office staff holds them all to be accountable.

This is the best way to look at the performance and effectiveness of your billing staff or company and gives you a way to look at your monthly changes.

Outsource Medical Billing

As you can see, monitoring days in accounts receivable is crucial for solid revenue cycle management. It is a simple tool that allows you to better manage your income and faculty. But what happens if you find out an excessive number of mistakes are being made? Do you take the time to re-educate your staff, or do you choose to outsource?

When you outsource medical billing, you are handing over your revenue cycle management to individuals with extensive training. If you have a cavity, you go to the dentist. Similarly, if you have trouble with your medical revenue cycle, you outsource medical billing.

Interested in learning more? Check out this overview of MEREM Health’s medical billing services.