Maintaining a healthy financial situation necessitates an efficient income cycle. The healthcare revenue cycle is critical to healthcare providers’ ability to pay physicians, cover costs, and invest in new technologies. When the healthcare revenue cycle is poorly managed, collection efficiency suffers and hospital accounts receivable (AR) days rise. The revenue cycle management involves numerous duties, ranging from gathering insurance and procedural data to generating claims and billing patients. When any of these processes is sluggish or unproductive, the healthcare revenue cycle is dragged out unnecessarily. A competent hospital accounts receivable administration can turn a negative cash flow into a positive cash flow in medical practice. Necessitates an Efficient Income Cycle So, to keep the hospital accounts receivable process running smoothly, use the strategies outlined in this blog.
Is your healthcare organization experiencing inadequate cash flow and poor account receivable management?
This is not a unique difficulty; the hospital account receivable problem has plagued healthcare accounting, impeding hospitals’ objectives and aims. To maintain consistency, below are some of the most typical hospital accounts receivable issues and their solutions:
Insurance Claim Denials
One of the most typical hospital accounts receivable issues is denied insurance claims. According to a survey done by the United States Government Accountability Office (GAO) in March 2011, healthcare organizations can lose up to 10% of potential income if their denial management procedure is poor. According to the Medical Group Management Association (MGMA), every healthcare organization should have a denial rate of 4%.
Your hospital accounts receivable management team must carefully analyze each and every claim form. Primarily prior to submission in order to meet the requirements and maintain track of refused claims.
Typically, the hospital accounts receivable management team does not keep smaller payments. This eventually has an impact on the hospitals’ balance sheets. As some patients are willing to pay in installments or may collaborate with you to lower their medical debt.
Before writing off anything, the team must authorize and review everything. Whether the amount is higher or less, everything must be recorded in the books of accounts. In this manner, you may assure that your company does not face excessive revenue losses.
Rising outstanding debt has become one of the most key barriers in hospital accounts receivable management. Previously, the patient’s responsibility was limited to the duration of service, but this is no longer sufficient. It is vital to receive debts from the patient throughout the revenue cycle.
While offering quality service, your healthcare provider must collect all relevant billing and insurance information and calculate the probable out-of-pocket cost. So, by verifying coverage and insurance bills, the patient understands and agrees to their responsibilities.
Collecting payments is not a favorite task of healthcare workers, whose primary responsibility is to deliver great treatment to their patients. However, receiving payment for services performed is critical to maintaining a profitable practice and continuing to offer care.
In order to prioritize your hospital accounts receivable, your healthcare organization must establish a culture of payment collection. You must equip your staff with the appropriate payment collection technology so that your patient is not dissatisfied with the service.
Inadequate Hospital AR Management
Improper hospital account receivable administration in a medical office can lead to a loss, including bad debts and a negative patient experience. Furthermore, you can examine rising bad debts in your books of accounts.
You must carefully reconcile your bank statements to ensure that all transactions are correct and that no entries have been missed. This will assist you in preventing fraud and errors, allowing you to focus on your patients and cure them more efficiently.
Every member of your company, from doctors to administrative personnel, should be enthusiastic about their work and grasp your organization’s mission and goals. If your staff is not working properly or is not taking your goals seriously, you will notice a negative impact on your healthcare company.
The best solution is to outsource hospital accounts receivable services to a reputable organization that is an industry expert and will diligently work on your needs. Hiring an in-house administrative staff is difficult and expensive. But outsourcing your hospital accounts receivable gives you access to innovative technologies and dependable services.
What are the key takeaways?
The healthcare system is vast, and coordinating multiple duties is difficult. As hospitals deal with an ever-changing financial climate, one of the most important components of running a healthcare business is the billing and collections operation. A falling hospital account receivable turnover rate and a poor AR aging schedule are wreaking havoc on cash-strapped health systems. Whatever path you choose during a revenue cycle turnaround effort, keep in mind that careful planning and providing the right resources to create optimal performance are the keys to any successful hospital account receivable turnaround endeavor.