Billings and accounts receivable are the lifeblood of most companies. In the healthcare industry, the complexity and importance of effective billing operations is even more critical than in most other industries. Insurance companies and other payers have a confusing and complex process for claim submissions that makes it harder and harder for physicians and other service providers to get paid for the work they perform. Patients hold off on paying until the insurance company reimbursement is received and documentation confirming the patient’s share of the billing is received, thereby delaying collection efforts. Furthermore, the new regulatory challenges from The Affordable Care Act and the Patient Protection Act, make it even more important for providers to collect the money they are owed.
Some figures that will alarm most doctors include only 70% of claims are paid the first time they are submitted. The remaining 20% are denied and 10% are ignored. Of the 30% not paid, 60% are never resubmitted to payers. With other factors contributing to collection efforts, statistics show that over $125 billion dollars are left on the table annually by American medical practices.
The key to increasing your receivables success is to establish performance metrics for your accounting team. You can only manage what you measure so knowing the success rate of collections efforts is the first step. Simplifying and automating the revenue cycle is a major step to reclaim unpaid funds. Electronic health records, online patient portals and practice management systems provide better opportunities for providers to cut costs and improve results.
There are several key best practices that should be employed to improve medical accounts receivable management and most start with automation. Strong software tools can identify denied claims before submitted, manager payer contracts, report on daily aging of receivables, create claim process workflows, business and analytics tools, electronic remittances and advanced tracking of denials, underpayments or unpaid claims.