Four Accounts Receivable Management Pitfalls

The increasingly lost revenue has forced healthcare professionals and medical billing services to check their accounts receivable (AR).  Checking accounts receivable is certainly not easy. It’s complex as it is based on estimations, assumptions, and trust.  If not paid attention to details, medical practices can be stuck within fraudulent circumstances and loose revenue.

Furthermore, accounts receivable management shifts from one phase to another due to regulatory authorities, changing payment models, out-of-pocket expenses, and an increasing number of uninsured people being included in the payment models via the Affordable Care Act (ACA).

To add more fuel to the fire, payment collection varies from different patients to plans to times. Even if medical billing auditors look into AR methodologies, there is never a concrete result because of adverse inputs/impacts and conclusions.

What Should Medical Billing Services Do to Avoid AR Mismanagement?

First things first. You have to start reviewing and analyzing the account receivable management framework from top to bottom. Checking into history is also important to know the actual reasons for the liabilities.

Interview every stakeholder of the organization from finance officers to revenue cycle heads and take their input on how things work.

Given are the four primary areas that might risk your revenue cycle.

Poor Documentation/ Inaccurate Reserving Methodologies

A major problem with the majority of financial ledgers is the inaccurate or insufficient reserves to run a medical practice. At the time of planning strategies, we often caught up in some trendy or mostly-used strategies. However, they don’t add up in the process and are inaccurate in estimating the actual revenue needed.

You need to consider the following factors to avoid the risk.

• Is your staff trained to do accurate data entry?
• Are the policies, terms, and conditions based on data-driven decisions?
• Is the AR factor proportional to the liabilities?
• Do you have proper follow-ups?
• Do the teams collaborate?

These are just some of the questions that need answers while reviewing the accounts. You should consult professional medical billing auditors to get answers to questions that are more detailed.

Improper/Lousy Processes

While risk analysis, you might come up with inadequate processes. For instance, you might know that a certain process is handled via a certain method, but it is catered via different or unofficial methods. It can lead to many things being ignored or pass through cracks without being noticed.

A problem in one area can lead to problems in many other areas. Thus, you need to ask yourself the following questions, and if not have a proper answer to any of these, you should revisit your policies.

• Do you review AR methods at regular intervals?
• Are the policies and documents consistent?
• Are critical financial tasks documented accurately?
• Does every stakeholder know about the policies and procedures?

Payment Monitoring Environment

Another issue with accounts receivable is the lack of training or education regarding the changing reimbursement policies. Payment adjustment cannot be made correctly if your medical billing services’ staff doesn’t know about the modified policies.

Moreover, your company should take care of commercial and governmental payer changes, deductibles ratio, and more.

Lack of Qualified Resources

If you face difficulties in receiving pending payments or there are lots of issues in the payment process, you might lack qualified resources. It is possible that your staff is not qualified or experienced to handle the complex structure of AR.

You need to consider:

• Are your resources trained enough to handle challenges?
• Is human resource management capable enough of measuring the required skill set?
• Does the staff know about performance key indicators (KPIs) and the expertise to identify errors?

The risk of not reviewing and judging the capabilities of the accounts receivable management is excessively high. Staff, reviewers, auditors, and management must double-check each aspect of the system, so physicians do not have to face inconsistency in generating revenue.