Submitted by Antonio Arias, MBA, CHBME on Tue, 11/3/2015 - 8:00

3 Best Practices for Better A/R Management

Best Practices for Better A/R Management

With ICD-10 finally upon us, it’s time to face the consequences. Some predict the impact will hit claim's denial rates the hardest, with jumps as high as 50-100% estimated in the early days of the transition.

As such, there’s no better time to get your Accounts Receivable in order. Capture more of what you earn by making sure to follow these two best practices.

Tracking Receivables by Day

With every payer in your network working on its own unique schedule, it’s vital to think outside the traditional 30-60-90 day receivables box. Why? Because the sooner you follow up on a denied or unpaid claim, the better your overall odds of receiving payment.

Start by closely monitoring your revenue cycle management and seeing exactly how quickly your payers typically pay on your claims. (That means by day, not by month. There’s a big difference between a payer who reimburses on day 31 than one who reimburses on day 59.) Once you have enough data to recognize each payer’s patterns, you’ll know when the appropriate time is to contact a payer to make sure you receive payment. Follow through! If the payer usually pays by day 35, call them on day 36 and so on.

Optimize Your Contracts

To achieve better A/R management, it’s crucial that your agreements with insurers are in line with fair market rates and billing requirements.

Assess the per-encounter payment rates on each of your contracts and make sure there’s only small variability in how you’re reimbursed by all of them, especially for your most frequent kinds of encounters. The Medical Group Management Association estimates that, on average, payers underpay practices by 7-11 percent. Most contrtacts with payers are written on a annual basis, so if you spot issues, it’s imperative that you negotiate with the payers who aren’t pulling their weight as soon as possible.

Are you interested in learning more medical billing tips? Visit our blog! 

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Topics: Medical Billing, Revenue Cycle Management, Practice Management

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