Medical billing software can be one of the most important tools a physician has to stay on top of claims, reimbursements, and the financial health and wellness of his or her practice. Managing your accounts receivables is one of the best ways to keep your finger on the pulse of your practice. Regularly reviewing your accounts receivables is only part of the larger picture that involves revenue cycle management (RCM).
How important is your accounts receivables?
Your accounts receivable report is one of the most valuable that you can print out for a number of reasons. This report enables physicians to assess a quick overview of the number of claims submitted, how many have been paid, or how many have been denied. Quality medical billing software can also tell you why.
The number of claims still pending in your accounts receivable denotes the number of claims waiting to be paid. Your accounts receivable can be categorized depending on the length that you've waited for reimbursement or payment of services rendered:
- 0 to 30 days
- 31 days to 60 days
- 61 days to 90 days
- 90 to 120 days
- 120 days or over
The ideal time frame for reimbursements for payments to be made is within 45 days. A number of signs that you need to take a closer look at your accounts receivables are listed.
Sign #1: If you're reimbursements are not being paid in a timely manner (45 days or less on average), it's time to find out why. Of course, some claims take longer to process. For example, claims involving an accident, claims involving military personnel, or workers comp claims often take longer. It's no secret that an alarming number of medical claims are paid late, but taking steps to reduce delays such as ensuring accuracy, correct billing codes, and correct patient information and insurance identification number may speed up the process.
Sign #2: Your in-house billing manager is not fully trained and experienced in billing processes. Lack of experience, know-how, and proper procedures in regard to claims submissions to various insurance carriers can delay payments. Claims can end up sitting in accounts receivable for over 120 days, which is completely unacceptable. Most payers have specific guidelines and time periods for submission of claims. If these guidelines are not followed, you can end up with dwindling revenues. Automated system can alert to such situations.
Sign #3: Your claims are being denied due to incorrect information. Nearly 50% of claims denials are caused by incorrect information: incorrect CPT codes, incorrect insurance identification numbers, incorrect information regarding contact information (patient’s home and/or business), transposition of Social Security numbers, and so forth. Missing or erroneous information can result in a claim that is invalidated. Timely review of such claims is essential for reimbursement.
Sign #4: If your top carriers consistently drag their feet when it comes to payments, find out why. Don't be hesitant to call the carrier or do some research on your own regarding their average length of payment times.
Sign #5: Another clue that you need to pay more attention to your accounts receivable is if you're getting back responses from carriers that claims are not being processed in the amount of time specified by their guidelines. If your medical billing system is outdated or your human billing manager is not on top of submissions guidelines, you may be also dealing with compliance issues.
Sign #6: If an alarming number of your claims are not paid within 90 days, the value of revenue received may not be equal to the value of services you provide.
Sign #7: When claims are chronically delayed it may be an indication that your insurance carrier has adapted claims processes. Your billing system should be able to run a carrier and analysis report that can provide you with information regarding your top insurance carriers or payers. If you haven't looked at the fine print, or your billing manager is not keeping you abreast of these extended terms, you may not realize why payments are being delayed.
Sign #8: You're not in regular communication with the outsourced billing company you've hired to take care of your claims. You may think that outsourcing to a billing company is the ideal solution for your revenue cycle management needs, but it's important to maintain regular communication with them in regard to how many claims are processed and the average number of claims denied. Medical billing companies charge based on the number of claims they process. If you have a small practice, they may not be prioritizing your claims.
Sign #9: If your billing manager or other staff spending more time on the phone with insurance carriers to correct erroneous information or to determine why claims are falling through the cracks, it may be time to invest in integrated EHR/practice management and medical billing software that can set up alerts and reminders in regard to claims submission, receipt, follow-ups, or denied claims.
Sign #10: You find that you don't have adequate time to take care of back office responsibilities and tasks. The importance of accounts receivable management is not to be underestimated. In regard to the health of your practice, it’s as important as taking care of your patients.
Invest in your accounts receivable
You want to be paid for the services you provide. You don't want to deal with:
- Lost or ignored claims
- Underpayment
- Denials for any number of reasons
- Noncompliance when submitting claims
According to the Centers for Medicare and Medicaid services, nearly 60% of denied claims are never resubmitted! Nearly 20% are denied for one reason or another, and another 10% are simply lost in the shuffle or completely ignored.
High-quality medical billing system that incorporates rules engines can cut down on denials. Invest the time necessary in your accounts receivables to ensure that you're getting paid. If you don't, your practice may lose out on tens of thousands of dollars a year.