Key Parameters To Reduce Accounts Receivable (AR) For Your Practice

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Key Parameters To Reduce Accounts Receivable (AR)
For Your Practice
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Key Parameters To Reduce Accounts Receivable (AR)
For Your Practice
Accounts receivable (AR) is an important
parameter for any practices revenue cycle
management. More number of AR days indicate
inefficiencies in your overall revenue cycle
activities. Things can quickly go out of hand and
providers require to write off significant amount
as bed debt if not planned accordingly. In this
article, we shared key parameters that will help
you to reduce accounts receivable for your
practice. If you dont have a strategy to reduce
accounts receivable days and amount, these
parameters are good starting points. Key
Parameters to Reduce AR Net Days in AR Net days
in AR is the most important parameter to
determine the financial health of your practice,
as it indicates an effective collections process.
Net days in AR indicates the average number of
days it takes to collect the payments due for
services delivered. Ideally, the net days in AR
must be in between 35 and 40 days. Discharged
Not Final Billed (DNFB) Discharged not final
billed (DNFB) is a valuable parameter that not
only indicates revenue cycle performance, but it
also helps identify issues in the receivable
process. Ineffective management of DNFB can lead
to mounting AR days, frustrated employees, and
disrupted cash flow. Common reasons for DNFB more
than 5 days could be, coding and billing
inefficiencies staffing shortages and
incomplete patient/insurance data. Most
healthcare providers aim to keep DNFB low
between 3 and 5 days is ideal. If your DNFB is
consistently above 5 days, it is an immediate red
flag that is indicative of a systemic issue.
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Key Parameters To Reduce Accounts Receivable (AR)
For Your Practice
Aged AR Longer claims remain in AR lesser chances
of them to be paid. As a general practice, most
practices monitor AR in 30-day increments. Any
claim under 90 days in AR, has more chance to
receive reimbursement as comparted to claim above
90 days in AR. You must classify aged AR in
percentages, to make sure that your overall 90
day AR should not make more than 25 percent of
total AR. More percentage of 30 days AR and 60
days AR indicates, billing activities with steady
collection. Number of Touches Per Claim Your RCM
team includes experts from billing, coding,
denial and AR fields. Every team member works on
pending claim to provide suitable resolution.
Getting claims paid quickly depends on your
billing teams ability to coordinate and follow
up on pending claims. Number of touches per claim
suggest your teams ability to work seamlessly
with less rework, more touches doesnt mean the
work has been effective. To determine if your
revenue cycle processes are efficient, monitor
the number of touches on successfully adjudicated
claims. Pending Patient Responsibilities With
more patient are opting for high deductible
plans, continuous monitoring of patient
responsibility becomes crucial for healthy RCM.
If you know exact patient responsibility before
patient visit, then only you will be able to
collect them. Once the patient leaves the office,
possibility of receiving patient collections
decreases week by week. Plus, your team has to do
continuous follow up to collect them.
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Key Parameters To Reduce Accounts Receivable (AR)
For Your Practice
You must have insurance coverage report before
every patient visit, your front desk staff must
be well trained to understand coverage and
benefits report, you should offer various
payments options so that patient can make
payments easily while they are in office. We
used Kemberton Financial Health Check Report as
a reference to discuss a key parameter to reduce
AR for your practice. Medisys Data Solutions is a
leading medical billing company providing billing
and coding services for various medical billing
specialities. We can assist you in reducing your
AR days and increasing your monthly insurance and
patient collections. To know more about our AR in
medical billing services, contact us at
info_at_medisysdata.com/ 302-261-9187
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