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Why Optimizing Accounts Receivable matters before the end of the year?

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Why Optimizing Accounts Receivable matters before the end of the year?

An Account Receivable (AR) in healthcare is the amount owed by a patient and/or his insurance (payor) to the provider for the treatment delivered. Its handling holds a crucial place in revenue cycle management as smooth cash flow is essential for any business to sustain itself and grow.

Medical organizations like hospitals, clinics and private practices rely on timely and accurate payments of AR to ensure efficient operations. This requires insurance verification, accurate filing of claims without delay, following up with payors, collecting maximum AR, preventing underpayments or delays and many more steps with expert attention.

A high AR indicates issues with the medical billing system adopted by you. It points out the need to identify the red flags, fix the loopholes and employ cutting edge solutions to ensure your hard-earned revenue is collected.

We call this the optimization of accounts receivables.

Here’s why you should optimize AR before the year ends!

  1. Cash Reserves
    As we discussed earlier, high AR is a nightmare for a medical or dental practice. Falling cash reserves especially in an uncertain economy and healthcare crisis means that sufficient working capital cannot be ensured.
    You want to end a year with a good working capital and profits in order to enter the new year without any hurdles. Consult a medical billing company for taking up the task of optimizing your AR if you have too much on your plate.

  2. Tax Return
    Pending and delayed accounts receivables further complicate the process of filing tax returns. A little advance work on accounting records before the year ends will assist better tax return filing and itemizing your deductions.

  3. Revenue
    When AR delays go unnoticed, they can pose serious challenges to a practice’s financial health. Today there are expert medical and dental billing companies that are devoted to ensuring that maximum revenue is generated by you.
    Optimizing the accounts receivables before the year end, helps to balance those complicated account books and prevents loss of revenue.

  4. Report & Analysis
    If all pending accounts receivables are collected before the year ends and the cycle is well optimized, the year-end reports give a clear picture of your revenue cycle.
    Reports like AR aging reports, key performance indicators report, top insurance analysis report can be run with more accuracy and help you evaluate the practice’s performance based on the negative and positive trends.
    The insights provide an opportunity to improve your revenue cycle management.

Strategies to Optimize Accounts Receivables in Healthcare