Common Issues in AR Management and How to Overcome them
Accounts Receivable policies are a mandatory requirement for smooth sailing of the financial matters at all healthcare practices. They play a key role in AR management and help reduce underpayments and overdue bills. The policies are mainly surrounding issues such as when and how to bill, and the amount of the bills. However, it has been found that nearly 24 percent of bills, at all businesses, are overdue despite these businesses having solid accounts receivable policies.
AR management is the responsibility of business and finance teams at your practice as they deal with policy-making and bill collection matters. It is important for your practice to not only have proper policies in place but also to have a system for the implementation and improvement of these policies as you go forward.
Failing to have and implement these policies for AR management at your practice is the easiest way to hurt your revenue and profit system. The clear lack of cash flow can be detrimental not only to the success of your service, but it can also take away from your staff’s day as they follow up on collections and billings singlehandedly. This is just too much stress for your staff members and you.
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Consequences of poor AR management
There are several consequences of poor AR management, with the most obvious being reduced cash flow. Some of the other issues poor AR management can cause at your practice are:
- Bad debt being confused with overdue accounts
- Overdue accounts being ignored
- Clerical errors on bills due to lack of time
- Improper allocation of bills and payments
All of this is going to hurt your practice’s revenue system significantly. This is why you need to perform detailed introspection and determine the cause of poor AR management at your practice so that you can move on to resolving those issues.
Common issues with AR management
Some of the common issues with AR management are mentioned below. It is worth noting that although these may or may not be the issues at your practice, it is most likely a variation of these.
It is important to know how much money at your practice is yet to be paid, which bills are ready for submission and which ones are already paid. Improper ledger management means some bills are going to slip through the cracks, costing your practice deeply.
Lack of knowledge and training for AR management
Your staff is responsible for dealing with billing and AR management which includes tasks such as insurance verification and submitting the bills. The whole process involves several small tasks that need to be performed in a specific manner to avoid complications with data organization, patient management, and time management at your practice. Failing to train your staff members and educate them on the specifics of the processes can be quite detrimental to AR billing.
AR calling documentation and ethics issues
One of the ways that you can manage AR days at your service is AR calling which includes calling payers for updates regarding the status of claims that have been submitted. It is key to document the notes from a call thoroughly and clearly, to avoid any misunderstandings when these notes are referred to in the future. Similarly, there is an ethical issue with the calls made, especially to patients. It is important to appear compassionate and kind during these calls.
No proper patient management
It is important for your practice to have a clear line of communication with your patients to ensure that they are ready to pay for services rendered that aren’t covered by the payer. It is also necessary to check insurance benefits and patient eligibility prior to the appointment to prevent issues like these.
Lack of dedicated time
This issue arises from traditional methods of AR management. These involve your administrative staff sending out bills and following up with the patients, while also having to receive patients in the clinic. This adds to the stress your staff is under which only increases the risk of errors.
How to solve the common issues in AR management
Now that we have discussed the issues that commonly arise at private practices, let’s try to find solutions to these problems.
Issue Number 1: Disorganized data
It is important to organize data in a way that is easy to follow and update. Your staff should update these spreadsheets and so on when they file a claim, along with its status. If AR calling has been employed for a specific claim, that should be included in the spreadsheet too.
Issue Number 2: Lack of knowledge and training for AR management
The issue is lack of training which makes the solution of the problem that much easier to figure out. Providing training programs and educational sessions for your staff members to attend can make the process of filing and AR calling much easier.
Issue Number 3: AR calling documentation and ethics issues
The first step is to record calls to prevent any gaps in documentation. This allows you to crosscheck information any time you want and to refer to the call, in case an ethical complaint is made against a specific caller. It is also important to have direct protocols and guidelines for calls, that all callers need to follow to maintain professionalism and get the best results.
Issue Number 4: No proper patient management
Patient and payer information should be updated regularly in your systems to ensure proper insurance eligibility information. It is recommended to outsource to an EHR/PMS service for better management of patient data along with billing data.
Issue Number 5: Lack of dedicated time
Outsourcing your AR management process to professionals gives your staff time to perform other tasks which will allow your practice to become more patient-centric. Moreover, outsourcing the process along with the billing process means your staff is less stressed and exhausted which will be reflected in the happier way they deal with patients in the office.