Maintaining a strict accounts receivable bucket is the most decisive function to maintain a steady cash flow. A well-organized and efficient revenue cycle management (RCM) process is necessary to sustain proper cash flow within an organization. Whether it is a multispecialty hospital, a clinic or a medical equipment selling business – the same rule applies. To stop the episodic flow of revenue, it is imperative to reduce accounts receivable bucket to a comfortable yet practical date range.
90 days is the widely accepted standard in this respect. In many ways, it’s the yardstick by which the success of your revenue cycle management may be measured. You stay within this side of the 90 mark, and you are safe. You’re A/R crosses over to the other side, there’s trouble!
Delays in the RCM process are due to various errors that result from carelessness, ignorance or a simple lack of understanding of what is required to get a claim accepted and reimbursed. To run a smooth healthcare system, a clean claims processing process is an absolute must.
The 5 most important things to bear in mind if you are serious about getting paid within the 90-day bucket include:
- Conducting a thorough eligibility verification and authorization check
- Ensuring a proper and clean claim submission from start to finish
- Maintaining a high level of accuracy, especially while coding and filling patient details
- Doing periodic follow-ups till successful closure
- UPDATE FOR 2016: Process automation is one of the important cornerstones of improving on aging accounts receivable. Several RCM companies have started to provide cutting-edge technology platforms that give an instant understanding of the reason a claim has been denied by a Payor. It also helps in a significant reduction of TAT (turnaround time) by doing away with the need to make time-consuming phone calls or manual enquiries regarding the claim status. And since such automation grants direct access to the Payor’s records, the scope for errors also diminishes manifold.
Did you know that by reducing the payment cycle by just five days, you can improve the cash flow rate drastically over time?
Having said that, it is not always easy to achieve the above, especially if one is stuck with an inefficient or poorly skilled in-house billing team. This is why more and more companies are outsourcing their accounts receivable management tasks to professional outfits.
The benefits are readily available. Lower costs, bigger savings, improved cash flow and a drastic reduction in A/R days are just some of them. After all, who doesn’t want a higher cash flow and an increase in the collection rate with fewer denials?