Accounts Receivable (A/R)

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Accounts receivable or A/R is a term used to denote money owed to your practice for services you have rendered and billed. Any payments due from patients, payers, or other guarantors are considered A/R. A goal of every practice (indeed, every business) is to manage its A/R to ensure that it gets paid correctly in a timely manner. An increase in A/R from one period to another is often a sign that monies such as copays (and increasingly, deductibles for those patients with high-deductible health plans) are not being collected upfront. It portends cash flow troubles if not corrected. One common measurement of A/R is "days in A/R," which is calculated by dividing the total A/R by the average daily charges for the practice. For instance, "40 days …show more content…

In the above example, this practice has done a much better job of collecting money upfront, a goal of every practice. However, they have lapsed in working accounts that were not paid promptly. Numerous studies have proven that the longer an account goes unpaid, the less likely it is that it will ever get paid. You can expect to get only 10 cents of every dollar that remains unpaid after 120 days—no kidding. It behooves every practice to collect at the time of …show more content…

More patients will have high deductible health plans, including many of those offered under the federal and state health insurance exchanges. Though we are doing much better, vigilance remains essential. There are several guidelines that every practice should follow: Recommendations 1. Set a goal of collecting 100 percent of all copays at the time of service. If you ask for a daily report that identifies any outliers and why each copay was not collected, copay collections should remain high. 2. Check insurance eligibility on every patient prior to every visit to: 1) Identify what copay and/or deductible is due; and 2) Ensure the patient's insurance is active. 3. After checking insurance eligibility, use appointment-reminder calls to let patients know in advance how much they are expected to pay at time of service. 4. Eliminate the aging buckets from the bottom of your patient statements. They suggest to patients that payments can be postponed. Replace them with a simple "due now." 5. Find out how often bills are sent out. Billing insurance just once a week, and patients just once a month, slows cash

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