The volume and complexity of healthcare services have been steadily increasing. Every time a patient visits a hospital and receives clinical services from physicians, they incur costs that are owed to healthcare providers. Efficient insurance and billing processes help healthcare institutions recover payments from both patients and insurance companies. This is where Accounts Receivable (AR) follow-up plays a critical role. AR follow-up and medical billing are closely intertwined to ensure timely and effective reimbursements, thereby supporting the financial health of healthcare providers.

What is AR Follow-up?

In medical billing, AR follow-up refers to the systematic process of tracking and resolving outstanding claims and unpaid balances with insurance companies and patients. The AR team is responsible for monitoring denied claims, reopening them when necessary, and working to maximize the recovery of funds from payers.

The AR process generally involves two primary teams: AR Analytics and AR Follow-up.

• The AR Analytics team focuses on analyzing denied claims, partial payments, and any rejections that may be due to coding errors. This team corrects errors and resubmits claims where applicable.
• The AR Follow-up team is responsible for maintaining communication with patients, providers, and payers. They act on the feedback they receive to ensure claims are processed correctly, facilitating timely payments.

Together, these teams ensure the financial sustainability of healthcare providers by addressing claim denials and outstanding balances, thus maintaining the overall financial health of the practice.

Stages of AR Follow-up in Medical Billing

The AR process is systematic and typically consists of the following stages:

1. Initial Evaluation:

The AR team identifies and analyzes outstanding claims on the AR aging report. The team examines the claim details and determines which claims need to be adjusted or appealed.

1. Analysis and Prioritization:

The team then determines if claims are collectible or if the insurance carrier has failed to pay according to the negotiated rates. This stage is crucial for prioritizing the most critical accounts.

1. Collection:

Claims determined to be within the carrier’s filing limit are refiled after all pertinent medical billing information, such as the claim processing address, is verified. Payment details are then posted, patient bills are generated, and the AR team follows up with patients for any outstanding amounts.

While these stages may vary between organizations or overlap, it is essential to complete each one to recover outstanding payments, whether in full or in part.

Consequences of Poor AR Follow-up in Medical Billing

Ineffective or delayed AR follow-up can lead to significant disruptions in the cash flow necessary for daily operations. The delay in payments negatively impacts financial stability, restricting the ability to invest in critical areas of healthcare services. Moreover, inadequate AR management can lead to increased administrative burdens as providers become entangled in complex claims processes, denials, and resubmissions. This inefficiency detracts from the time that could otherwise be dedicated to patient care.

Additionally, poor AR follow-up can have a ripple effect across the entire revenue cycle. Timely claim submissions and reimbursements are integral to keeping healthcare practices financially healthy and operationally efficient.

5 Reasons Why AR Follow-Up is Important in Medical Billing

The importance of AR follow-up cannot be overstated. Here are five key reasons why it is crucial for healthcare practices:

1. Financial Stability:

AR follow-up directly affects the financial stability of healthcare providers. Efficient follow-up ensures that revenue from services rendered is collected in a timely manner, allowing practices to meet operational costs and avoid disruptions.

1. Reduction of AR Days:

A key performance metric in medical billing is the number of AR days or the average time it takes to collect payments after services have been provided. The industry benchmark is to maintain AR days under 40. Regular AR follow-up helps reduce AR days, speeding up cash flow and improving the financial health of the practice.

1. Recovery of Overdue Payments:

AR follow-up is essential for identifying and recovering overdue payments. The AR team monitors unpaid claims and patient bills, taking proactive steps to resolve issues, resubmit claims, or engage with patients, ensuring that revenue does not slip through the cracks.

1. Improving Denial Management:

Denials can arise due to coding errors, missing information, or eligibility issues. AR follow-up allows for the early identification of denied claims, enabling the team to correct and resubmit them, thus reducing revenue loss.

1. Enhancing Patient Engagement:

Engaging patients about their outstanding balances and offering clear communication and flexible payment options is key to minimizing bad debt. Effective AR follow-up enhances patient engagement, improving payment rates and overall patient satisfaction.

How Can RCM Workshop Help You?

Effective AR follow-up can be challenging, but it doesn’t have to be. RCM Workshop assists healthcare providers in developing and implementing efficient billing strategies to recover lost revenue and track unpaid claims. Our AR recovery process is simple, scalable, and designed to alleviate the administrative burden, giving providers more time to focus on patient care.

We ensure that your billing processes are aligned with the latest medical terminologies and regulatory requirements. If you need help identifying and addressing cash flow issues, RCM Workshop is here to take on the challenge, allowing you to concentrate on delivering quality healthcare.

Conclusion

In today’s evolving healthcare industry, where financial pressures are ever-present, AR follow-up is a vital aspect of revenue cycle management. By ensuring timely reimbursements, AR follow-up helps healthcare providers maintain financial stability and continue offering high-quality care. Please reach out to RCM Workshop today to take your AR Management to a different level altogether.