Importance of Reducing Days In Hospital Accounts Receivable?

Hospital Accounts Receivable

According to the American Hospital Association, our country’s hospitals and healthcare systems will lose $202.6 billion in income in 2020, an average of $50.7 billion per month. Furthermore, around 72% of practitioners reported a drop in revenue as a result of the pandemic. As practices seek methods to enhance their financial health, one of the easiest ways to make a difference is to ensure that the organization is paid for the services, it provides, on time. By paying careful attention to days in Hospital Accounts Receivable and taking the necessary actions to enhance that indicator, practices may boost their bottom line in 2021 while also laying the groundwork for a healthier organization in the long run.

Why Are Days in HOSPITAL ACCOUNTS RECEIVABLE Important in Healthcare Billing?

In a nutshell, days in Hospital Accounts Receivable refer to the amount of time an invoice remains unpaid before it is collected. It’s a critical indicator to monitor because if a clinic doesn’t collect payments, it reduces its margins and may end up gaining more patients’ Hospital Accounts Receivable.

To compute days in Hospital Accounts Receivable, first determine the average daily charges for the time period you want to track. To do so, sum the stated charges for the time period you’ve chosen, subtract the credits earned, and divide by the number of days in that period. Then, divide your total accounts receivable by your daily average charges.

To create expectations, practices should aim for 30 to 40 days in Hospital Accounts Receivable, depending on their specialty. If you spend more than this many days in Hospital Accounts Receivable, your practice’s finances may suffer. However, keep in mind that if you have a high volume of workers’ compensation or automotive claims, you may face higher days in Hospital Accounts Receivable due to a lengthier adjudication process for these types of claims. According to the United States Department of Commerce, the possibility of businesses collecting on overdue accounts decreases by 12% per day after 90 days.

Improving Hospital Accounts Receivable days necessitates practice-wide focus, both before and during appointments, as well as after service is rendered. Here are three suggestions to help you build a solid financial basis for your practice:

Tip1: Gather all necessary information and approvals before scheduling appointments

When a patient makes an appointment, whether, by phone or online, you should obtain current and full information. Front-desk personnel should update or validate details such as insurance, demographic, and contact information, or offer clients the option of returning forms via mail, secure email, or online portal. Clients should be obligated to issue the data or modify their records before the appointment is verified if utilizing an online portal or appointment booking service.

With this knowledge, office employees can confirm insurance coverage with payers and clarify payer rules. They will be informed of any changes in the patient collection, as well as how much of the projected therapy will be protected and how much the client will be liable for paying. Furthermore, when the patient comes for the appointment, the staff can determine if there are any outstanding amounts that need to be addressed.

Tip2: Create a clear payment policy

The simplest way to ensure your clinic is paid for its services is to create a policy requiring patients to pay copays and/or their obligation at check-in.

  • Payment expectations
  • Fee implications
  • Refund policy for overpayments
  • Interest/service charges
  • Discount policies
  • Old balance collection
  • Collection costs

All should be highlighted in this policy. The payment policy should be included in the check-in documentation for patients to sign, establishing clear parameters for collection from the start. You can also utilize your patient messaging system to send appointment reminders with details about what is due at the time.

Embracing a different payment method for extra patient comfort, such as:

  • Pay by mail
  • Pay by phone
  • Recurring payment plans
  • Card on file
  • Online payment
  • Funding

As part of the accounting policy, can increase the likelihood of collecting balances.

Tip3: Following appointments follow up with patients

Following the appointment, office staff should quickly mail follow-up statements and specify payment due dates. The statements should include instructions on how to pay, such as whom checks should be made payable to or an area to enter credit card information. Contact information to call if you have billing questions should be displayed prominently on the report.

While it may be difficult and daunting for some patients with larger sums to pay off their bills all at once, consider implementing a payment plan that allows these patients more flexibility. Not only will this give them peace of mind in knowing they can afford the treatments they require, but it will also help the practice increase:

  • Collections
  • Reduce write-offs
  • Improve the patient-practice connection

As patient sentiment can improve when they feel a practice has demonstrated understanding regarding their unique situation and ability to pay.

Hence to conclude, keeping days in Hospital Accounts Receivable less than 30 to 40 days is critical to the financial sustainability of your practice. You have a greater chance of improving this timeframe and thus overall increasing collections if you design a clear workflow for your practice’s employees that follows these three suggestions and makes expectations apparent to patients.