As you are probably well aware, a healthy revenue cycle is essential for maintaining the financial well being of your healthcare facility as well ensuring that physicians in your organization are compensated properly. One way to improve your revenue cycle is to reduce AR days, but there are a few other things that affect how financially healthy your organization is.
There are several factors that go into maintaining a revenue cycle including:
- Patient registration and eligibility checks
- Up-front payment collection (copayments and deductibles)
- Claims management
- Medical billing and receiving patient payment
If any of these moving parts get out of line, the revenue cycle can be easily disrupted, causing an increase of AR days and a hit to your organization’s financial health. Below we talk about why you should focus on reducing your AR days and a few key steps to help you keep your financial wellbeing in check.
Improving Your Revenue Cycle: Why You Should Focus on Reducing AR Days
If your AR days are increasing, that means that your facility is in danger of quickly slipping into large amounts of debt. Reducing AR days is necessary in an ever-changing financial environment to take control of your medical facilities’ cash-flow.
All too often, cash-starved health systems are victims of declining AR turnover rates and high levels of debt. While turning around your average number of AR days isn’t a simple task, with some determination and organization, it can be done. Below are a few key steps to help you and your medical organization reduce your AR days and regain your cash-flow and your financial health.
Key Steps to Reducing Your AR Days and Improving Your Revenue Cycle
1. Determine Your Goals
One of the first steps in reducing your AR days is to determine your goals. What does an ideal number of AR days look like for your facility? This number will differ depending on several factors including the type of facility and the mix of payers you have.
Setting a specific, yet realistic goal for reducing your AR days will help make the process easier. It often helps to write out your goals and have a brainstorming session with your team. Post these goals somewhere so everyone, including yourself and your billing staff, can see them and have motivation to achieve what you’re working towards.
2. Accurate Documentation is Key
The next step to reducing your AR days is making sure that your facility and staff are keeping timely and accurate documentation of all your coding and billing cases. By having organized and up to date documentation to look back at, you can more easily find any inefficiencies in your revenue cycle that can be corrected. This step may take some time and effort, but it is a vital and important part of the process of reducing your AR days.
3. Set “Clean Claim” Goals
Making sure that your billing department understands that you have a set expectation for receiving clean claims within 48 hours of receipt of required documentation can help you reduce your AR days drastically.
Many coders and billers aren’t willing to give you clean claims unless you set clear expectations and ask for them. It’s also a good idea to make these same types of goals for follow-up on electronic rejections on uploaded claims. The clearer and more direct you are with these goals and your communication of them, the easier it will be to reduce your AR days.
4. Have Processes in Place for Tracking Denials
Denials are another part of the healthcare revenue system that can get miscommunicated, delayed, and cause more AR days.
By ensuring that you have processes in place for tracking denials can help your personnel understand how your facility handles denials to minimize time to payment. Communication and organization is key in creating an effective claims denial process and reducing your AR days.
5. Set Payer-Specific Policies
Make sure that you are putting in the time and effort necessary to educate personnel on payer-specific policies to ensure that your team has access to the training necessary, whether it’s Medicare, Medicaid, or other payment avenues. For many payers, online access to these policies are readily available and include easy to use webinar style training that has been created specifically for this purpose.
How Outsourcing Your Revenue Cycle Management Can Help Reduce A/R Days
When it comes to the financial wellbeing of medical facilities, billing operations are one of the most vital and important aspects of what it takes to manage a healthy and thriving health care facility. If you find yourself running a medical facility that is struggling with an increase of AR days and accruing debt, there is still a chance to turn around the revenue cycle.
Before you can reduce your AR days you first need to take a look at what is wrong with the infrastructure of your revenue cycle and outsource some efforts to a trustworthy vendor who can help you resolve claims, set up patient payment plans, and pay close attention to outstanding accounts.
When AR ages to the point of no return, it can be difficult to turn around a revenue cycle and increase cash flow, but the Midland Group is here to help. Contact us to learn about the many services we provide to help your hospital reduce those A/R days and gain maximum revenue.