Achieving a Healthy Accounts Receivable Days Figure: Best Practices for Better Billing Processes

Days in Accounts Receivable shows how many days it usually takes for a healthcare provider to get paid after giving services. A lower number is better because it means the practice gets money faster. The usual goal is 30 days or less. Hospitals might take longer because of government payments, but generally, keeping Days in A/R under 40 days means billing and collections are working well.

To find Days in A/R, divide the total money owed by the average daily charges over a time period. For example, if a practice is owed $300,000 and daily charges are $10,000 on average, the Days in A/R is 30 days. Checking this number often helps find delays or problems affecting money coming in.

The Importance of a Healthy Days in A/R Number

Having a high Days in A/R can cause money problems. It may make it hard to pay staff, buy new technology, or expand services. Thomas John, CEO of Plutus Health, says late payments can cause clinics to close. He says money problems affect not just billing but also the quality of patient care.

Keeping Days in A/R low helps with financial planning and cuts down on work to chase late payments. This steady income is important to keep good care going in a complex healthcare system.

Best Practices for Managing Accounts Receivable Days

• Timely and Accurate Billing
  Bill quickly and correctly. Charges should be recorded and sent within 3 to 5 days after service. Late or wrong billing makes Days in A/R longer and can cause claims to be denied. Hospitals may have slightly longer billing times but should aim for less than 48 hours when possible.
• Improving Clean Claim Rates
  The clean claim rate means the percent of claims accepted without errors. Aim for 98% or higher. Errors cause denials and slow payments. Enter patient and insurance info correctly, use proper coding (including updates for telehealth), and verify eligibility before service to improve this rate.
• Managing Denial Rates
  Claims may be denied for coding mistakes, missing info, or eligibility problems. Most healthcare denial rates are 5% to 10%, but top groups keep it under 5%. Fixing denials quickly and resubmitting them helps. Fixing 85% of denials within 30 days reduces old unpaid accounts.
• Regular Accounts Receivable Analysis
  Watch the portion of accounts unpaid for over 90 days. Keep this between 10% and 15%. A high number shows problems in billing or collecting. Break down unpaid accounts by payer or type to target collections.
• Collecting Patient Payments at Point of Service
  Collect payments when patients check in or out. Chances of getting paid drop by 20% after patients leave and keep going down. Clear communication about costs before service is important, especially with more high deductible plans.
• Clear and Consistent Billing Policies
  Have set rules for billing, credit, and collections. This helps everyone follow the same steps. Good communication reduces confusion and encourages on-time payments.
• Engaging Client-Facing Teams in Collections
  Involving sales or patient service staff in collections helps. These teams know patients well and can spot payment issues early to help fix them.

Leveraging Technology for Efficient Accounts Receivable Management

Automating billing and accounts receivable tasks cuts down on errors and inefficiencies from manual work. In the U.S., using electronic billing and online payment sites helps increase collections and lowers Days in A/R. Software platforms can send automatic reminders and offer many easy payment choices like wire transfer, debit, and credit cards.

Automation also keeps track of invoice changes and payment follow-ups regularly. This stops delays caused by human mistakes or inconsistent work. Linking billing with patient portals shows patients their balances and payment deadlines, reducing confusion and missed payments.

AI and Automated Workflow Integration: Enhancing Revenue Cycle Performance

• Predictive Analytics for Denial Management
  AI can look at claims to guess which ones may be denied before sending. This lets billing teams fix mistakes early and submit better claims. The goal is a first-pass payment rate of 95% or higher.
• Automated Claim Processing and Resubmission
  Robotic process automation (RPA) does repetitive data entry and claim resubmission, saving time. It speeds up claim processing and lowers Days in A/R.
• Real-Time Monitoring and Reporting
  AI tools show up-to-date accounts receivable info. Managers can find delays or unpaid accounts early. Automatic alerts help staff follow up quickly.
• Integration with Electronic Health Records (EHR)
  Connecting billing systems with EHRs keeps patient info accurate. This includes eligibility and procedure codes, which reduces claim denials.

Using AI tools helps practices with fewer staff. It lets billing teams focus on harder problems and patient communication, which keeps good payer and patient relationships.

Industry Benchmarks and Their Significance

• Days in Accounts Receivable: Aim for 30 days or less; up to 40 days is accepted; avoid going over 45 days.
• Clean Claims Rate: 98% or higher to lower claim denials.
• Denial Rate: Keep under 5% for faster payments.
• Net Collection Rate: Maintain at least 95%; 97-99% is best, showing good collection of money owed.
• Percentage of AR Over 90 Days: Keep below 10-15% to avoid stuck revenue.
• Billing Lag: Submit claims within 48 hours after service to avoid delays.
• Bad Debt Ratio: Keep under 5% to limit losses from unpaid accounts.

Practices should check these numbers every month to catch problems early and fix them quickly.

The Role of RCM Outsourcing and Internal Management Balance

Outsourcing revenue cycle management can help when staff are short and cut costs. But it may reduce control over customer communication and hide problems in processes. Many U.S. practices keep managing accounts receivable internally using automation to stay transparent and responsive. This helps finance, clinical, and admin teams work well together on billing and collections without hurting patient relationships.

At the same time, working with specialized RCM companies using AI and automation can help bigger groups or those without enough in-house knowledge handle growing billing needs more easily.

Compliance and Regulatory Considerations

Medical practices in the U.S. must follow rules like the No Surprises Act and Hospital Price Transparency. These require clear info about patient costs before services are given. This lowers surprise bills, improves patient satisfaction, and boosts collections. Clear communication works with technology to speed up payments and improve Days in A/R by setting the right patient expectations.

Final Thoughts for Medical Practice Leaders in the U.S.

Getting a good Days in Accounts Receivable number needs a full plan. This includes accurate billing, fast claim sending, good denial management, and working with patients on payments. Using AI and automated workflows is changing revenue management by making it more accurate, cutting errors, and speeding collections.

Practices that watch their important numbers, like Days in A/R, and use these best methods can keep steady cash flow, reduce extra work, and provide quality patient care in a difficult healthcare setting.