Accounts Receivable days, or more commonly known as AR days, is an important Key Performance Indicator (KPI) for revenue management at a pediatric practice. Since claims are sent to insurance companies and patient payments, there will always be pending revenue to be paid or Accounts Receivable (AR). AR Days is a calculation to determine the average number of days of AR pending to be received by the practice. The lower the number, the lower amount of revenue pending to be paid, the better this is for the pediatric practice. For example, if the practice AR days are 60, the practice has approximately 2 months of Revenue waiting to be collected for the pediatric practice. If the practice AR days are 30, the practice has approximately 1 month of revenue waiting to be collected for the pediatric practice. This is a number the practice should check monthly as part of the monthly reports and look at one time per year during a yearly practice business review. There are a number of methods to improve the processes at a pediatric practice that help reduce the AR Days. Seven Tips to improve the AR Days of a pediatric practice include:
- Front Desk Team Members Verify Patient Demographics & Insurance Information on Each Visit
Consistent good data in the system is an important part of insuring prompt payment. The front desk team needs to be consistent on this task. This includes proper training, monitoring, and management by the practice administrator or the physician partners.
- Collect All Copays and Family Balances Prior to Each Visit
Practices should accept cash, check, and credit card to provide multiple payment options for copays and family balances. The family balances should be easily and consistently available for the front desk team to collect the payment. If the front desk team is missing this collection point, identify the training gaps so the practice collects the money.
- Check Eligibility for Each Visit
After verifying the demographics and insurance information, the front desk team members should check eligibility using the practice management system. Most payers send an electronic response to eligibility systems. For the payers that do not provide this capability, the front desk team member should either call the payer or use Navinet or other insurance web site to verify eligibility.
- Insure Providers Close Charts within 72 Hours of the Visit
The providers have an important role in decreasing the AR days – capturing the charges for the visit and closing their charts. Ideally, the charts should be closed within 24-48 hours with all charts closed within 72 hours of the visit. This method helps the practice store medical information if the patient returns, as well as being essential for AR management.
- Review Pending Charges and Send to Insurance Company Daily
A person from the billing team should be reviewing pending charges including CPT and ICD10 codes to minimize the chance of rejected claims from the payer. Additionally, the billing team member should review the coding to make sure this aligns with the approach desired by the practice. This task and process should be completed daily.
- Send at Least Two Patient Statements to Families within First 3 Months
The claims are sent to the payer and then an Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA) is received from the payer that shows the amount due from the patient/guarantor. Families are very busy today with multiple parents working and/or numerous activities. The initial patient statement might be loss by the family or misplaced. Additionally, some families do not pay their patient statements because they are waiting to see if the office is really collecting. This is why some families need a second statement to be sent. Ideally, both statements should occur within a 90 day period or less.
- Call Families for Late or No Payment Balances
For pending patient statements, a billing team member should call the family and state that they are following up on a pending patient statement. If the billing team member speaks with a parent, they might be able to take their credit card information over the phone and provide this back to the practice.
There are other steps and tips a pediatric practice can implement that can help reduce the AR days of the practice. Leveraging a proven pediatric medical billing team with consistent collection rates and services can decrease AR days, increase revenue as well as reduce administrative burden.