How to Reduce the Accounts Receivable Cycle with Smarter Billing

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Does your eye care practice have an unhealthy cash flow and out of control accounts receivable (AR)? Ever wonder where your revenue is hiding?

With nearly 60% of optometry practice revenue coming from professional fees for patient care (medical eye care and eye exams) and more patients having insurance, it’s easy for money to get lost. Trapping all the details so your claims get submitted and paid correctly on time is a challenge for every eye care practice.

How can you boost your revenue and reduce accounts receivable? Let’s look at common challenges, solutions, and marketing strategies that will help your practice reduce the number of days your accounts receivable goes unpaid and sits in the Aging bucket.

Common Challenges with Accounts Receivable Processes

We can’t stress enough how important it is to look at your AR to prevent serious cash flow problems. If you’re filing claims on a regular basis and posting the remits as they come in, then AR should be the true value of outstanding claims that need your attention.

If claims aren’t being filed, claims are rejected or denied, or payments aren’t being posted, your AR reports will not be accurate—you cannot trust them.

Let’s examine three optometry practices Fast Pay Health works with by reviewing main AR challenges and the solutions we set in place to reduce their Aging bucket.

PRACTICE #1:

  • Challenge: Issues with group enrollment procedures and filing correct codes and modifiers. The practice had $37,000+ in outstanding 60+ days Aging bucket.
  • Solution: Simplified the provider credentialing and group enrollment processes with all insurance payers. The AR Aging bucket is now at $3,700—a 90% reduction.  

PRACTICE #2:

  • Challenge: Cash flow was extremely low with $160,000 in outstanding 60+ days Aging bucket.
  • Solution: Corrected multiple coding and modifier issues and inaccurate information on denied Medicare claims for nursing facilities. By just fixing the denied Medicare claims, AR was quickly reduced to $112,000.

PRACTICE #3:

  • Challenge: $10,000+ in outstanding 30-120 days Aging bucket.
  • Solution: Reviewed and scrubbed all rejected and denied claims then made necessary corrections to recover the amounts due. Fast Pay Health made sure new claims were clean and free from errors before they were submitted. Within 30 days, the 30+ outstanding Aging bucket dropped to $2,000.

Accounts Receivable Reduction Strategies to Maximize Cash Flow

How can you get your accounts receivable lower and grow top-line revenue for a healthier bottom line?  Well, that’s where our smart billing strategies come in.

1. Submit Claims on a Daily Basis

Many major medical payers process claims in just 5 to 7 business days. Some even pay the same time every month or even every week, such as every Friday or every 15th or last day of the month.

By submitting claims either the day of the appointment or within one business day, you can maintain a constant flow of claims to get them paid promptly. If you file claims only once a week, your AR will grow like a weed, which means a bigger backlog to work through that often results in more billing errors.

2. Collect Co-pays, Coinsurance, and Deductibles up Front

During check-in or check-out, if the patient’s insurance plan includes a co-pay, coinsurance or deductible, always collect before they leave the office.

For example, let’s look at a five-day workweek: If you see 20 patients a day, and each patient has a $10 co-pay, you’re missing out on collecting $1,000 up front that you don’t have to bill the patient.

3. Make Invoicing a Priority

If there is a balance left for the patient to pay, it becomes increasingly difficult to collect payments the longer it’s been since the patient’s visit.

Sending invoices before the due date can reduce AR delays, help avoid late payments, and increase your chances of getting paid on time. Open balances also create a false image of your AR.

4. Help Patients Understand Their Bill

One of the key reasons that nearly 61% of patients may not pay a medical bill the provider sends them is the patient is confused! Confusion leads to ignoring the bill, which means you don’t get paid.

Review your current bill or invoice to make sure it’s easy to understand, and always include a due date. Stay connected with your patients between visits so that bill doesn’t slip through the cracks.  

5. Keep a Patient’s Credit Card on File

According to a 2017 Navicure and HIMSS Analytics Patient Payment Check-up survey, “78% of patients surveyed approve of having a debit or credit card on file (CCOF) for small charges, but only 20% of providers currently use CCOF.” 

Provider survey respondents said keeping a patient’s credit card on file to pay small balances under $200 would decrease days in patient accounts receivables (19.9%), bad debt and write-offs (29.1%), and cost of collections (20.2%).

6. Offer Electronic Billing Options

HIMSS Analytics reports that “52% of patients prefer electronic billing, but 89% of providers still bill via snail mail.” The study shows that “79% of patients are comfortable sharing their email address for billing and communications,” and “52% would prefer to be billed electronically vs on paper, even though 90% of providers bill via mailed paper statements.”

Consider offering electronic patient billing via an online bill payment tool through your patient portal or website. With online bill payments, you can reduce past-due balances, and cut back on the time staff spend chasing down payments, mailing bills, collecting funds over the phone, and manually posting payments. Get paid faster with text and email reminders.

Plus, eliminate the time it takes to rekey billing data as many eye care patient portals integrate with EHR and practice management systems by automatically posting payments.  When you give your patients the freedom to access a secure patient portal at their convenience—from home or on the go, on any mobile device—your relationship with patients will be more meaningful.

7. Use Automated Payment Reminders

Consider using an automated patient reminder service that offers voice, text, and email messages to let patients know when a payment is due. Your message can direct patients to call your office or to log in to their patient portal if you offer an online payment option. 

8. Post Remits When You Receive Them

Delaying posting payments keeps your AR artificially high and you could be missing denials. If you think getting EFT payments means you can wait to post, think again. Some payers have strict refiling rules, which limits your time to appeal a claim from the date of the remit. 

By handling remits within one to two days, you can move the balance to the secondary insurance and bill that much quicker. Or, you can move the balance that is due from the patient and generate a statement. It becomes increasingly difficult to collect payments the longer it’s been since the patient’s visit.

9. Create a Payment Calendar

Not all payers will have a consistent payment schedule, but you can usually get some of the big ones out of the way. Keep an eye on dates with the checks that come in to see if there’s a pattern. Knowing when you have big checks to deal with allows you to better prepare the rest of the week.

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10. Scrub Claims to Reduce Denials

Are you focusing on those pesky claims that don’t go through? Are you verifying insurance information and ensuring charge entry accuracy? Was it a non-covered service or was it linked to the wrong diagnosis, missing a modifier, or bundled with another procedure?

Accurate information is directly related to receiving reimbursements, and clean and accurate claims get paid faster. Make sure your claims are clean and free from errors before you submit them.

11. Research Unpaid or Aging Claims

Do you go through your aging claims daily to see why open balances are still outstanding? Pay close attention to rejections on the clearinghouse reports and denials on the remits.

It’s important to review claims submitted through clearinghouses, research claim status through payer websites, and contact payers by phone to figure out what happened to those unpaid balances when no remit can be found to help resolve the issue.

Always write down the name of the payer representative you spoke with during your conversation as this information may come in handy down the road. Either research immediately as the errors come up during posting or take note of all claims on a remit with errors and research those after posting the check.

Research any claims older than 30 days. In some cases, you might find the payer is still processing the claim—knowing which payers take longer to process allows you to focus on those who should pay soon.

If your patients have secondary insurance, you can run into timely filing denials. Many payers require you to bill a secondary insurance within 180 days or less after you receive the primary payment.

Related: 6 Eye Care Billing Rejections You Can Overcome

Reduce the AR Cycle with an Optometry and Ophthalmology Billing Service

Researching unpaid claims is a time-consuming process—it can take anywhere from five minutes up to one hour to research a single claim. With a dedicated billing service like Fast Pay Health, you have a team of experts focusing on your AR cleanup and insurance follow-up daily.

We review AR and aging claims to see why open balances are still outstanding, analyze unpaid claims, take the necessary steps to recover the amount due, verify receipt of claims with insurance companies, then enter the claims into your practice management system—making your AR cleaner.

"The Fast Pay Health team is FABULOUS. They go over and beyond the call of duty. The billing team has dropped our AR numbers, which has greatly freed me up at the office to do other tasks.” - Donise Bunch, Arkansas Eyecare Vision Source, Batesville, AR

Request a free practice analysis today and we’ll schedule a time that works for you. We work with each of our offices to provide a solid, customized revenue cycle management solution that is proven to help you get paid faster.