Strategies for Maintaining High Account Receivables in Revenue Cycle Management
When it comes to revenue cycle management (RCM), monitoring and optimizing account receivables is one of the most critical aspects for ensuring financial stability and maintaining a healthy cash flow. Account receivables can be categorized into different intervals such as 0-30 days, 30-60 days, 60-90 days, 90-120 days, and 120 days. Each category provides insights into the health of your organization’s financial operations and aids in identifying potential issues that may affect your business's cash flows.
The inclusion of patient balances in your receivables is another important consideration. Often, patients allow their balances to age unnecessarily, leading to prolonged account balances and ultimately impacting your cash flow. Implementing a proactive strategy for managing patient balances can help you prevent this scenario.
Proactive Strategies for Managing Patient Balances
A strong patient balance management system can take various forms. One of the effective methods is to establish a multi-tiered communication system. For example, after a patient receives an initial bill, a statement is sent. If there is no response or payment, a second statement is subsequently issued. If the patient still does not respond, a third statement follows, along with a 15-day pay or go to collections letter.
Follow-up with patients is crucial. Many patients may not fully understand why they need to pay and may assume that the bill was not sent to their insurance plan. In these situations:
Initiate a telephonic conversation to open a dialogue with the patient. Clear any confusion and correctly inform the patient about the billing process. Encourage full payment if possible or set up a payment plan if the patient agrees to do so.For those patients who choose to ignore the 15-day letter, further action is taken by setting them up in collections. This system is designed to adjust the patient's balance in the billing system accordingly. While this process may seem strict, it helps to maintain a disciplined approach to collection and ultimately ensures a more responsive and satisfied patient base.
It is noteworthy that only a small percentage of patients (less than two percent) end up in collections due to this process. Achieving this level of control took time and effort, but the results are well worth it. With happier and more satisfied patients, you experience increased inflow of funds, and a significant portion of your accounts receivable (around 95%) remains in the 0-30-day category, providing a strong foundation for consistent revenue.
Critical Role of Daily Account Receivables Management
To prevent any of the aforementioned scenarios from affecting your accounts, it is crucial to manage your accounts receivables on a daily basis. This means monitoring and addressing issues as soon as they arise, rather than waiting until they become more significant. This proactive approach can significantly reduce the risk of extended account balances and financial complications.
Even if you rely on a third-party billing company, you can still maintain control over your accounts receivables by staying informed. Engage regularly with your billing representative to discuss the status of your receivables and any necessary adjustments. By staying in-tune with these details, you can ensure that your revenue cycle management is on track and contributing positively to your organization's financial health.
By implementing the strategies outlined above, you can achieve a more efficient and effective revenue cycle management system that maintains high account receivables and supports the financial stability of your organization.