{"id":299,"date":"2018-01-30T07:33:19","date_gmt":"2018-01-30T07:33:19","guid":{"rendered":"http:\/\/www.medicalbillersandcoders.com\/dme-billing-services-blog\/?p=299"},"modified":"2023-06-14T08:28:58","modified_gmt":"2023-06-14T08:28:58","slug":"lacking-in-ar-management-can-harm-your-durable-medical-equipment-revenue","status":"publish","type":"post","link":"https:\/\/www.medicalbillersandcoders.com\/dme-billing-services-blog\/lacking-in-ar-management-can-harm-your-durable-medical-equipment-revenue\/","title":{"rendered":"Lacking in AR Management can Harm Your Durable Medical Equipment Revenue"},"content":{"rendered":"<p style=\"text-align: justify;\">Accounts Receivable (AR) is a key parameter in the financial division of every healthcare facility. It is defined as the money owed by the healthcare facility for the services rendered to the patients. Being a vital aspect of the <strong><em><a href=\"http:\/\/www.medicalbillersandcoders.com\/revenue-management-services.aspx\">revenue cycle management<\/a><\/em><\/strong>, the cash flow of the healthcare facility is directly proportional to the managing of AR.<\/p>\n<h2>AR is calculated as:<\/h2>\n<p style=\"text-align: justify;\">Total charges for last 6 months\/number of days in last 6 months = average daily charges<\/p>\n<p style=\"text-align: justify;\">Total AR \/ average daily charges = days in AR<\/p>\n<p style=\"text-align: justify;\">AR can be duly managed if the <strong><em><a href=\"https:\/\/www.medicalbillersandcoders.com\/medical-billing-companies\/dme-billing-services.aspx\">medical billing and coding professionals<\/a><\/em><\/strong> are knowledgeable about coding parameters, insurance rules, timely claim filing and follow up (of regular and rejected claims). Usually, the healthcare facility is paid by the insurance and the patient. A delay in either of these negatively affects revenues and leaves a great deal on the table. Hence, it is imperative to monitor the AR on a continuous basis. And this must be done by professionals who know the healthcare practices&#8217; <em>contract terms claims adjudication. <\/em>The professionals managing AR must also know how to calculate copays which the patients are required to pay.<\/p>\n<p style=\"text-align: justify;\">Other practices to be followed are: prior authorization, copays collection, insurance verification, referral management, and financial policies made clear to the patient.<\/p>\n<h2>Technology:<\/h2>\n<p style=\"text-align: justify;\">For an effectual revenue cycle, the workflow of the revenue cycle must have standard processes that need to be followed, including a unified front and back office. For this, a practice management system (PMS) or the electronic medical record (EMR) must be in use. Technology makes work a lot easier and must be embraced. The EMR maintains vital information such as patient records, visits, reimbursement related documents, and other details of claims and follows ups, assisting in managing ARs well.<\/p>\n<h2>Metrics:<\/h2>\n<p style=\"text-align: justify;\">Although other metrics are equally important in the healthcare business, with tighter margins, it is getting all the more imperative to manage the number of days in AR (the days refers to the number of days between the patient discharge and when the payment is made, creating a direct impact on the revenues). Further, the personnel responsible for collecting AR must be informed of the applicable benchmarks to be used for measuring performance. AR&#8217;s performance must be measured each month to know of any potential collection issues and the result it has been having on cash flows. The ultimate goal is to minimize the time between the claim submitted and the payments received. AR days measure this time and let the healthcare facility know their medical financial stability.<\/p>\n<h2>Benchmarks for collections:<\/h2>\n<p style=\"text-align: justify;\"><em>30 days for a high performing, 40-50 days for an average performing and 60 days or more for a below-average performing medical billing department. <\/em><\/p>\n<h2>Variables of A\/R:<\/h2>\n<p style=\"text-align: justify;\"><strong>1) Payer mix:<\/strong><br \/>\nThe medical billing and coding professionals handling AR must know the payers who pay sooner and those who don&#8217;t. &#8220;Cash in 60 days&#8221; is the time shown for newer bills. If this is not shown, it indicates a delay.<\/p>\n<p style=\"text-align: justify;\"><strong>2) Payment discrepancies:<br \/>\n<\/strong> Meeting with payers is a good option to solve discrepancies, taking steps to avoid them in the future, and dealing with pending claims to ensure timely payments.<\/p>\n<p style=\"text-align: justify;\"><strong>3) Aging bucket:<\/strong><br \/>\nThis bucket deals with 0-30 days, 31-60 days, and 61-90 days. A report must show the amount of A\/R in each aging bucket. This is then converted to a percentage of total AR. A monthly report showing these measures can be particularly helpful to monitor AR and its performance.<\/p>\n<p style=\"text-align: justify;\">If these practices are followed well, there should be no concern in getting reimbursed timely and accurately. Minimizing AR must be a team effort. The quicker the turnover in AR, the lesser amounts of efforts required in looking around for cash from other sources.<\/p>\n<p style=\"text-align: justify;\">For more information on medical billing and coding visit us on <strong><em><a href=\"http:\/\/www.medicalbillersandcoders.com\/\">Medical Billers and Coders (MBC)<\/a><\/em><\/strong> with over 18 years of experience in Medical Reimbursement management.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Accounts Receivable (AR) is a key parameter in the financial division of every healthcare facility. It is defined as the money owed by the healthcare facility for the services rendered to the patients. Being a vital aspect of the revenue cycle management, the cash flow of the healthcare facility is directly proportional to the managing [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":300,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30,7,10,12,13,16,48],"tags":[72,73,61,71,49,70,69,159,160],"class_list":["post-299","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-dme-billing-services","category-health-insurance","category-medical-billing","category-medical-coding","category-medical-equipment","category-revenue-cycle-management-rcm","category-why-outsource-medical-billing-services","tag-american-healthcare-billing-services","tag-billing-services-for-doctors","tag-dme-billing-and-coding-service","tag-dme-billing-companies","tag-dme-billing-service","tag-durable-medical-equipment-billing","tag-durable-medical-equipment-billing-companies","tag-durable-medical-equipment-revenue","tag-medical-billing-and-coding-professionals"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>Lacking in AR Management can Harm Your DME Revenue<\/title>\r\n<meta name=\"description\" content=\"AR is a key parameter in the financial division of every healthcare facility. 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