February 21, 2024 by AMS Solutions 0 Comments

There are many elements to your practice’s revenue cycle management, but one of the central players is the accounts receivable or A/R, as we call it. From the moment a patient’s invoice goes out the door, the clock starts ticking! Understanding how time is a crucial factor in your accounts receivable management can help optimize your revenue and avoid financial losses.

What Is Accounts Receivable?

Accounts receivable (A/R) are the invoices or reimbursements owed to your medical practice, hospital or healthcare organization. Once your medical billing team submits a claim to a health insurance company or charges a patient on your behalf, the A/R process begins. After the bill is reimbursed to your practice, the account is no longer in A/R. 

The longer an account stays in A/R, the less money your practice collects. If this metric piles up and after writing off “bad debt”, your business’s lost revenue will increase, resulting in less cash flow to maintain operations and continue providing care to your patients.

Accounts Receivable Aging

Aging in A/R is a metric used in healthcare revenue cycle management to track the time of outstanding accounts receivable. It is a vital report that categorizes outstanding invoices by the length of time they have been unpaid. This allows to identify overdue accounts, how long they have been outstanding and the data obtained is critical for managing cash flow, identifying trends in payment patterns, prioritizing collections efforts and keeping track of your revenue cycle’s health.

In healthcare RCM, we categorize A/R based on timeframes, usually in 30-day buckets:

  • 1-30 days
  • 31-60 days
  • 61-90 days
  • 91-120 days
  • 120+ days

Our RCM industry experts recommend keeping your average days in A/R to 35 or less and the unpaid claims older than 90 days in 10% or less.

Trust in Medical Billing professionals to handle your A/R

At AMS Solutions, we count on a team of experts at your service that will work strategically implementing actions during key windows while managing your Accounts Receivable — No matter the size: From solo private practices, clinics and hospitals to large healthcare organizations in the United States. Learn more about AMS Solutions’ RCM and medical billing services by scheduling a quick intro call.

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