What are AR Days?
Account Receivables Days or AR Days indicate the time taken to receive payment on a claim. Accounts Receivable Days are a significant indicator of the financial health of a practice. In the United States, the average AR day is 52.46 days. The lower the figure, the better the financial situation. A lower figure means that there is more timely payment of claims and patient bills and cash flow is steady.
Know where you stand in terms of AR Days
Compute AR Days in the following manner
Average Daily Charges = (total charges for last 180 days) ÷ 180
AR Days = (total accounts receivables) ÷ (Average Daily Charges)
The billing department’s performance can be assessed by pooling the accounts receivables into “aging buckets” of 0-30 days, 31-60 days, 61-90 days and 90+ days.
5 key strategies to dynamically manage AR Days
1) File claims daily:
Establishing a system of filing claims on a daily basis will help keep the cash flow healthy. File claims on the day of the appointment or at the latest the next day.
2) Collect copays upfront with payment options:
If the patient’s insurance plan includes a copay or deductible, collect it upfront during check-in or check-out. It becomes easier for all when patients know in advance what their out-of-pocket responsibility is. Further, patients are likely to pay at once when they see that they have payment options like a check, online payment, credit card and mobile app.
3) Accurate documentation and clean claims:
Maintaining accurate records of all coding and billing cases will aid you on many fronts, especially for looking up patterns in the revenue cycle that need correction. The correctness of demographics entry and charge entry must be verified before electronic claims submission.
4) Managing Denials:
Denials should be studied and managed on a regular basis. Investigating the causes of denials will ensure that they are not repeated. Further, denials must be attended to without delay. Allowing them to accumulate may ultimately result in them becoming uncollectible.
5) Do payment posting without delay:
When payments are received from payors, post them without delay. This will help you with re-filing as payors may have strict rules regarding the time limit for re-filing. Also, you will not miss denials. In the case of balance, early action can be taken to process secondary insurance or bill the patient.
Bristol Healthcare can help you
The financial health of the practice is crucial to keeping its doors open. If you are not able to handle the pressures of efficiently running the revenue cycle, we are here to help you. Bristol Health Services has been serving healthcare professionals for over twenty years with commitment. We have helped providers to reduce their denials and increase their revenue. Our team will assist you in bringing down your AR Days.
Talk to us and let us assist you in efficiently managing your Accounts Receivable Days.