What Does Your A/R Dashboard Look Like?

1
Key Objectives

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The accounts receivable (A/R) report is designed to analyze the financial health of the medical office. The purpose of A/R report is to categorize the receivables of the medical office according to the length of time patient accounts are outstanding. The aging, or number of days outstanding, of patient accounts, is important for identifying which accounts that are currently unpaid and need to be resolved.

The key objectives of an A/R report are:

  • Monitoring: The A/R report is an important management tool that allows the medical office to monitor key performance indicators (KPIs) in order to evaluate processes and activities, make important business decisions, and improve financial performance.
  • Analyzing: The A/R report allows management to analyze the performance of the medical office in order to identify potential problems that arise, identify the root cause of problems that exist, and determine the effectiveness of current processes and procedures.
  • Managing: The A/R report provides the information necessary to effectively manage the medical office staff and processes with clear focus and direction to reach organizational objectives and goals.

2
Monitoring the A/R Report

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The A/R report is an important management tool that allows the medical office to monitor key performance indicators (KPIs) in order to evaluate processes and activities, make important business decisions, and improve financial performance.  Monitoring the A/R report provides an indication as to where the medical office is in two major areas:

  1. Billing Activity: The A/R report will indicate what has been billed and what is currently unbilled on a daily, weekly, and monthly basis.
  2. Collection Effectiveness: The A/R report will indicate what has been collected, what hasn't been collected, and what is currently aging or unpaid overtime.

3
Analyzing A/R Data

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The A/R report allows management to analyze the performance of the medical office in order to identify potential problems that arise, identify the root cause of problems that exist, and determine the effectiveness of current processes and procedures. Analyzing A/R data allows management to make critical decisions on how to effectively turn accounts from an unpaid status to a paid status.

Billing Activity

Insurance claims should be billed within 3 days of the discharge date. This 3-day window allows a claim to be created for billing and provides time for the claim to be reviewed and edited for accuracy. Sometimes accounts are held longer than 3 days pending further review or information before billing.  Keeping track of how quickly or slowly bills are submitted to insurance payers provides insight into areas that may require more attention.

Collection Effectiveness

When the AR report indicates that revenue has not been collected within 30 days of the patient's discharge date, this is a warning to management that there is a risk to the financial state of the medical office. Aged accounts are outstanding patient accounts that are over 30 days.  The A/R report usually indicates aging accounts with the following information:

  1. Payer name
    • BCBS
    • Commercial
    • HMO
    • Liability
    • Medicaid
    • Medicare
    • Self Pay
    • Workers Comp
    • Other
  2. Billing order
    • Primary
    • Secondary
    • Tertiary
  3. Number of days aging after discharge
    • Days 0 - 30
    • Days 31 - 60
    • Days 61 - 90
    • Days 91 - 120
    • Days 121 - 150
    • Days 151 - 180
    • Days 180+

4.  Total dollars outstanding and percentages

4
Managing Based on A/R Data

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The overall goal of the A/R management is to achieve the shortest collection period as possible. To ensure cash flow is sufficient for effective management, the medical office has the responsibility to maximize its revenue potential.

Accounts receivable management involves nearly all areas of the medical office. Successful accounts receivable management requires a full understanding of how each area or department relates to and influences the revenue cycle and the A/R collection period.

Effective collections follow-up results in the speedy resolution of your medical office claims. Claims follow up should begin as quickly as 7 to 10 days after your claim has been submitted for payment. Immediate efforts to get claims paid will not only reduce your accounts receivable days but also increase cash flow.

Adequate staffing with proper collections training will provide the desired outcome in the collections phase of the revenue cycle. Medical office staff should be aware of the fundamental steps necessary for efficient follow-up of insurance claims.