In the healthcare industry, especially in OBGYN practices, managing accounts receivable (AR) can be one of the most challenging aspects of running a business. With insurance companies, patient billing, and complicated payment processes, it’s easy for payments to be delayed. However, reducing your days in accounts receivable (DAR) is crucial for improving cash flow and overall financial health. By taking the right steps, OBGYN practices can optimize their billing and collection processes to achieve faster reimbursements and improve financial performance. Here, we provide actionable tips that OBGYNs can use to enhance their AR management and decrease DAR.
- Analyze Your Current Accounts Receivable Process
The first step in improving your days in accounts receivable is to understand your current process. Perform a detailed analysis of your AR system to identify bottlenecks. Break down the flow of insurance claims and patient payments from the time a service is provided until payment is received. Are there any consistent delays? How long does it take to process insurance claims? Is your team consistently following up on outstanding claims?
By gaining a deep understanding of where the delays occur, you can pinpoint areas for improvement. Set specific targets for reducing DAR and develop key performance indicators (KPIs) that your team can track regularly.
- Streamline Your Billing Process
A streamlined billing process is essential for reducing days in accounts receivable. Ensure that your billing team is properly trained in the use of medical billing codes and electronic health record (EHR) systems to avoid errors that can lead to rejected claims.
One key element is to verify patient insurance information at every appointment. Ensuring that you have the most up-to-date information will reduce claim denials and rejections. Additionally, consider automating your billing process by utilizing medical billing software. Automation reduces manual errors, improves accuracy, and speeds up the time between service delivery and claim submission.
- Implement a Proactive Claims Management Strategy
Timely submission and aggressive follow-up on insurance claims are critical to reducing your accounts receivable days. Your billing team should submit claims as soon as possible after services are rendered and be proactive in following up with insurance companies on delayed or denied claims.
Set a protocol for timely and consistent follow-ups, ensuring that denied claims are quickly resubmitted with the correct information. Additionally, review your claims denial rate regularly and identify patterns. Common denials should be addressed with additional staff training or adjustments in the billing process to avoid repetitive mistakes.
- Offer Multiple Payment Options for Patients
Patient payments often make up a large portion of an OBGYN’s accounts receivable. To encourage faster payment from patients, offer a variety of payment methods. This can include online payments through a patient portal, automated credit card payments, and traditional methods like checks or payment plans.
It’s important to communicate payment expectations clearly to patients upfront. Provide them with a detailed billing statement and options for payment immediately after their appointment. Offering flexible payment plans can also help reduce the number of unpaid bills and improve your overall collections.
- Improve Patient Communication
Clear and consistent communication with patients can lead to quicker payments and fewer outstanding bills. Educate your patients on their financial responsibility, what their insurance will cover, and when payments are due. Sending automated reminders about outstanding balances or upcoming payments via email, text, or phone can help keep patients on track with their payments.
A robust communication strategy can also include regular follow-up after services have been provided, making it easier to catch any potential billing errors early on.
- Track Key Metrics Regularly
To ensure continuous improvement in your AR process, it’s essential to track key metrics related to days in accounts receivable. These can include your average days to collect, claims denial rate, and the percentage of outstanding accounts receivable past 90 days.
Regular tracking allows you to identify trends, pinpoint issues, and assess whether your AR processes are improving over time. Monthly AR reports provide a clear picture of your practice’s financial health and give your team the data needed to make necessary adjustments.
- Outsource Medical Billing
If your team is struggling to manage AR effectively, consider outsourcing your medical billing to a professional third-party billing service. These services specialize in managing claims and reducing accounts receivable days by leveraging their expertise and technology.
Outsourcing can be especially beneficial for smaller OBGYN practices that do not have the resources to hire a full in-house billing team. Billing companies also tend to have strong relationships with insurance companies, which can help speed up the claims process and reduce denials.
- Review and Negotiate Payer Contracts
In some cases, improving your days in accounts receivable may require renegotiating your contracts with insurance payers. If you consistently face long delays in payment from certain payers, it may be time to review and update the terms of your contract.
Work with an experienced healthcare attorney or consultant to review the payer contracts and negotiate more favorable terms, such as quicker reimbursement timelines or improved reimbursement rates.
- Train and Support Your Billing Team
A well-trained and supported billing team is crucial for optimizing your accounts receivable process. Ensure that your billing staff stays up-to-date on the latest changes in medical billing codes, insurance regulations, and best practices for managing AR.
Provide ongoing training opportunities and resources for your team to improve their efficiency and accuracy. Additionally, investing in billing software tools that provide real-time updates and reporting capabilities can empower your team to perform at their best.
- Create an AR Follow-Up System
To keep accounts receivable under control, establish a regular follow-up system for unpaid claims. Designate specific billing team members to manage and follow up on outstanding claims, ensuring that nothing falls through the cracks. Set timelines for when follow-up should occur, whether it’s 30, 60, or 90 days after a claim was submitted.
By having a structured system in place, you can ensure that your OBGYN practice is actively working to reduce days in accounts receivable and recover payments as efficiently as possible.
Conclusion
Improving days in accounts receivable is essential for maintaining a healthy cash flow and ensuring the long-term success of your OBGYN practice. By streamlining your billing processes, implementing proactive claims management, improving patient communication, and regularly tracking key metrics, you can reduce the time it takes to get paid for your services. Whether you manage billing in-house or outsource to a third-party service, taking a strategic approach to AR management will help you achieve faster reimbursement and improve your practice’s overall financial performance.