Our billing experts can do a free billing audit for your practice to find the reasons behind high AR.
AR in medical billing is a crucial aspect of revenue cycle management in healthcare. However, it often proves challenging for new healthcare providers.
In simple words, a healthcare provider should focus on denied claims and patien payments/responsibilities to reduce their AR and get maximum reimbursements. Also, you may hire AR experts to handle your AR while you focus on patient care.
There are several other factors that lead to high AR or Accounts Receivable that we will further discuss in this blog. We will also share some tips on dealing with AR in medical billing, so make sure you read it till the end.
AR or Accounts Receivable in medical billing is the payment that insurers or patients must pay you for the services that you provided earlier. Or we can say that it is the amount of money that your practice has yet to receive from the payors.
In medical billing, AR refers to the unpaid claims. Claims that you have submitted for payments and have not yet been paid are included in this category. It also includes claims denied or rejected by insurers.
Timely collection of AR is crucial for healthcare providers as it directly impacts the growth of their practice. Practices with huge AR often struggle to pay their bills, leading to their downfall.
So, what causes high AR for some practices while others enjoy timely payment collections from both the payors and the patients? Here are a few common factors leading to high medical billing AR.
There are a lot of other factors that might contribute to high accounts receivable in healthcare.
Here are some basic tips for every healthcare provider on how to minimize medical billing accounts receivable.
The best practice is to verify patient insurance details, including coverage limits, copays, deductibles, and policy expiration dates before they book an appointment. You can use the real-time eligibility-checking tools integrated with your EHR or billing software.
Eligibility verification reduces denied claims due to ineligible services and avoids unnecessary back-and-forth with the payors.
Educate your patients on their responsibilities during check-in. Provide them with a breakdown of their financial responsibilities, such as copays, outstanding balances, or deductible amounts. Try to use jargon-free language to make it easier to understand.
The next thing to do is enhance your patient communication. You should send automated payment reminders via email or SMS before and after appointments to ensure patients are aware of their responsibilities. Offering flexible payment plans, such as installment options and payment methods, may also encourage timely payments.
Keep in touch with the payor throughout the process to ensure timely claims reimbursement. You can confirm with the insurance provider or check the claim status by contacting the payor within 7-10 days of claim submission. Payor portals or clearing houses may also prove useful for checking claim status.
If your claim is denied, give it the top priority status and determine the reason for denial. Then, follow up with the insurer as soon as possible with corrections or the required documentation.
Successful practices are using advanced tools and software for billing and payment collection processes. Such tools offer a dashboard for AR aging analysis and claim prioritization, helping healthcare providers maximize reimbursements.
Most EHR/EMRs come with inbuilt clearing houses, bouncing back claims with coding errors. This leads to reduced denials from the insurers, resulting in efficient revenue collection. Also, you may get alerts for follow-up deadlines on unpaid claims.
Such tools minimize manual errors, accelerate payment cycles, and provide actionable insights to streamline AR management.
Improving your billing process plays a vital role in reducing AR. Creating standardized workflows for your billing tasks can help you optimize your revenue cycle management. Some major billing tasks that need optimization include eligibility verification, claim submission, prior/retro authorization, follow-ups, and AR management.
In addition, you may also enrol your billing staff to attend training sessions on compliance updates, coding changes, and payor-specific requirements. A well-trained biller can handle all your billing tasks with greater efficiency and accuracy.
Getting prior authorizations for services that are not covered under the plan can save you a lot of hassle and time. Make sure that you get authorization from the insurer before you provide any such service. Keeping a database of payor-specific guidelines on getting prior authorizations can save a lot of time and prevent last-minute cancellations.
Emergency care providers can’t keep their patients waiting to get authorization from the insurer. In such a case, you can provide immediate care to save your patient’s life and then reach out to the insurance company for a retro authorization.
Professional medical billing companies offer assistance to healthcare providers with billing-related tasks. Such companies often charge a small percentage of the claims they reimburse. You can outsource your billing to such companies to handle your claim submissions, denials, and appeals efficiently.
Outsourcing your billing tasks can save you a lot of time to focus on patient care and cut overhead costs for hiring onsite employees. Companies like MediBilling also offer a free billing audit for your practice. Make sure that the company you want to partner with uses advanced tools and automation. Also, find a HIPAA-compliant company to secure your PHI.
But how do you know about the exact AR for your practice? Well, you need to track all the pending or paid claims to know the estimated amount of pending payment collections. Here are three possible ways you can track your claims.
Manual tracking is a good option for small-scale healthcare providers who do not have many patients per month. It saves you money, as you will be tracking all your claims either through paperwork or a spreadsheet. However, it is time-consuming and prone to human error.
Electronic tracking refers to the use of software or tools that automate the tracking process. Though you still need an expert to manage the tool, it ensures PHI security. Also, such tools reduce your administrative burden by generating real-time reports, categorizing aging claims, and prioritizing follow-ups.
Third-party tracking is the best option for practices running short on employees and wanting to cut overhead costs. AR tracking companies or medical billing companies can help you systematically monitor and manage your AR. An expert third-party tracking company can also identify the bottlenecks in your billing that lead to reduced AR.
Tracking and managing AR has become much easier and more productive with automation tools. Most of the practices are now shifting to automation tools to manage their AR and claims. Here are some of the reasons why you should also consider using such tools for AR management.
There are several other ways to deal with AR in medical billing. For example, you can divide your AR into different categories and hire experts for each category to ensure maximum reimbursement. Similarly, there are several other ways to handle your AR effectively.
Dealing with AR in medical billing is not nerve wrecking if you are updated with the latest HIPAA and payor guidelines. If, unluckily, you are not, you always have the option of outsourcing it to professional billing companies like MediBilling .
30-45 days is a good AR days ratio as most payor pay within this time frame. However, some payors take more time to pay their bills, which may even increase by up to 90 days.
Efficient billing management is crucial to collecting revenue faster. Timely claim submission, following up on claims, verifying insurance details, and educating patients about their responsibilities, such as copays, deductibles, etc., are some of the best practices that ensure faster revenue collection.
Tracking AR days in medical billing is crucial to prevent revenue loss and ensure timely collections. Moreover, it also helps you identify the potential bottlenecks and gaps in your billing cycle.
Reviewing reports every other week is a common practice among healthcare providers. Though some providers review reports on a monthly basis, it may lead to delayed payments and increased AR.
At Medi Billing, we provide comprehensive medical billing services that cover everything from coding and claims to payment recovery. We take the stress out of your revenue cycle across all specialties so you can dedicate your time to patient care.
Copyright © 2026 Medi Billing | Powered by EZ MD Solutions
