One of the most crucial elements for fostering better practice growth is the days of accounts receivable (AR days). This metric measures the average time it takes to receive payment for a claim, based on the average daily volume of charges. The type of care and medical specialties influence the measurement level. However, experts recommend keeping AR days below 40. Handling accounts receivable efficiently can be challenging, but reducing AR days can immediately enhance practice efficiency.
Determinants of Accounts Receivable Days
Being aware of the typical causes of your AR days will enable you to address them promptly. This comprises:
- Delays in claim filing
- Incorrect Coding
- Errors in Data Entry
- Ineffective determination of eligibility
- Increase in Claims Rejection
- Error in the posting process
- Credentialing Delays
AR Management Challenges
Most practices have not updated their accounts receivable (AR) management procedures with cutting-edge technologies. For example, manually sorting through thousands of medical claims in a practice management system to identify which ones need further attention is an extremely difficult task. This complexity makes it challenging to assign an A/R manager effectively, as you want to direct them according to your practice’s workflow needs. As a result, this inefficiency leads to reduced revenue collection and diminished AR performance.
The Importance of RCM automation to streamline AR processes
The revenue cycle management (RCM) process encompasses a comprehensive approach that includes follow-up on accounts receivable and claim management. To enhance AR efficiency and minimize manual accounts receivable processes, healthcare organizations have chosen to invest in RCM automation for greater growth. As a result of this strategic decision, some firms have successfully reduced their AR days from over 60 to less than three months. One healthcare organization that invested in RCM reported significant improvements in claim organization and increased productivity among their AR employees. Additionally, the automation technology facilitates the creation of advanced work lists that staff members can access based on various criteria, such as date of service, denial code, and payment collection methods. Ultimately, the automation process boosted AR efficiency by minimizing the time practice staff spent navigating between health IT platforms to manage each account.
Implementing RPA in Revenue Cycle Management
RPA offers tremendous benefits for revenue cycle management (RCM) due to the numerous procedures that require precise execution. Human errors can significantly disrupt the medical billing and claims cycle of your healthcare organization. By implementing RPA, you can eliminate mistakes caused by mistyped data and simple human error. These procedures can also go more quickly thanks to robotic process automation. RCM automation makes it possible to do given tasks that might otherwise take a person several hours in a matter of minutes. A few RCM procedures that the RPA method makes simple to automate;
- Patient Billing
- Account Segmentation
- Pre-authorization
- Insurance Verification
- Claims Submission
RPA enables you to pull data from various information sources and automate redundant procedures. There is no need for manual information because the program verifies data and transfers information from one source to the next. Revenue cycle management strategies are particularly well-suited for enhancement through RPA, thanks to its focus on work processes and analytics as key drivers of improvement. For example, RPA plays a crucial role in accounts receivable (A/R) by reducing the effort needed to collect payments from payers and patients, while also streamlining upstream processes like eligibility verification and approval.
Conclusion
Healthcare systems are currently undergoing a significant transformation as automation introduces new features across various procedures. One of the most critical tasks for healthcare providers embarking on their automation journey is revenue cycle management (RCM). To boost practice productivity, leading healthcare providers are adopting advanced RCM automation technologies, such as RPA.
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