Implement some techniques in your medical practice to lower your Days in AR (DAR), collect more money, and optimize your cash flow.
Days in Accounts Receivable, or Days in AR, refers to the average number of days it takes a practice to collect payments due. Reducing your Days in AR can help you collect your medical practice’s payments faster and ensure timely reimbursements.
At Health Prime, we use the following formula: AR bucket divided by the average daily charges for a given period. On Health Prime Datalytics, we use 91 days’ worth of charges. Therefore, the formula for this metric is:
Accounts Receivable /
Charges total for the past 91 days / 91
According to the American Academy of Family Practice, the average industry objective for DAR is less than 50, with better-performing practices between 30 and 40.
At Health Prime, we manage internal benchmarks above the industry ones so medical practices can focus on best practices to run their businesses. Our benchmarks are tighter than the industry average. Health Prime’s benchmark baseline for DAR is 28 days.
Teamwork is essential
Your front-office and back-office staff should work together smoothly to reduce the number of days it takes your medical practice to receive reimbursement.
Your front office must carefully check eligibility and benefits, collect copays and outstanding balances, get the correct insurance information, and more. They need to verify all the information so the claim goes to the payer without an issue in the first pass (“clean claim”).
Your back-office team will have to ensure those claims go out clean. They need to verify that the information your front office staff sent is correct. It’s also essential to validate coding combinations and any required authorizations. If not, the clearinghouse will send it back, demanding more work from your team to appeal that claim and get paid for your money.
Best techniques to reduce your Days in AR
1. Have good controls in place at your front office
Monitor your front-office staff’s duties and relieve their administrative burden so they can focus on patient satisfaction and collecting money at the front door. Read our blog to learn how to improve your front desk processes with these best practices.
2. Verify eligibility and benefits
Your front desk staff should verify this information before the visit. They must check if the insurance is active if the patient has copays and has met their deductible, and if they have the right primary insurance. Confirm your practice is considered in-network for the patient’s plan. Validate this with the payer either by calling or through a portal. When scheduling a patient, check eligibility and benefits a day or two before the actual visit, especially if the date of scheduling and the date of visit are distant.
3. Automate your PMS (Practice Management System)
Many software applications have automated eligibility and benefits. Make sure your medical practice optimizes your PMS and uses every feature available according to your medical practice needs.
4. Make sure you collect upfront balance dues
Your front desk staff must be confident collecting copays, deductibles, and any outstanding balance at the time of visit. Also, be ready and know patient copays ahead of time.
5. Submit your claims within 4 days
The sooner you get the claims out, the better. Do this process quickly so the insurance company can verify the information. If it’s not a clean claim, it will give you more time to send an appeal and get paid for your work.
6. Handle all claims and get your payments electronically
Handling all claims electronically speeds up the process of handing the claims to the insurance company to process and pay. Also, getting your payments electronically can help you get your EOBs (Explanation of Benefits) and payment information so you can post your claims sooner.
7. Timely work on your denials
Don’t let your denied claims sit around. Have someone from your staff constantly working, responding, appealing, and correcting claims. At HP, we can help you with that. Our team will ensure your denials are followed up so your staff can focus on patient care and deliver outstanding customer experience. Learn more about how to reduce your denials in our blog What are some simple steps to get your denials under control?
Monitor your Days in AR
Compare your Days in AR against the industry standard and benchmark your metrics against our best practices. With its predictive modeling, Datalytics provides awareness of what your medical practice’s future holds. Notice trends in your practice and identify areas of improvement to lower this metric.
On Datalytics, you can analyze two critical metrics in the dashboard for Accounts Receivable: days in AR and the percent of primary insurance over 90 days from the first billed date. You will be able to see more information, such as Total AR, Insurance AR, and Patient AR. Also, a breakdown by financial class, aging buckets, or even claim level is needed.
If you want to know more about which metrics you can monitor with Datalytics, read our blog Datalytics: the RCM platform you need to know about.
At Health Prime, we can help!
At Health Prime, we can help you reduce your Days in AR and improve your RCM so you can ensure faster reimbursements:
- Optimize your use of your PMS: Get training for your medical practice to improve your use of your practice management system.
- Enroll as many payers as possible for electronic claims. You don’t have to print your claims; we take care of electronic claims for you.
- Enroll direct deposits or Electronic Funds Transfer (ETFs): Get that direct connection to the payer, ensuring you get your money faster.
- Process your claims as soon as they are given to us: We get them out as soon as possible. Our expected turnaround time is 48 hours once we get it, as long as the claim is clean. We make sure you get your payments posted quickly.
- Dive deep into your claims: If a claim is denied, our team will contact your front-office staff to determine the incomplete or inaccurate information, correct it, send back the claim, and appeal it if necessary so you can get paid.
From the Patient AR standpoint, we:
- Build statements.
- Send patient statements out regularly.
- Answer patients’ questions about their bills and encourage them to pay.
- Make arrangements for payment portals. This can help patients with their payments. They’ll receive a balance reminder on their phones and be able to pay their bills electronically.
If you want more information about reducing your Days in AR and improving your medical practice processes, email us at [email protected]. Meet us to discuss how Health Prime can help you achieve your goals. Subscribe to our Health Prime Datalytics blog for future articles. Learn how to improve your medical practice and about our software updates and new features. See how our analytics platform has tremendously impacted physician practice revenue cycle management.
