Every day a large number of services are provided by physicians, hospitals and nursing homes to various patients. The patients are given treatment and care as a part of these services and each time they facilitate such services, they owe a certain amount to the physicians and hospitals. The physicians, nursing homes and hospitals then get paid by the patients as well as by the insurance companies in return.
So you can imagine how important the insurance model of every organization is. It is to be noted that the insurance model is very important for small as well as big organizations. This model helps in diligently recovering the over-due payments. The account receivable follow ups (AR follow-ups) help in running the business of such organizations. For example, in hospitals or nursing homes, the AR follow-ups department manages denial from various insurance companies and working on them to get resolved.
In the initial times, account receivable management or Revenue cycle management was merely treated as a departmental activity. But, in the recent times, it has turned into a specialized skill center comprising of professionals. In fact, it has become a crucial part of billing services that are provided by medical billing companies.
The importance of such processes has increased because a lot needs to be done so as to receive a payment in lieu of the medical services provided by physicians. Before the process of AR follow-up starts, the procedure of charge entry, verification and payment posting is done. Charge entry can be defined as a process where charge codes are entered into a healthcare claim form. In the process, there is a need to determine procedure as well as a diagnosis code based on the treatment given by doctors. The insurance companies also prescribe specific rules to determine valid claim. The audit team has to see whether the given claim is based on those specified rules or not. If the answer is in affirmative, then it would approve the claim for submission. The proper specified rules made by the companies lower the risk of claim denials. After the approval, the claim is submitted to the insurance company; which is then processed by the company. However, the claim which insurance companies pay to the provider also include denials. Hence, accounts receivable team is created which does follow up with the insurance company to solve the denials and take appropriate steps.
So you can imagine the amount of work that needs to be done before physicians can claim their money for the services provided by them. This explains why accounts receivable follow-up has become so important in the billing process.
The function of AR team is to analyze the denied claims, partial payments and non- payments. If any claim is submitted incorrectly, then AR team corrects it and submits the claim again. AR team also communicates constantly with the patient, insurance company and the medical office or nursing home. An AR team comprising of AR analytics and AR follow-up, should have qualities like patience, diligence, attention to skill and good analytical skills. The above qualities make the members a valuable asset of the organization.
Thus, we can conclude that account receivable management is the most important service provided by medical billing companies. The effectiveness of this account receivable team will determine the financial health of medical billing companies, physicians, nursing homes and hospitals.