Managing accounts as a business proprietor is an important activity in the profitable healthcare business of India. A recent report states the healthcare industry in India is likely to grow at a rate of 22% annually. For healthcare providers, cash flow management may be difficult with late payments from patients and insurance companies, complexities in billing codes and legal compliances. So, let’s understand the key strategies to improve accounts receivable management and your healthcare business’ financial health.
Need For Accounts Receivable in Healthcare
In medical care, accounts receivable is the money due by third-party payers, insurance companies, or patients for healthcare services you supplied. Without a simplified AR process, you could experience delays with payments impacting quality, operations, and cash flow of care.
You might already understand that healthcare billing is complicated – with many insurance policies, billing codes and compliance demands. However, managing AR is critical to your business staying financially healthy.
Efficient AR management goes beyond chasing payments; it includes establishing a system which reduces delays, errors and ensures a steady inflow of money. When your AR management is optimized, your business has healthier profits enabling you to focus on patient care instead of on financial issues. You should also reduce bad debt by having clear policies on collections and payment terms in place.
Key Accounts Receivable Management Strategies
Some tactics to allow you to improve the AR process in your healthcare business are:
1. Automate Billing & Payment Processes
An excellent way to simplify AR management is automating your billing & payment flows. Automated creates the invoice and sends it in time. Automated systems can track outstanding payments, send reminders and accept digital payments.
Automated software might also help you handle insurance claims so they’re submitted properly the very first time around. This lowers the chance of claim denials, which may delay payments considerably.
2. Regular Follow Ups on Unpaid Claims
Insurance companies and patients might not always pay in time, which may make your cash flow tough. Routine follow-ups on unpaid claims will help lessen payments delays. Set up a system to remind you if payments are past due and follow up with insurance providers or patients whenever necessary.
You may also assign a team or outsource the follow-up, so your practice does not waste time and resources tracking unpaid invoices.
3. Simplify Payment Terms for Patients
Patients might not necessarily know how the payment works, causing delays and confusion. To avoid this, lower your payment terms. Make your billing statements easy to understand. Use simple language to explain services provided, the amount owed and the payment methods.
Several payment choices including credit cards, debit cards, UPI and payment plans might help patients pay their bills in time. This lowers the chance of bad debt and keeps steady cash flow.
4. Offer Large Bill Payment Plans
In healthcare, patients might face large bills, which is occasionally overwhelming, like for surgeries or long-term treatments. Offering payment plans might help patients afford paying their bills in smaller installments. This strategy can bring down bad debt and increase patient satisfaction to encourage them back to your facility for future care.
Set clear payment terms for these plans and also ensure that you and the patient understand the payment schedule. Offering flexible options can keep your cash flow flowing while alleviating patient pain.
5. Keep Current on Healthcare Regulations
Healthcare regulations in India are also changing continuously. Keeping up with regulatory changes is important to managing your AR. For instance, regulations impacting insurance claims, billing codes and compliance could impact your payments.
Keeping up with the latest regulations helps stop claim denials and payment delays. Also consider hiring accounting solutions specialized in healthcare finance to help you with regulatory compliance.
6. Reduce Denials Through Accurate Billing
Billing errors are a leading reason for claim denials in healthcare. Your billing department should be trained in coding and insurance claims submissions to avoid denials. Accurate billing means fewer delays, rejected claims, along with follow up work which impact your cash flow.
Buy a dependable billing system which eliminates human error and submits accurate claims. You may also utilize outside vendors or accounting services which offer healthcare billing solutions.
Final Thoughts
An essential responsibility for a medical practice in India is managing accounts receivable. By applying these strategies, such as automating billing, providing payment plans and staying in touch with healthcare laws, you can simplify your AR process, preserve money flow and also concentrate on quality patient care. Outsource your AR management to specialized accounting services in case it is too hard to manage in house. Do this so your financial activities can operate smoothly, while your healthcare business can flourish.
For efficient and professional AR management for your healthcare business, choose StartupFino today.
FAQs
What are accounts receivable in healthcare?
Accounts receivable (AR) in healthcare are payments made to healthcare providers by individuals, insurers, or third party payers for health services obtained. Efficient AR management ensures timely payment collection enabling healthcare facilities to maintain cash flow and also provide quality care without taking on financial burden.
What does a accounts receivable manager do in medical care?
An accounts receivable manager in healthcare manages billing and payment. They handle invoicing, track payments from patients and insurance, follow up unpaid claims and resolve billing issues. They keep steady cash flow by minimizing payment delays and improving the revenue cycle of the healthcare facility.
How can businesses manage accounts receivable?
Businesses can manage accounts receivable through automated billing, regular follow ups on unpaid claims, flexible payment options, along with correct billing. Key AR metrics like days sales outstanding (DSO) and aging reports also track payment delays. One other way to simplify this is via outsourcing AR management.
What responsibility does the accounts receivable for a medical company have?
The accounts receivable for a medical company must collect payments for services rendered on time. This includes billing and payment tracking, collecting overdue accounts and also complying with healthcare regulations. Proper AR management safeguards the company’s operational stability and financial health.
