In medical billing, accounts receivable refers to the outstanding payments owed to a healthcare provider for services rendered to patients. Managing accounts receivable is crucial for the financial health of medical practices. There are several types of accounts receivable in medical billing, each representing different stages of payment processing. Here are some common types:
Current Accounts Receivable
These are the outstanding balances for services provided recently and are within the payment terms agreed upon with insurance companies or patients. Typically, these are due for payment within 30 to 60 days from the date of service.
Aging Accounts Receivable
This refers to the breakdown of current accounts receivable based on the length of time the balances have been outstanding. Aging is often categorized into different buckets, such as 30-60 days, 61-90 days, 91-120 days, and over 120 days. The older the account, the more challenging it may be to collect payment.
Insurance Accounts Receivable
These are outstanding balances owed to the healthcare provider by insurance companies. It includes claims that have been submitted but are still awaiting processing or have been denied and need to be appealed.
Patient Accounts Receivable
This category includes outstanding balances owed by patients after insurance claims have been processed. Patients are responsible for co-pays, deductibles, and any remaining portion of the bill that insurance doesn’t cover.
Self-Pay or Uninsured Accounts Receivable
These are balances due from patients who do not have insurance coverage or who have chosen to pay for services out-of-pocket.
Bad Debt Accounts Receivable
This type of accounts receivable represents unpaid balances that are considered uncollectible. It occurs when a patient or insurance company is unable or unwilling to pay, and collection efforts have been exhausted.
Contractual Adjustments
When healthcare providers have agreements with insurance companies or government programs, certain amounts of the billed charges may be contractually adjusted, meaning the provider agrees to accept lower payment than the standard fee schedule.
Denials and Appeals
These are accounts receivable that involve claims that have been denied by insurance companies, and the healthcare provider is in the process of appealing the decision to seek proper reimbursement.
Self-Insurance Accounts Receivable
In some cases, large organizations or companies may self-insure their employees’ health coverage. Accounts receivable from self-insured entities represent the amounts owed by those organizations for medical services provided to their employees.
Proper management of these various types of accounts receivable is essential for medical practices to maintain cash flow and financial stability. Billing staff and revenue cycle management teams work diligently to process claims, follow up on outstanding balances, and pursue collections to ensure that the healthcare provider is compensated for the services they render. Having and external support from established AR Calling team can make lot of difference in terms of quality and collections.
About Ecare
e-care India is one of the pioneering offshore medical billing companies based in India that promises to avoid the risks involved with Claims Denials and Accounts Receivables. With more than 23 years of experience in the industry, e-care’s 3 delivery centers have been providing end-to-end medical claims processing services seamlessly to its clients. With its expertise and experience, Ecare has been delivering the best during results during this pandemic to its 100+ client across various states in US. To know more about e-care and its services, log on to Accounts Receivable Management Services & Solutions (ecareindia.com)