Days in AR Over 90: A Targeted Recovery Strategy

Accounts receivable (AR) aging over 90 days can put a severe strain on a healthcare organization’s cash flow. Implementing a structured recovery plan is essential for reclaiming these funds. By using a targeted, bucket-by-bucket approach, organizations can systematically address overdue accounts and improve their AR metrics.

How do AR aging buckets work?

Accounts receivable is categorized into aging buckets based on how long invoices remain unpaid. These buckets typically include: 0-30 days, 31-60 days, 61-90 days, and over 90 days. Each bucket demands a specific strategy. For example, accounts in the 0-30 day bucket can often be resolved with automated reminders or simple follow-ups. However, accounts over 90 days frequently require more engaged intervention.

When dealing with AR over 90 days, it’s vital to investigate the reasons behind delays. A substantial number of these lengthy outstanding accounts arise from issues like claim denials, coding errors, or inadequate documentation. For instance, a claim linked to CARC code 22 was denied due to incomplete or invalid information. Understanding these specific causes allows for a more effective recovery approach.

What strategies can improve recovery for AR over 90 days?

Start by conducting a comprehensive review of each account over 90 days. This includes confirming patient eligibility, ensuring the presence of coverage, and checking for any missing prior authorizations. For example, a claim denied due to eligibility issues requires immediate attention. If a patient's eligibility isn’t confirmed before the service is rendered, recovery timelines can stretch significantly.

After identifying the problems, prioritize outreach efforts. Establish a follow-up system that categorizes accounts based on their aging status. For AR over 90 days, consider creating a dedicated team that focuses exclusively on these accounts. This team should communicate directly with payers to negotiate resolutions. In one case, a healthcare provider successfully recovered $50,000 in AR over 90 days by implementing a focused follow-up protocol for these problematic accounts. They achieved a 15% increase in their first-pass resolution rate within just three months by concentrating on these older receivables.

When should you escalate AR over 90 days accounts?

Not every account will respond positively to internal collection efforts. It’s essential to recognize when to escalate the process. Accounts that remain unresolved after 90 days should be assessed for potential escalation to third-party collections. Before taking this step, ensure all internal processes have been thoroughly exhausted, including appeals for denied claims.

For instance, if an account has been outstanding for over 120 days and has faced repeated denials due to coding errors, a different strategy may be necessary. Review the claim history; if the claim is valid, resubmit it with the correct codes. If the payer continues to deny the claim, escalate the case to collections to prevent further financial losses. Be mindful of timely filing limits; failure to resubmit or appeal within specified timeframes can lead to write-offs.

Why is tracking AR days important?

Monitoring days in AR is critical for maintaining healthy cash flow. Extended days in AR can indicate inefficiencies within your revenue cycle management processes. Specifically, if days in AR surpass 90, this often signals a backlog of unresolved issues demanding immediate attention. Regularly tracking this metric helps identify trends and refine your collection strategies.

For example, if you observe a sudden increase in AR over 90 days, investigate the root causes. Are claims being denied more frequently? Are there persistent issues with coding or documentation? By evaluating these trends, you can adjust your workflows to improve your clean claim rate, a crucial factor in reducing days in AR.

Key takeaways

• A bucket-by-bucket strategy enhances recovery efforts for accounts receivable over 90 days.
• Prioritize accounts based on aging causes to tailor outreach and resolution methods effectively.
• Regularly track days in AR to pinpoint inefficiencies and bolster cash flow management.

FAQ

What are the typical AR aging buckets?

AR aging buckets generally include 0-30 days, 31-60 days, 61-90 days, and over 90 days. Each bucket necessitates different follow-up and recovery strategies.

How can I reduce AR over 90 days?

To lower AR over 90 days, focus on diagnosing the reasons for aging, prioritize follow-ups, and create a dedicated team for these accounts. If necessary, escalate unresolved claims to collections.

What role does eligibility verification play in AR recovery?

Eligibility verification is critical for preventing denials that contribute to AR aging. Claims denied due to eligibility issues often represent a significant portion of AR over 90 days; thus, confirming coverage before service is vital.