How to Reduce the Accounts Receivable Cycle with Smarter Billing

Does your eye care practice have unhealthy cash flow and out-of-control accounts receivable (AR)? Ever wonder where your revenue is hiding?

On average, 55% of optometry practice revenue comes from professional fees for patient care (medical eye care, eye exams, and treatment). With more patients having medical insurance and managed vision plans, it’s easy for money to get lost. Trapping all the details, so your claims get submitted and paid correctly on time is a challenge for every eye care practice.

How can you boost your revenue and reduce accounts receivable? Below we will review common challenges, solutions, and marketing strategies that will help your practice reduce the number of days your AR goes unpaid and sits in the aging bucket.

Common Challenges with Accounts Receivable Processes

We can’t stress enough how important it is to look at your AR to prevent serious cash flow problems. If you’re filing claims regularly and posting the remits as they come in, AR should be the true value of outstanding claims that need your attention.

If claims aren’t being filed, your claims are rejected or denied, or payments aren’t being posted, your AR reports will not be accurate.

Let’s examine three optometry practices our Fast Pay Health team works with by reviewing the main AR challenges and the solutions we set in place to reduce their aging bucket.

PRACTICE #1: Provider Credentialing/Enrollment and Incorrect Codes

• Challenge: Issues with group enrollment procedures and filing correct codes and modifiers. The practice had $37,000+ in outstanding 60+ days aging bucket.

• Solution: Simplified the provider credentialing and group enrollment processes with all insurance payers. The AR Aging bucket is now at $3,700—a 90% reduction.

PRACTICE #2: Denied Medicare Claims

• Challenge: Cash flow was extremely low with $160,000 in outstanding 60+ days Aging bucket.

• Solution: Corrected multiple coding and modifier issues and inaccurate information on denied Medicare claims for nursing facilities. By just fixing the denied Medicare claims, AR was quickly reduced to $112,000.

PRACTICE #3: Rejected and Denied Claims

• Challenge: $10,000+ in outstanding 30-120 days Aging bucket.

• Solution: Reviewed and scrubbed all rejected and denied claims then made necessary corrections to recover the amounts due. Fast Pay Health made sure new claims were clean and free from errors before they were submitted. Within 30 days, the 30+ outstanding Aging bucket dropped to $2,000.

Boost Cash Flow with These 10 Optometry Billing Strategies

How can you lower our accounts receivable and grow top-line revenue for a healthier bottom line? Well, that’s where our smart billing strategies come in.

1. Submit Claims Daily

Many major medical payers process claims in 5 to 7 business days. Some pay at the same time every month or even every week, such as every Friday or every 15th or last day of the month.

By submitting claims either the day of the appointment or within one business day, you can maintain a constant flow of claims to get them paid promptly. If you file claims only once a week, your AR will grow like a weed, which means a larger backlog to work through that often results in more billing errors.

2. Collect Co-pays, Coinsurance, and Deductibles Up Front

During check-in or check-out, if the patient’s insurance plan includes a co-pay, coinsurance, or deductible, always collect before they leave the office.

For example, look at a five-day workweek for four weeks: If you see 20 patients a day, and each patient has a $15 co-pay, you’re missing out on collecting $1,200 upfront that you don’t have to bill the patient.

3. Make Patient Invoicing a Priority

If a balance is left for the patient to pay, it becomes increasingly difficult to collect payments the longer it’s been since the patient’s visit.

Sending invoices before the due date can reduce AR delays, help avoid late payments, and increase your chances of getting paid on time. Open balances also create a false image of your AR.

4. Help Patients Understand Their Bill

One of the key reasons patients may not pay a medical bill the provider sends them is the patient is confused, and confusion leads to ignoring the bill, which means you don't get paid.

Review your current bill or invoice to make sure it’s easy to understand, and always include a due date. Stay connected with your patients between visits so that bill doesn’t slip through the cracks.

5. Offer Electronic Billing Options

Consider offering electronic patient billing via an online bill payment tool through your EHR patient portal or website. With online bill payments, you can reduce past-due balances and cut back on the time staff spend chasing down payments, mailing bills, collecting funds over the phone, and manually posting payments. Get paid faster with text and email reminders.

Eliminate the time it takes to re-key billing data as many eye care patient portals integrate with EHR and practice management systems by automatically posting payments. When you give your patients the freedom to access a secure patient portal at their convenience—from home or on the go, on any mobile device—your relationship with patients will be more meaningful.

6. Use Automated Payment Reminders

Consider using an automated patient reminder service that offers voice, text, and email messages to let patients know when a payment is due. Your message can direct patients to call your office or to log in to their patient portal if you offer an online payment option.

7. Post Remits When You Receive Them

Delaying posting payments will keep your AR artificially high, and you could be missing denials. If you think getting electronic funds transfer (EFT) payments means you can wait to post, think again. Some payers have strict refiling rules, which limit your time to appeal a claim from the remit date.

You can move the balance to the secondary insurance and bill that much quicker by handling remits within one to two days. Or, you can move the balance due from the patient and generate a statement. It becomes increasingly difficult to collect payments the longer it’s been since the patient’s visit.

8. Create a Payment Calendar

Not all payers will have a consistent payment schedule, but you can usually get some of the big ones out of the way. Keep an eye on dates with the checks that come in to see if there’s a pattern. Knowing when you have many payments to deal with allows you to better prepare for the rest of the week.

9. Scrub Claims to Reduce Denials

Are you focusing on those pesky claims that don’t go through? Are you verifying insurance information and ensuring charge entry accuracy? Was it a non-covered service, linked to the wrong diagnosis, missing a modifier, or bundled with another procedure?

Accurate information is directly related to reimbursements, and clean and accurate claims are paid faster. Make sure your claims are clean and free from errors before you submit them.

10. Research Unpaid or Aging Claims

Do you review your aging claims daily to see why open balances are still outstanding? Pay close attention to rejections on the clearinghouse reports and denials on the remits. You can run into timely filing denials if your patients have secondary insurance. Many payers require you to bill secondary insurance within 180 days or less after you receive the primary payment.

• Review claims submitted through clearinghouses, research claim status through payer websites, and contact payers by phone to figure out what happened to those unpaid balances when no remit can be found to help resolve the issue.

• Write down the name of the payer representative you spoke with during your conversation, as this information may come in handy down the road. Either research immediately as the errors come up during posting or take note of all claims on a remit with errors and research those after posting the check.

• Research any claims older than 30 days. In some cases, you might find the payer is still processing the claim—knowing which payers take longer to process a claim allows you to focus on those who should pay soon.

Related: Medical Billing Clearinghouse vs. RCM: Here's the Big Difference

Reduce the AR Cycle with a Complete Optometric Billing Service

Researching unpaid claims is time-consuming; it can take anywhere from five minutes to one hour to research a single claim. With a dedicated billing service like Fast Pay Health, you have a team of experts focusing daily on your AR cleanup and insurance follow-up.

Request a free practice analysis today, and we’ll schedule a time that works for you. Our service goes far beyond processing insurance and vision plan claims, and we work with ANY ophthalmology and optometry EHR or practice management software. We get paid when you get paid.