Percent of A/R over 90 days is a key metric used in healthcare revenue cycle management to measure the percentage of outstanding accounts receivable (A/R) that are over 90 days old. This metric is important because it provides insight into the effectiveness of the organization's billing and collections processes. A high percentage of A/R over 90 days indicates that the organization is struggling to collect payments in a timely manner, which can lead to cash flow issues and negatively impact the bottom line. On the other hand, a low percentage of A/R over 90 days indicates that the organization is effectively managing its revenue cycle and collecting payments in a timely manner. This metric is often used in conjunction with other RCM metrics to provide a comprehensive view of the organization's financial health.
Percent of A/R over 90 days is calculated by dividing the total amount of accounts receivable (A/R) that is over 90 days old by the total amount of A/R outstanding, and then multiplying the result by 100 to get a percentage.
The formula for calculating this metric is:
(Total A/R over 90 days / Total A/R outstanding) x 100
For example, if a healthcare organization has $500,000 in A/R outstanding and $100,000 of that is over 90 days old, the calculation would be:
($100,000 / $500,000) x 100 = 20%
This means that 20% of the organization's A/R is over 90 days old, which could indicate issues with collections or denials management. It is important to monitor this metric regularly and take action to address any underlying issues that may be contributing to a high percentage of A/R over 90 days.
Best practices to improve Percent of A/R over 90 days are:
1. Timely and Accurate Billing: One of the primary reasons for an increase in A/R over 90 days is delayed or inaccurate billing. To improve this metric, healthcare providers should ensure that their billing processes are streamlined, and bills are sent out promptly and accurately.
2. Effective Denial Management: Denied claims can significantly impact the A/R over 90 days. Healthcare providers should have a robust denial management process in place to identify and resolve denied claims quickly. This can include regular monitoring of denied claims, identifying the root cause of denials, and implementing corrective actions.
3. Patient Collections: Collecting patient payments is crucial to reducing A/R over 90 days. Healthcare providers should have a clear patient collections policy in place, which includes communicating payment expectations upfront, offering payment plans, and following up with patients who have outstanding balances.
4. Regular A/R Aging Analysis: Regularly analyzing the A/R aging report can help healthcare providers identify trends and potential issues that may be contributing to an increase in A/R over 90 days. This analysis can help providers identify areas for improvement and implement corrective actions.
5. Staff Training and Education: Staff training and education are critical to improving A/R over 90 days. Healthcare providers should ensure that their staff is trained on billing and collections best practices, including effective communication with patients, accurate coding, and timely claim submission.
By implementing these best practices, healthcare providers can improve their Percent of A/R over 90 days, which can lead to improved cash flow and financial stability.
The industry standard benchmark for Percent of A/R over 90 days is typically around 10-15%. This means that healthcare organizations aim to keep their A/R over 90 days at or below this percentage. A high percentage of A/R over 90 days can indicate issues with the revenue cycle, such as inefficient billing processes, denied claims, or slow payment from insurance companies or patients. It can also lead to cash flow problems and negatively impact the financial health of the organization. To improve this metric, healthcare organizations can implement strategies such as improving billing processes, reducing claim denials, and implementing effective follow-up procedures for unpaid claims. By keeping the Percent of A/R over 90 days at or below the industry benchmark, healthcare organizations can ensure a healthy revenue cycle and financial stability.
Revenue cycle software can significantly improve the Percent of A/R over 90 days metric by streamlining the billing and collections process. With the help of revenue cycle software, healthcare providers can automate their billing processes, which reduces the chances of errors and delays in the billing process. This, in turn, helps in reducing the number of unpaid claims that are over 90 days old.
Revenue cycle software also helps in identifying the root cause of delayed payments and denials. By analyzing the data, healthcare providers can identify the areas that need improvement and take corrective actions to reduce the number of claims that are over 90 days old.Moreover, revenue cycle software provides real-time visibility into the billing and collections process, which helps in identifying the bottlenecks and taking corrective actions in real-time. This helps in reducing the number of claims that are over 90 days old and improving the overall revenue cycle management process.
If you want to see firsthand how revenue cycle software can improve the Percent of A/R over 90 days metric, book a demo with MD Clarity's revenue cycle software. Our software is designed to streamline the billing and collections process, reduce the number of unpaid claims, and improve the overall revenue cycle management process. Book a demo today and see how our software can help you improve your revenue cycle metrics.