Percentage of A/R over 180 days is a key metric used in healthcare revenue cycle management to measure the percentage of outstanding accounts receivable (A/R) that have been unpaid for more than 180 days. This metric is important because it provides insight into the effectiveness of a healthcare organization's billing and collections processes. A high percentage of A/R over 180 days indicates that the organization is struggling to collect payments from patients and insurance companies, which can lead to cash flow problems and negatively impact the bottom line. On the other hand, a low percentage of A/R over 180 days indicates that the organization is effectively managing its revenue cycle and collecting payments in a timely manner. Healthcare organizations should aim to keep their percentage of A/R over 180 days as low as possible to ensure financial stability and success.
Percentage of A/R over 180 days is calculated by dividing the total amount of accounts receivable (A/R) that are over 180 days old by the total amount of A/R outstanding, and then multiplying the result by 100.
The formula for calculating this metric is: Percentage of A/R over 180 days = (Total A/R over 180 days / Total A/R outstanding) x 100
For example, if a healthcare organization has $1,000,000 in A/R outstanding and $200,000 of that is over 180 days old, the calculation would be: Percentage of A/R over 180 days = ($200,000 / $1,000,000) x 100 = 20%
This means that 20% of the organization's A/R is over 180 days old, which could indicate issues with collections or billing processes that need to be addressed.
Best practices to improve Percentage of A/R over 180 days are:
1. Timely and Accurate Billing: One of the primary reasons for an increase in A/R over 180 days is delayed billing. To avoid this, healthcare providers should ensure that their billing process is timely and accurate. This can be achieved by implementing an efficient billing system that includes regular follow-ups with payers and patients.
2. Denial Management: Denials are a significant contributor to an increase in A/R over 180 days. Healthcare providers should have a robust denial management process in place to identify and resolve denials quickly. This can be achieved by analyzing the root cause of denials and implementing corrective actions to prevent them from recurring.
3. Patient Collections: Patient collections are an essential aspect of revenue cycle management. Healthcare providers should have a clear patient collection policy in place and communicate it to patients upfront. This can be achieved by providing patients with an estimate of their out-of-pocket expenses and offering payment plans to those who cannot pay in full.
4. Follow-up on Outstanding Claims: Healthcare providers should have a process in place to follow up on outstanding claims regularly. This can be achieved by implementing an automated system that sends reminders to payers and patients for outstanding claims.
5. Staff Training: Staff training is crucial to ensure that the revenue cycle management process is efficient and effective. Healthcare providers should invest in staff training to ensure that their staff is up-to-date with the latest billing and coding regulations.
By implementing these best practices, healthcare providers can improve their Percentage of A/R over 180 days and ensure a healthy revenue cycle.
The industry standard benchmark for Percentage of A/R over 180 days is typically around 10-15%. This means that healthcare organizations aim to keep their A/R over 180 days at or below this 10-15%. A high Percentage of A/R over 180 days can indicate issues with the revenue cycle, such as inefficient billing processes, denied claims, or slow payment from insurance companies. 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 timely follow-up on unpaid claims. By keeping the Percentage of A/R over 180 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 Percentage of A/R over 180 days metric by automating and streamlining the entire revenue cycle process. With the help of advanced analytics and reporting tools, revenue cycle software can identify the root causes of delayed payments and provide actionable insights to improve the collections process.
By automating the billing and collections process, revenue cycle software can reduce the time it takes to submit claims, follow up on denials, and collect payments. This can significantly reduce the number of accounts receivable that are outstanding for more than 180 days, improving the overall health of the revenue cycle.
Additionally, revenue cycle software can provide real-time visibility into the status of outstanding accounts receivable, allowing healthcare providers to prioritize collections efforts and focus on the most critical accounts. This can help reduce the number of accounts that remain outstanding for an extended period, further improving the Percentage of A/R over 180 days metric.
If you're interested in seeing firsthand how revenue cycle software can improve your organization's Percentage of A/R over 180 days metric, we invite you to book a demo with MD Clarity. Our revenue cycle software is designed to help healthcare providers streamline their revenue cycle process, reduce denials, and improve collections. Contact us today to learn more!