A/R Aging

A/R Aging is a metric used in healthcare revenue cycle management to track the age of outstanding accounts receivable. It is a report that categorizes outstanding invoices by the length of time they have been unpaid, typically in 30-day increments. The report helps healthcare organizations identify which accounts are overdue and how long they have been outstanding. This information is critical for managing cash flow, identifying trends in payment patterns, and prioritizing collections efforts. A/R Aging is an essential tool for healthcare organizations to monitor the health of their revenue cycle and ensure timely payment of outstanding invoices.

A/R Aging is calculated by analyzing the outstanding accounts receivable (A/R) balances based on the length of time they have been outstanding. This metric is used to measure the effectiveness of a healthcare organization's billing and collections processes.

To calculate A/R Aging, the A/R balances are typically divided into different aging buckets based on the number of days since the date of service. The most common aging buckets are 0-30 days, 31-60 days, 61-90 days, and over 90 days. Once the A/R balances are divided into aging buckets, the total amount of outstanding A/R in each bucket is calculated. This information is then used to calculate the percentage of A/R that is current (0-30 days), past due (31-60 days, 61-90 days, and over 90 days), and the overall percentage of A/R that is outstanding. A/R Aging is an important metric for healthcare organizations to monitor as it provides insight into the effectiveness of their billing and collections processes. By tracking A/R Aging over time, organizations can identify trends and areas for improvement in their revenue cycle management processes.

Best practices to improve A/R Aging are:

1. Timely and Accurate Billing: One of the most important factors in reducing A/R aging is to ensure that billing is done accurately and in a timely manner. This includes verifying patient insurance information, coding claims correctly, and submitting claims promptly.

2. Denial Management: Denials can significantly impact A/R aging. It is important to have a robust denial management process in place to identify the root cause of denials and take corrective action to prevent them from happening in the future.

3. Follow-up on Outstanding Claims: Regular follow-up on outstanding claims is crucial to reducing A/R aging. This includes tracking claims that have been denied or rejected and resubmitting them promptly.

4. Patient Collections: Collecting patient payments at the time of service or shortly after can help reduce A/R aging. This can be done through various methods such as offering payment plans, accepting credit card payments, or sending patient statements.

5. Analyze A/R Aging Reports: Regularly analyzing A/R aging reports can help identify trends and areas for improvement. This includes identifying high-risk accounts, tracking payment trends, and monitoring the effectiveness of the billing and collections process.

6. Staff Training: Providing staff with regular training on billing and collections processes can help improve accuracy and efficiency, which can ultimately reduce A/R aging.

7. Utilize Technology: Utilizing technology like revenue cycle management software can help automate processes, reduce errors, and improve efficiency, which can ultimately lead to a reduction in A/R aging.By implementing these best practices, healthcare organizations can improve their A/R aging and ultimately improve their revenue cycle management.

The industry standard benchmark for A/R Aging is 30 days. This means that healthcare providers should aim to collect payment for services rendered within 30 days of the date of service. A/R Aging is typically broken down into four categories: 0-30 days, 31-60 days, 61-90 days, and over 90 days. The goal is to have the majority of accounts receivable fall within the 0-30 day category.A high A/R Aging metric can indicate issues with billing and collections processes, such as incorrect coding, denied claims, or slow follow-up on outstanding balances. It can also lead to cash flow problems for healthcare providers, as they may have to wait longer to receive payment for services rendered.To improve A/R Aging, healthcare providers can implement strategies such as improving coding accuracy, streamlining the claims submission process, and implementing a proactive collections process. By monitoring and improving A/R Aging, healthcare providers can ensure timely payment for services rendered and maintain a healthy revenue cycle.

Revenue cycle software can significantly improve the A/R Aging metric by automating the billing and collections process, reducing errors, and improving efficiency. With the help of revenue cycle software, healthcare providers can easily track and manage their accounts receivable aging, identify overdue accounts, and take appropriate actions to collect payments.MD Clarity's revenue cycle software is designed to streamline the billing and collections process, reduce denials, and improve cash flow. Our software automates the entire revenue cycle process, from patient registration to payment posting, and provides real-time visibility into the status of each account. If you're looking to improve your A/R Aging metric and optimize your revenue cycle management, we invite you to book a demo with MD Clarity. Our team of experts will show you firsthand how our revenue cycle software can help you streamline your operations, reduce costs, and improve your bottom line. Contact us today to schedule your demo!