Practices should monitor their days in accounts receivable monthly and compare their days with the average days of other practices by specialty.
Days in Receivables Outstanding:
A/R/(last 3 months of gross charges/90) = Days in A/R
Example: 3 months of charges= $927,009; A/R = 567,828
Average charge per day=$927,009/90 or 10,300. (90 days in a 3-month period.)
567,828/10,300=55 days
Specialty normative data is available from the Medical Group Management Association or from Practice Support Resources. Many specialty societies publish it as well.
A practice with 45 days of accounts receivable has 30 days of average charges waiting to be collected. The lower the number of days, the better the practice is doing.
This measure is part of a management set of tools, which should be reviewed monthly to assess how well the staff is doing in collecting accounts receivable. It can have a short-term increase after a month when there were significant charges or a short-term decrease after a month when there were high collections. But, in general, it serves as an excellent early warning system of problems in the collection process.
###
Questions, comments?
If you have questions or comments about this article please contact us. Comments that provide additional related information may be added here by our Editors.
On January 5, 2021, H.R. 7898 was signed into law by President Trump. This new law modifies the HITECH Act such that when an organization experiences a breach, fines and/or penalties may be reduced if (for at least a year) they have instituted “recognized security practices” as defined within the law.
Reporting a CPT code for an evaluation of a patient is based on time and if the patient is a new or established patient. Evaluation and Management codes are different than other codes, it is important to understand how they are used, prior to 2021 they were based on a ...
On November 10, 2020, the American Medical Association (AMA) announced the addition of two new codes which will be used for the new COVID-19 vaccines along with 4 new administration codes to be used when reporting the administration of these vaccines.
Each year the Centers for Medicare & Medicaid Services (CMS) publishes the Star Ratings System Updates for Medicare Advantage (Part C) and Medicare Prescription (Part D). This rating system was developed to help beneficiaries identify and select the health plans that best meet their needs, specifically addressing main issues:
Quality of ...
It is no secret that Medicare and Medicaid are steadily moving towards their goal of value-based health care. Medicare Part C (Medicare Advantage) identifies and rewards payers, and subsequently their providers, for increasing the efficiency and quality of care they provide to Medicare...
