Run your aging report every month in summary and in detail by payer class. A good goal is to have less than 20% of your total accounts receivable 120 days or older. Practices with great accounts receivable policies and procedures can have a lower percentage than this.
Remember, young is good in terms of accounts receivable. The Medical Group Management Association (MGMA) tells us that the older the debt is to the physician practice, the less likely it is for the practice to collect it.
There are a few important points to remember when running your aging report. Make sure you are running it without credit balances. If you have credit balances on your system, it makes it look like you have fewer old accounts. Make sure to run the report by date of service, not by date posted or the date the claim was resubmitted. Some practice management program counts the date of the claim submission as the age of the claim for the aging report. When that happens, resubmitting a claim moves that claim to the current account receivable aging category, making it look like your accounts receivable is younger than it is.
Watch your patient due balances. If you find that your patient due balances are increasing, improve your collection efforts.
Watch your payer classes. If you find that one or two payers are stretching out their payments to you, you want to make sure you know the reason why immediately. Is there a problem with claim submitting? A problem at the clearinghouse? Is the payer slowing down their payments? Is the problem in your practice, with either charge capture or claims submission? Your aging report serves as an early warning system for all of these things.
Norms for your specialty can be purchased either from Practice Support Resources or from the Medical Group Management Association (MGMA). Your specialty society may also be able to help with this.
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.
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