Hospital Accounts Receivable Problems and Solutions

A healthy financial state demands an effective income cycle. The healthcare revenue cycle is crucial to healthcare providers’ capacity to pay physicians, cover costs, and implement required upgrades. When the healthcare revenue cycle is mismanaged, collection efficiency falls, and hospital accounts receivable (AR) days increase.

The revenue cycle entails a wide range of responsibilities, from acquiring insurance and procedural data to creating claims and charging patients. The healthcare revenue cycle is prolonged out needlessly when any of these activities is sluggish or unproductive.

In medical practice, skilled hospital accounts receivable administration can change a negative cash flow into a positive cash flow. Use the tactics mentioned in this blog to keep the hospital accounts receivable process working smoothly.

Is your healthcare organization suffering from insufficient cash flow as a result of ineffective account receivable management?

This is not a new problem; the hospital account receivable issue has long plagued healthcare accounting, limiting hospitals’ objectives and goals. To ensure consistency, the following are some of the most common hospital accounts receivable concerns and solutions:

Denials of Insurance Claims

Denied insurance claims are one of the most common hospital accounts receivable difficulties. According to a March 2011 survey conducted by the United States Government Accountability Office (GAO), healthcare companies can lose up to 10% of potential revenue if their denial management method is inadequate. Every healthcare company, according to the Medical Group Management Association (MGMA), should have a denial rate of 4%.


Each claim form must be thoroughly reviewed by your hospital’s accounts, receivable management team. Specifically, before to filing to meet the standards and keep track of declined claims.

Premature depreciation

Smaller payments are typically not kept by the hospital’s accounts receivable management team. This affects on the hospitals’ balance sheets in the long run. As some patients are willing to pay in installments or work with you to reduce their medical debt.


Before dismissing anything, the team must first authorize and review it. Everything, whether it is more or less, must be noted in the books of accounts. You can ensure that your firm does not go bankrupt in this method.

Debt Issues

Rising outstanding debt has emerged as one of the most significant impediments to hospital accounts receivable management. Previously, the patient’s obligation was restricted to the time of service; however, this is no longer adequate. Throughout the revenue cycle, it is critical to collect debts from patients.


To deliver quality care, your healthcare practitioner must collect all pertinent billing and insurance information and determine the likely out-of-pocket cost. As a result of checking coverage and insurance costs, the patient understands and accepts their responsibilities.

Hospital AR Management Is Insufficient

Improper hospital account receivable management in a medical office can result in a loss, including bad debts and an unpleasant patient experience. Furthermore, you can examine escalating bad debts in your accounting books.


You must reconcile your bank statements carefully to confirm that all transactions are correct and that no entries have been overlooked. This will help you avoid fraud and errors, allowing you to focus on your patients and cure them more effectively.

Missing Employees’ Dedication

Every employee in your company, from doctors to administrative staff, should be enthused about their jobs and understand your company’s mission and goals. If your workforce is not performing correctly or is not taking your goals seriously, your healthcare organization will suffer.


Outsourcing hospital accounts receivable services to a trustworthy firm that is an industry specialist and will work carefully on your demands are the ideal choice. Hiring top-tier administrative personnel is tough and costly. Outsourcing your hospital accounts receivable, on the other hand, gives you access to cutting-edge technology and trusted services.

What is the most important learning?

The healthcare system is huge, and juggling between various responsibilities is difficult. The billing and collections operation is one of the most critical components of running a healthcare business, as hospitals deal with an ever-changing financial context. A declining hospital AR turnover rate and a sluggish AR aging schedule are creating havoc on cash-strapped health organizations.

Whatever path you take during a revenue cycle turnaround attempt, remember that careful planning and giving the necessary resources to achieve optimal performance are the cornerstones to any successful hospital account receivable project.

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