https://www.horizonhealthcarercm.com/wp-content/uploads/2025/06/Denial-Management-KPIs_-What-to-Track-and-Why-It-Matters.jpg 1250 2000 AbstraktMarketing /wp-content/uploads/2022/06/Horizon-Logo.png AbstraktMarketing2025-06-02 16:41:442025-06-05 16:29:08Denial Management KPIs: What to Track and Why It MattersThis article explores the significance of cleaning up old AR in healthcare settings, including what can be written off, what can be rebilled, and the importance of the duration an account has been opened. We will also delve into how a revenue cycle management company like Horizon Healthcare RCM handles write-offs, reviews aged accounts, and addresses old denials.
The Importance of Cleaning Up Old Accounts Receivable
Financial Health
Maintaining clean accounts receivable is essential for the financial health of healthcare organizations. Aged AR can hinder cash flow, impact revenue, and create financial instability. By addressing old accounts, hospitals and healthcare providers can collect the revenue owed to them and maintain a positive bottom line.
Regulatory Compliance
Healthcare organizations must adhere to a myriad of regulations, including those set forth by private insurers and the Centers for Medicare & Medicaid Services (CMS). Failure to clean up old AR can lead to compliance issues, audits, and legal consequences. Thus, staying on top of aged accounts is not just a financial necessity, but also a regulatory requirement.
Improved Revenue Cycle Management
Efficient revenue cycle management is crucial in healthcare. Old AR can clog the revenue cycle, delaying payments and creating inefficient operations. By cleaning up old accounts receivable, healthcare facilities can streamline their revenue cycle processes, improve efficiency, and reduce administrative costs.
What Can Be Written Off
Uncollectible Debts
Not all accounts receivable can be fully collected. Some debts become uncollectible for various reasons, including patients’ inability to pay or disputes over charges. Healthcare organizations must identify and write off these uncollectible debts to maintain accurate financial records.
Insurance Denials
Insurance denials are common in healthcare. When an insurance company denies a claim, the healthcare facility may need to write off the portion of the bill that is not covered. However, diligent efforts should be made to appeal denials and recoup as much revenue as possible.
What Hospitals Can Rebill
Correctable Errors
Some aged AR may result from correctable errors such as coding mistakes, incomplete documentation, or billing inaccuracies. These errors can often be corrected, and the claim can be rebilled to insurance providers. By identifying and addressing these errors, healthcare facilities recover revenue that might otherwise be lost.
Resubmission of Claims
In cases where claims were initially denied or rejected due to administrative issues or missing information, healthcare organizations can resubmit corrected claims to insurance companies. This process helps recover revenue that was initially lost.
Denied claims are a real challenge for healthcare organizations. Learn how to follow up and recover payments to ensure revenue and avoid patient care issues.
The Importance of Account Lifespan
Aging Buckets
Accounts receivable aging is a method used to categorize accounts based on how long they have been open or outstanding. Typically, aging buckets are divided into 0–30 days, 31–60 days, 61–90 days, and 91+ days. The longer an account remains open, the less likely it is to be fully collected. Therefore, healthcare organizations need to prioritize accounts in the older aging buckets.
Early Intervention
Early intervention is crucial in AR management. Promptly addressing outstanding accounts increases the likelihood of full payment. As accounts age, their collectability decreases, making it imperative to take action as soon as possible to recover revenue.
How We Handle Accounting Clean-Up
At Horizon Healthcare RCM, we understand the significance of cleaning up old AR in healthcare settings. We employ several key practices to manage accounts receivable effectively:
- Regular Reviews – Horizon Healthcare RCM conducts periodic reviews of aged accounts receivable to identify uncollectible debts, correctable errors, and opportunities for rebilling. These reviews are crucial in maintaining financial stability and regulatory compliance.
- Data Analytics – We use advanced data analytics to identify trends in aged AR. This data-driven approach allows us to make informed decisions on which accounts to write off, which to rebill, and which to appeal.
- Denial Management – Horizon Healthcare RCM has a robust denial management process in place. We work diligently to appeal insurance denials and recover as much revenue as possible. This proactive approach ensures that denied claims are not written off without a fight.
- Efficient Workflow – Efficiency is at the core of our AR management strategy. We streamline processes to minimize administrative costs and maximize revenue recovery. This includes automated follow-up on unpaid claims and timely resubmission of corrected claims.
Key Takeaways
- Cleaning up old accounts receivable is vital for financial management in hospitals and healthcare settings, ensuring financial stability, regulatory compliance, and efficient revenue cycle management.
- While some accounts may need to be written off as uncollectible, others can be rebilled or appealed to recover lost revenue.
- The duration an account has been open plays a crucial role in its collectability, making early intervention essential.
Clean Up Your AR With Horizon Healthcare RCM
As a leading revenue cycle management company, Horizon Healthcare RCM exemplifies best practices in handling accounting clean-up. Our regular reviews, data analytics, denial management, and efficient workflows enable us to navigate the complex landscape of AR management.
For healthcare professionals and revenue cycle managers, the importance of cleaning up old accounts receivable cannot be overstated. It is not only a financial imperative, but a regulatory necessity to ensure the success of healthcare organizations in an ever-evolving industry.
Connect with Horizon Healthcare today to learn more about our above-and-beyond AR solutions.
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