https://www.horizonhealthcarercm.com/wp-content/uploads/2025/05/The-Cost-of-Claims-Denials-and-How-They-Impact-Your-Revenue-Cycle.jpg 1250 2000 AbstraktMarketing /wp-content/uploads/2022/06/Horizon-Logo.png AbstraktMarketing2025-05-01 15:42:192025-05-14 16:36:22The Cost of Claims Denials and How They Impact Your Revenue CycleThe Importance of Collecting Unpaid Medical Debts
When medical claims remain open for an extended period of time, it can negatively impact the financial performance of your practice. Unpaid claims lead to decreased cash flow, which can delay payments to suppliers and employees. Open claims also reduce your net collection rate and increase your practice’s write-offs, making it challenging to maintain your bottom line. Because of this, it’s essential that you take steps to improve your revenue cycle management and avoid open, unpaid claims.
Net Collection Rate: Your Essential Financial Benchmark
Net collection rate is one of the most important metrics that healthcare providers need to track. It measures how much money your practice has collected after deductibles and other adjustments have been applied to each claim. By tracking your net collection rate over time, you can better understand your practice’s financial well-being. Analyzing your net collection rate also helps uncover inefficiencies in your medical billing process and shows you whether your healthcare debt collections cover your costs.
The Danger of Write-Offs
Write-offs typically occur when the amount collected for a claim is lower than the contractually agreed-upon rate or when a provider doesn’t have the necessary information required to receive reimbursement on a low-value claim. Although these discrepancies should normally be recorded as unpaid medical debt, some providers choose instead to record them as charitable allowances or small balance write-offs. Over time, these write-offs add up, and it becomes clear how much money your practice is missing out on. Because of this, it’s best to develop a revenue cycle management strategy that avoids write-offs and encourages accuracy and accountability.
If your practice struggles to maintain a healthy net collection rate and avoid write-offs, Horizon Healthcare can help. Explore our comprehensive revenue cycle management services and discover how we can support your practice today.
Improving Your Healthcare AR Recovery Rate
Managing claims and improving your medical AR recovery rate doesn’t have to be a hassle. Here are five actionable ways to optimize cash flow and reduce the frustration of medical AR recovery.
1. Keep patients informed of their financial responsibilities.
Many patients struggle to navigate the healthcare industry, finding it confusing and frustrating. Medical finances are no different—many patients don’t have a clear understanding of how healthcare and insurance providers collect payments, and they may be unaware of their financial obligations. As a healthcare provider, this can make it challenging to maintain your revenue cycle and financial stability.
Fortunately, you can combat confusion by clearly outlining your patient’s payment responsibilities before they receive your care services. You can provide a brochure or reference sheet that summarizes expectations, such as when they need to pay for their services. You can also keep a medical billing advisor on staff to provide financial expertise and answer your patients’ payment questions.
2. Implement front-end point-of-service healthcare debt collection.
One of the easiest ways to improve your practice’s financial stability is to collect all copayments and deductibles at the initial point of service. This allows your patients to leave your office without any outstanding bills and saves you the hassle of collecting payments later—it’s a win-win situation for both parties.
To make front-end point-of-service collection go even smoother, consider setting up automated appointment reminders that let your patients know that payment is expected at the time of service. If your patient cannot cover the cost of your services, you can reschedule the appointment for a later date or discuss other payment options.
3. Offer payment options to reduce the burden of unpaid medical debt.
Another effective medical AR recovery strategy is to offer installment or early-out self-pay plans. In the past few years, healthcare costs have increased substantially, making it difficult for many patients to receive quality care without breaking the bank. These alternative payment options allow your patients to pay off their medical debts over a period of time without sacrificing their health or quality of care.
You can also offer several payment options to improve accessibility. Many patients are accustomed to having access to online portals or mobile apps to pay for care services. Incorporating these payment options into your practice makes it easier for them to pay and reduces your need to hound them down the line.
4. Take the time to submit clean claims.
One of the best ways to improve your medical AR recovery rate is to submit clean, accurate claims in the first place. Clean claims help you avoid claims denials, delays, and partial reimbursements, which can negatively impact your revenue cycle management. A clean claim contains all of the following information and is submitted within the proper filing window:
- Correct current procedural terminology (CPT) codes that are not outdated or deleted
- No issues regarding the medical necessity of services rendered
- Proper insurance coverage (patient’s insurance was in effect at the date of service and covers the services provided)
- All personal health information (PHI), such as name, address, and date of birth, is correct and in the proper field
- All payer information, such as ID number, group number, and mailing address, is accurate and in the right field
5. Utilize AR follow-up in medical billing.
Unfortunately, not every claim is going to be a clean claim. In these situations, you can protect your revenue cycle management with a strategic AR follow-up plan. AR follow-up in medical billing allows you to reopen and address denied claims promptly and professionally so that you can receive maximum reimbursement from insurance providers. This medical AR recovery strategy is essential for maintaining financial stability.
Partner With a Leading Revenue Cycle Management Provider
The best way to recover unpaid medical claims is to partner with a revenue cycle management partner like Horizon Healthcare. We’ve been working in the healthcare industry for a long time—we know what it takes to develop an effective medical AR recovery plan that maximizes reimbursements and significantly reduces unpaid claims. We’re here to help you optimize your cash flow so you can focus on providing expert care to your patients.
Contact us today to learn more about our comprehensive revenue cycle management services.
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