Keeping Accounts Receivable Under Control and Ensuring Financial Health
With a 21% increase in Accounts Receivable (AR) trends, is your team preparing for impacts on your organization’s financial health? We’re taking a closer look at aging Accounts Receivable (AR) – a vital indicator often influenced by external factors, rising denial rates, and growing healthcare underpayments. Leveraging revenue cycle analytics and modern healthcare analytics software can help you spot issues early and accelerate healthcare revenue recovery.
Year-over-Year Changes
The average number of AR days over 90 days is at 77%, which is a 21% increase from 2024. This upward trend highlights a growing backlog, driven largely by payers taking longer to process payments, and an increase in denial rates. It’s crucial to monitor these shifts with near–real-time RCM analytics and Business Intelligence, Analytics, and AI dashboards, as they directly impact cash flow and operational efficiency.
The Big Question—How much is this impacting you?
Staying proactive is more important than ever. If AR is aging beyond 90 days, your business could face significant challenges, ranging from cash flow disruptions to operational bottlenecks. Ask yourself the following questions:
- Are we tracking AR>90 rigorously with revenue cycle analytics?
- How much are we losing to increased AR trends and healthcare underpayments?
- Do we need to adjust our staffing, workflow, or technology strategy going forward?
The Challenges Behind Increasing AR
Three primary factors have contributed to the prolonged aging of AR days:
- Increase in Denials: Payers are rejecting claims at a higher rate, leaving hospitals to rework claims and delay reimbursements.
- Longer Days to Pay: Payment timelines have become less predictable, compounding the AR challenges many hospitals are already facing.
- Growing Backlogs: Increased AR days become a cycle, creating a backlog which means it takes longer to get paid.
These patterns point to the need for greater operational rigor and end-to-end tracking across the claims lifecycle using healthcare analytics software.
What Does This Mean for You?
For hospitals, these insights serve as an important wake-up call. Aging AR leads to resource strain, reduced cash flow, and, in some cases, can even jeopardize the overall financial health of the organization. The good news: with the right blend of process, people, and revenue cycle analytics, you can reverse the trend.
How to Take Action
Every challenge comes with a solution. Here are a few ways to address these rising AR trends effectively:
- Identify Root Causes: Examine why denials are increasing—common reasons could include incomplete documentation or coding errors.
- Streamline Claim Processes: Focus on improving the accuracy and completeness of claims the first time around to avoid time delays.
- Enhance Payer Relationships: Regular communication can help you stay ahead of potential delays or process changes on the payer’s end.
- Leverage Data and AI: Deploy healthcare analytics software and business Intelligence, Analytics, and AI to monitor AR in real time, predict recoverability, and prioritize worklists—accelerating healthcare revenue recovery.
By addressing these areas, you not only improve AR but also create a stronger foundation for predictable cash flow and business growth.
