Effective accounts receivable follow-up is one of the most important functions within the healthcare revenue cycle. A structured accounts receivable (A/R) not only ensures financial health but also enhances patient satisfaction. A structured A/R follow up process helps healthcare organizations reduce aging accounts, improve cash flow, resolve claim denials faster, and maximize reimbursement. When A/R is managed efficiently, organizations are better positioned to protect financial performance while supporting a smoother patient financial experience.
In our recent webinar, Revolutionizing Revenue: Best Practices for Assertive Accounts Receivable Follow-Up we partnered with Health Connect America to provide a deep dive into best practices for healthcare organizations to optimize their A/R processes and, by extension, transform their revenue cycle strategies and performance. The discussion highlighted how proactive denial prevention, data-driven workflows, payer-specific follow-up strategies, and automation can help providers accelerate collections and improve long-term financial outcomes.
Proactive Denial Prevention and Management?
Understanding the common reasons for denials and implementing a proactive approach can significantly reduce revenue leakage, minimizing losses and increasing revenue. This involves a comprehensive analysis of denial patterns, identifying the root causes to address them at the source, and implementing quality control measures.
Key areas of focus for preventing patient access-related denials include:
- Integrity of pre-registration and registration data. Reducing missing information, incorrect member ID, provider or payer information
- Orders, authorizations, and pre-certification. These denials can be reduced through order intake and securing authorization prior to the procedure.
- Eligibility verification. Ensure all scheduled patients’ insurance is verified before the visit and non-scheduled appointments are verified prior to discharge.
- Benefit plan coverage. Ensure the visit or procedure is verified at the time of insurance verification and confirm the patient’s benefits are not exhausted.
- ABN/Medical Necessity. Ensure proper patient signatures are obtained and information is scanned at the patient account level.
An effective denial prevention and management program is multifaceted and should include establishing a governance program led by senior executive leadership and involving collaboration among key stakeholders from various departments including patient access, health information management, and billing. By defining clear roles and responsibilities within a denial prevention program, healthcare organizations can implement a comprehensive approach that ensures accountability and commitment across all levels, fostering a culture of continuous improvement and significantly reducing the likelihood of denied claims.
What A/R Metrics Should Healthcare Organizations Track?
By closely monitoring and evaluating data and metrics, healthcare organizations can identify trends and patterns in revenue cycle performance to make informed decisions for ongoing improvement, ensure a more efficient resolution process, and enhance overall effectiveness. Analyzing key performance indicators (KPI) and data for root causes enables organizations to develop strategic solutions that effectively address issues at their source and prevent future issues.
Denial Metrics KPIs | Formulas |
| Initial denial rate (as a % of volume and $'s) |
|
| Primary denial rate | Total number of zero remits posted in past 4 weeks/total number of remits for primary payers only in past 4 weeks* |
| Denial write-offs as a percent of net patient revenue | Net $'s written off as denials/Average Monthly net patient revenue |
| Time from initial denial to appeal | Count the number of days from date of initial denial remittance until appeal submission date |
| Time from initial denial to claim resolution | Count the number of days from date of initial denial remittance until claim resolution (zero balance with or without payment) |
| Percentage of initial denials overturned | Initial denials overturned and paid/total initial denial dollars paid and adjusted (gross charges) |
*payments and zero paid, excluding duplicates (Source: HFMA Education)
What Is Accounts Receivable Follow-Up?
Accounts receivable follow-up is the process of monitoring and pursuing unpaid insurance claims and patient balances to ensure timely reimbursement. An effective A/R follow up strategy includes reviewing claim status, identifying payment delays, resolving denials, submitting appeals, and communicating with payers to accelerate payment resolution. Consistent follow-up reduces outstanding receivables, improves cash collections, and strengthens financial performance.
Accounts Receivable Best Practices
Effective accounts receivable follow-up starts with prioritization. Rather than working accounts in the order they appear, revenue cycle teams should use payer behavior, balance size, aging category, denial status, and likelihood of payment to determine which accounts need immediate action. This makes A/R follow up more strategic and helps teams focus effort where it can produce the greatest financial impact. Best practices include:
- Track the number and dollars for specific third-party payers, how late they are paying, and which payers are accurately reimbursing your organization.
- Sort A/R aging – large to small balances, to provide quick analysis of unworked accounts.
- Identify trends where outstanding balance is equal to health plan’s co-pay amounts – identifies lack of pre-service or time of service collection of copays.
- Segment unworked vs. worked/paid accounts to accelerate cash.
- Specialize workflow by payer.
- Identify bulk trends to resolve large groups of accounts or appeals.
- Measure "accounts resolved" instead of “accounts touched,” and establish resolution criteria in your workflow system.
- Don’t work accounts one by one with no strategy.
Achieving Your Accounts Receivable Goals
Creating a culture of collaboration between internal teams and external vendors who are an extension of the team can foster a more cohesive approach to achieving A/R objectives. This not only improves communication and collective problem-solving but also leverages the strengths of all parties involved, leading to improved outcomes and a more streamlined A/R process.
How do Segmentation and Automation Strengthen Accounts Receivable Follow-Up?
A strong accounts receivable follow-up strategy also depends on clear segmentation. By separating accounts by payer, denial type, aging bucket, balance, and work status, organizations can route each account to the right workflow and reduce low-value manual touches. Automation can support this process by identifying accounts that need human intervention, surfacing payer trends, and helping teams resolve larger account populations more efficiently.
Data to evaluate and segment includes:
- 837 claims
- 835 remittances/denials
- 277 claim status
- Electronic Health Record (EHR) charges and adjustments
- Financial class
With this model, staff work the ending account inventory that need resolution. Leveraging technology in the segmentation process and automating certain aspects can significantly increase efficiency and accuracy while reducing the time and resources spent on manual follow-ups. This technology-driven approach allows healthcare organizations to focus strategically on areas that require human expertise and intervention.
Why Does Accounts Receivable Follow-Up Matter to Revenue Cycle Performance?
Revolutionizing revenue through assertive accounts receivable follow-up is a comprehensive process requiring management and prevention strategies, strong leadership, collaborative partnerships, and data-driven decision-making. By focusing on denial prevention, strengthening A/R follow up workflows, embracing collaboration, and implementing strategic action plans, healthcare organizations can optimize their revenue cycles and achieve their financial goals.
For more insights, check out the webinar, Revolutionizing Revenue: Best Practices for Assertive Accounts Receivable Follow-Up for strategies that can transform the way healthcare organizations handle their revenue processes to improve financial stability and increase patient satisfaction.
Debra Stall, CRCR
