What is AR follow-up?
Account receivable (AR) follow-ups are the process of keeping track of and settling unpaid or partially paid medical claims so that insurance companies or patients pay on time.
It means checking the status of a claim, finding problems like delays or mistakes and doing things like fixing them, resubmitting them or following up until payment is made.
In short, AR follow-up helps healthcare providers get paid faster, cut down on delays and improve cash flow.
What is the AR follow-up in RCM?
In revenue cycle management (RCM), AR follow-ups are an important step that takes place after a medical claim is submitted to the insurance company. Its main purpose is to make sure the claim is processed correctly and the provider receives payments without unnecessary delay.
AR follow-up is important because not every claim is paid on time. If no one follows up correctly, some claims may remain unpaid for weeks or even months. AR follow-up helps healthcare providers get paid faster, lower their outstanding balances and keep their cash flow healthy by keeping an eye on and fixing these problems.
This process involves checking on the status of claims on a regular basis, getting in touch with payers to find out if the claims have been approved, denied or rejected and then acting on the response. The AR team works to fix and resolve any problems, like missing information, coding mistakes or reason for delay. If they need to they can send in more paperwork, resubmit the claim or start an appeal.
In short, AR follow-up in RCM ensures that submitted claims do not go unpaid and that every valid claim is on its way to being paid.
In short, AR follow-up in RCM ensures that submitted claims do not go unpaid and that every valid claim is on its way to being paid.
What is the difference between AR follow-up and denial management?
| Scope | AR follow-up | Denial Management |
|---|---|---|
| Objective | Recover outstanding payments | Address and fix denied claims |
| Scope | Covers all unpaid and pending claims | Focuses only on denied claims |
| Timing | Continuous process after submission | Starts after a denial occurs |
| Method | Regular tracking and payer follow-up | Root cause analysis and correction |
| Outcome | Improve cash collections | Reduce future denial rates |
What are the steps in the AR follow-up process?
Review AR aging report- Identify unpaid or underpaid claims.
- Check claim status with payer
- Find root cause
- Take action
- Follow up regularly
- Post payment and close claim
Review AR aging report
To find out how long claims have been pending, look at the AR aging report. It has groups for 0-30 days, 31-60 days and 90 days or more. This helps put older claims that need immediate attention at the top of the list.
Identify unpaid or underpaid claims
Find unpaid or partially paid claims. Sort them by how much they owe and how much they have paid. This helps you focus on accounts that need your attention right away.
Check claims status with payer
Check with the insurance company to see what the current claims status is. Use payer portals, clearinghouses or phone calls to get updates. This tells you if the claim is still pending has been denied or has been processed.
Find root cause
Find out why the payment is late or hasn’t come yet. Reasons could be denial, mistakes or missing information. Knowing what caused the problem helps you fix it the right way.
Take action
If you need to correct any mistakes, please update the claim details. Send the necessary papers or resubmit the claim. If you are denied, become ready to file an appeal.
Follow up regularly
Keep in touch with the payer on a regular basis. Keep an eye on the claim until it moves on to the next step. This procedure stops claims from being put off or forgotten.
Post payment and close claim
After you receive payment, please enter it into the billing system. Please verify that the amount matches your expectations before proceeding. After making sure everything is correct, close the claim.
What are the roles and responsibilities in AR follow-up?
AR executive or specialist
The AR executive is in charge of checking on claims that are still open with insurance companies. They find problems, fix denials or delays and do what needs to be done, like resubmitting or appealing. They also ensure that each claim moves toward payment and update the status of claims in the system.
Team leader or manager
The team lead keeps an eye on the AR team’s overall performance and daily output. They make sure that goals are met and keep an eye on KPIs and help the team with hard cases. They also deal with problems that come up, talk to clients and make the workflow more efficient.
Quality analyst
The quality analyst makes sure that the team’s AR follow-up work is correct. They check calls, notes and claims handling to make sure they are correct and follow the rules. They also find mistakes, keep track of trends and give feedback to help people do better.
What are AR follow-up KPIs?
- Days in AR
- Aging
- Collection rate
- First pass resolution rate
- Denial rate
- Follow-up productivity
Days in AR
Days in AR tells you how long it usually takes to get paid after a claim is billed. A lower AR days count means that collection happens faster and cash flow is better. It is one of the most important ways to judge how well AR is doing.
Aging
Aging shows how long claims have been open in different time periods. It helps the team figure out which claims are new and which ones are getting old. Older aging buckets with higher balances usually mean that follow-up or payment is taking longer
Collection rate
The collection rate shows how much of the expected payment is actually received. The AR team is doing a good job of getting money back if the collection rate is high. It shows how well the billing and follow-up efforts worked overall.
First pass resolution rate
This key performance indicator (KPI) shows how many claims are successfully resolved on the first follow-up attempt. A high first-pass resolution rate means that problems are found and fixed quickly. It also cuts down on work that
Denial rate
The denial rate shows how many claims insurance companies turned down. A lower denial rate means that claims are more accurate and payments are less likely to be late. It helps find problems with billing, coding or paperwork.
Follow-up productivity
This tells you how many claims an AR executive deals with in a day. It helps keep an eye on how productive and efficient employees are. The team is doing a good job of managing AR if they get more work done with good quality.
What are the benchmarks for AR follow-up performance?
- Days in AR: Less than 40-45 days
- Collection rate: Greater than 95%
- Denial rate: Less than 5-10%
- Aging: Less than 15%
These benchmarks help measure efficiency and financial health.
What should an AR follow-up workflow look like?
Claim submission
The workflow starts when the healthcare provider sends the claims to the insurance company. The claim must have the right information about the patient, the codes and the billing. Submitting a clean claim lowers the chances of a delay or denial.
Claim enters AR
The claim goes into accounts receivable after it has been submitted and stays there until payment is made. At this point, the claim is still open and needs to be watched. It stays in AR until it is paid off or settled.
AR team reviews aging
The AR team looks at the aging report to find out how long claims have been waiting. This helps them identify accounts that are past due and figure out which claims need more work. Regular reviews keep the AR process on track and organized.
Prioritize high value
Claims with higher value or older aging are usually handled first. This helps recover larger payments and prevents older claims from becoming difficult to collect. Prioritizing improves collection efficiency.
Contact payer
The AR team calls the insurance company to find out how the claim is going and how much they owe. For this follow-up, they might use payment portals, emails or phone calls. This step helps you figure out if a claim is still open, denied or being worked on.
Resolve issue
The team finds out what went wrong and fixes it if there are any problems. They can fix mistakes, send in new claims, submit papers or file appeals. The goal is to get rid of the problem and move the claim closer to payment.
Payment posting
The billing system accurately records the received payments. The team checks the amount to ensure that it matches what they expect to receive back. If there was an underpayment or a mismatch, you may need to look into it further.
Reporting & analysis
The team makes reports to keep track of AR performance after claims are settled. They look at trends like delays, denials, collections and aging. This process helps make follow-up better in the future and the whole revenue cycle will work better.
How do you prioritize AR accounts for follow-up?
High-value claims
Claims with higher payment amounts should be handled first. Getting these back quickly brings in more money for the provider. It has a direct effect on improving cash flow.
Older claims
Claims that have been open for more than 60 days need to be looked at right away. Claims that have been around longer are more likely to be denied or written off. Following up early helps keep money from being lost.
Denied or rejected claims
Claims that have been denied or rejected need to be fixed and acted on right away. If not fixed quickly, they could miss the deadlines for resubmission or appeal. Fixing them early makes it more likely that you will get paid.
Claims nearing timely filing limits
Every payer has a due date for submitting or resubmitting claims. Claims that are close to this limit should be given priority in order to avoid being denied. If you miss the deadline, you could lose money for an extended period
Payers with fast turnaround
Some insurance companies handle claims more quickly than others. Paying attention to these payers makes it easier to get payments. This makes cash flow better overall and lowers AR days.
How do you reduce AR days and improve cash collections?
Submitting clean claims
Ensure all claims are accurate with correct coding and patient details. Clean claims reduce rejections and speed up payment processing. This helps avoid unnecessary delays in collections.
Verifying insurance before service
Verifying patient insurance eligibility and coverage before treatment. This prevents claim denials due to inactive or incorrect insurance. It ensures smoother billing and faster reimbursement.
Automate tracking and reminders
Use software or tools to track claim status and set follow-up reminders. Automation reduces manual work and ensures no claim is missed. It improves efficiency and speeds up collections.
Follow up regularly
Consistent follow-up helps track claim progress and avoid delays. Regular contact with payers ensures issues are identified early. This keeps claims moving and reduces AR days.
Analyze denial trends
Review common denial reasons and identify patterns. Fixing root causes helps prevent repeated denials. This improves the claim success rate and increases collections.
What tools can help with AR follow-up and collections?
Tools that help in AR follow-up
- RCM software (billing platform)
- Claim tracking tools
- Automation & RPA tools
- Analytics dashboard
- Clearinghouses
RCM software (billing platform)
RCM software lets you handle all of your billing and accounts receivable in one place. It keeps track of claims, payments and patient balances in real time. This makes it easier and more organized to follow up.
Claim tracking tools
These tools help keep track of the status of each claim from when it is filed until it is paid. They let you know about claims that are still open, denied or processed. This helps the AR team act quickly without having to wait.
Automation & RPA tools
Automation tools take care of repetitive tasks like checking on things and sending reminders, which cuts down on the amount of work that needs to be done by hand. RPA can automatically check up on claims. This makes things faster, more accurate and more productive.
Analytics dashboards
Dashboards show real-time data on AR performance and key performance indicators. They help keep an eye on trends like aging, denials and collections. This helps people make better decisions and improve processes
Clearing houses
Clearinghouses connect providers and insurance companies. They check claims for mistakes before sending them to payers. This lowers the number of claims that are turned down and raise the number that are accepted.
How does medical coding impact AR follow-up?
Medical coding directly affects AR follow-up because every claim needs correct codes for diagnosis, procedures and services. The insurance company may deny, reject or delay the claim if the coding is wrong, missing or doesn’t match the paperwork. This makes it harder to follow up and takes longer to get paid.
Incorrect coding leads to:
Denials of claims
One of the most common reasons for claim denials is coding errors. The claim might not be accepted if the payer finds codes that are wrong or don’t match. The AR team has to do more work to fix it and send it back in.
Late payments
Errors in coding can make it take longer to process claims and approve payments. Even small mistakes could cause the claim to be put on hold for review. This makes AR days longer and has an effect on cash flow.
Rework
If the coding is wrong the claim usually has to be fixed and processed again. This means that claims will take longer to check, fix and send back in. It also makes the coding and AR team jobs harder.
Accurate coding errors:
Faster approvals
Correct coding speeds up the acceptance and processing of claims. Claims that are clean and correct are more likely to be approved the first time. This cuts down on delays and speeds up payments.
Fewer follow-up
When claims are coded correctly, there are fewer problems after they are sent in. This cuts down on the need for repeated calls, corrections and status checks. Because of these improvements, the AR team can focus on more important accounts.
Better cash flow
Correct coding ensures timely payments and reduces claim issues. It helps providers get paid faster and lower their outstanding accounts receivable. This makes the cash flow more stable and healthy.
What is the appeal process in AR follow-up?
Identify denial reason
The first thing you need to do is figure out why the payer turned down the claim. This lets the AR team know what needs to be fixed or explained. The appeal may not work if you can’t find the exact reason.
Collect supporting letter
Once you know the reason, please gather all the necessary documents for the appeal. This could include notes, medical records, authorization or claim forms. The appeal is stronger and more convincing when it has the right papers.
Submit within the timeline
Every payer has a date by which appeals must be sent in. To avoid permanent denial, the appeal must be sent in. To avoid payment denial, the appeal must be sent before the deadline. Getting your work in on time is essential for a successful recovery.
Track appeal status
The AR team needs to keep an eye on the appeal after it has been sent in. They look to see if it has been received, is being reviewed or has been approved. Tracking helps you not miss updates or further delays.
Follow up until the resolution is explained.
Submitting the appeal does not end the process. The AR team should keep following up until the claim is fully settled. This makes sure that payment is made or the final decision is made.
Should AR follow-up be outsourced or handled in-house?
In-house AR follow-up means that the company handles the whole process with its own employees. This gives healthcare providers more control over how things work, makes it easier for teams to talk to each other and lets them see claim status and workflow directly. But it also costs more, such as for salaries, training, infrastructure and technology.
If you outsource AR follow-up, on the other hand, you work with a third-party service provider who handles collections and claims follow-up. This method is more cost-efficient, gives you access to experienced professionals, and makes it easy to adjust the number of people working based on the amount of work. But it might give you less direct control and require careful planning with the outside team.
Overall, a lot of healthcare providers choose to outsource so they can work more efficiently, take less time on operations and focus more on patient care while still making money.
Where can you find reliable AR follow-up services?
Look for vendors with:
-
Healthcare RCM expertise
- Strong track record
- HIPAA compliance
- Skilled AR teams
- Transparent reporting
Choosing the right AR follow-up provider helps improve collections and reduce claim issues. A good vendor should have strong RCM expertise, a proven track record, HIPAA compliance, skilled AR teams and transparent reporting.
Rnd OptimizAR offers reliable AR follow-up services with expert teams and strong RCM knowledge. Our experts can help reduce AR days and improve collections efficiently.