Accounts receivable (A/R) is the lifeblood of any medical practice’s financial health. However, over time, unpaid or “old” accounts receivable—those claims or patient balances outstanding for 90 days or more—can accumulate, tying up valuable resources and masking the true financial performance of your practice.

Old A/R not only affects cash flow but also increases administrative costs and can lead to write-offs if not addressed promptly. Conducting a thorough old A/R cleanup is essential to identify, prioritize, and recover lost revenue.

In this blog, we’ll discuss why old A/R cleanup matters, common reasons why claims remain unpaid, and actionable strategies to effectively recover outstanding payments.

Why Old A/R Cleanup is Crucial

• Improves cash flow: Recovering outstanding payments increases available working capital.

• Enhances financial reporting: Provides a clearer picture of your practice’s financial health.

• Reduces write-offs: Early intervention can prevent accounts from becoming uncollectible.

• Increases operational efficiency: Identifies billing and collection issues to improve processes.

Common Reasons for Old A/R

• Claim denials or rejections not followed up promptly.

• Incorrect or incomplete patient information.

• Delays in insurance verification or authorization.

• Lack of timely patient billing or follow-up.

• Inefficient denial management processes.

Steps to Clean Up Old A/R and Recover Revenue

1. Run Detailed Aging Reports

• Generate reports categorizing outstanding balances by age (30, 60, 90+ days).

• Focus on the oldest accounts first, prioritizing high-value balances.

2. Verify and Correct Patient and Insurance Information

• Review account details for errors that may delay payment.

• Contact patients and insurers to update information as needed.

3. Follow Up on Denied and Unpaid Claims

• Assign staff to promptly address denials by reviewing reasons and submitting appeals or corrections.

• Resubmit corrected claims quickly to avoid further delays.

4. Communicate Clearly with Patients

• Send patient statements and payment reminders regularly.

• Offer flexible payment plans or assistance for patients struggling with bills.

5. Implement Efficient Denial Management

• Analyze denial patterns to address systemic issues.

• Train staff on best practices to prevent future denials.

6. Consider Outsourcing for Difficult Accounts

• Use collection agencies or revenue cycle management services for accounts that are hard to collect in-house.

• Balance outsourcing costs with potential recovery amounts.

Best Practices to Prevent Old A/R Buildup

• Verify insurance and patient information before services.

• Submit claims promptly and accurately.

• Monitor aging reports regularly.

• Establish a proactive denial management process.

• Educate patients about their financial responsibility upfront.

Conclusion

Old A/R cleanup is an essential task that can unlock significant lost revenue for medical practices. By systematically reviewing and addressing outstanding accounts, practices can improve cash flow, reduce write-offs, and enhance overall financial health. A proactive approach to managing accounts receivable ensures a more stable and profitable future.