Bring more money into your practice with aging reports

Aging reports confuse a lot of our providers.

At their core, aging reports are pretty simple. It’s essentially a report of all the money you’re owed and how long you’ve been waiting for it.

But the term “aging” is misleading. Aging reports give us the age of claims from the date they were submitted. So as soon as you submit a claim, the clock starts ticking.

So if I submitted a claim this morning and generate an aging report this afternoon, that claim will be listed on my aging report…even though technically it hasn’t aged!

This is just one of the reasons that aging reports aren’t as straightforward as they seem. How long is “too long” for claims to have aged? How much should you aim for in each of your aging buckets? And what do you actually do with the information in your aging repobucket-1643406_1280rts?

Read on for the answers:

How much should you have in each aging bucket?

Most aging reports break outstanding collections into four categories:

0-30 days: This bucket contains all current outstanding collections. You want this to be the largest of your buckets because it takes time for insurance companies to pay your claims. Aim for 50-60% of your claims to be in this bucket. (At IPS, we aim for 60%.)

31-60 days: The second bucket shows the outstanding payments that are most likely overdue or will soon be overdue. It really depends on how quickly your revenue process moves. We aim to have 25% of outstanding payments in this bucket. That’s more stringent than the industry standard, but you want to be tighter than what everyone else is doing.

61-90 days: Items in this bucket are unpaid bills that were submitted two to three months ago. We aim for about 10% in this bucket.

90+ days: Some aging reports will split this up into 91-120 days and 120+ days. But after 90 days, claims are very overdue and require immediate attention. You want less than 5% of your collections to be in this bucket.

When should you pull your aging reports?

It’s best to generate your aging reports as soon as you close the month and balance the books. Record all payments, making sure you’ve posted every single dime that hit the bank or the office for the month, before you pull the report.

That way, you know all of the money to satisfy your claims is accounted for. You don’t want to have money that you’ve already been paid sitting on your desk or in the ERA processing system. That will throw off your aging reports by including claims that have technically already been paid.

Closing your month before you pull the reports ultimately allows you to get a cleaner number when you generate your report.

Okay, Jasmine. I know how much is in each of my buckets. But what do I do with that information?

Your practice is a business, at the end of the day. And businesses need to be profitable to survive! This is why your aging reports are so valuable — they show where you are leaking potential revenue.

The reality of the healthcare system is that there will always be claims that are overdue. But you can counteract this by having your team keep on top of your overdue claims. This is so important because as we know, payments can easily slip through the cracks.

I always recommend that billing departments focus on the oldest aging buckets first. We don’t want to waste your front desk’s time by calling insurance companies about claims that were going to be paid the next day anyway. If you see your staff members spending 90% of their time on current production (the 0-30 day bucket) it’s a waste. Someone’s investing their time on something that’s a natural part of the process.

It’s much more productive to have your team follow up on claims in the 61-90 or 90+ buckets. These are the claims that have likely slipped through the cracks, whereas those in the 0-30 and 31-60 buckets are simply claims that are being processed. cash-1462856_1280

Aging reports help you to have a goal, a standard that you’re going to achieve. Select goal numbers to aim for and use your team to help you reach those goals, to ultimately make your practice more profitable.

Do you regularly pull your aging buckets reports? How do your numbers line up with the ones I suggest? Does your team have a good process for following up on overdue claims? Share your thoughts in the comments!

If your aging buckets are all out of whack (it happens!) let’s talk. We’ll take an in-depth look at your can of worms, decipher where problems are occurring, and provide a detailed plan to fix the problem(s) quickly and efficiently…so you can start getting paid on time.

As outside consultants, we don’t have any preconceived notions of your practice. So we can look at your team and systems objectively and provide a non-biased report of what’s working…and what’s not. In a few hours, we’ll hand you a detailed plan to improve your AR systems to regularly bring more revenue into your practice.

Click here to learn more and schedule a call with us.


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