Discover strategies to improve accounts receivable in medical billing and how BillFlash can help transform your practice's revenue cycle.
The financial stability of medical practices depends on efficient accounts receivable in medical billing. Prolonged A/R cycles—when the time between delivering care and collecting payments stretches too long—can strain cash flow, disrupt operations, and inflate administrative costs. With 56% of medical groups reporting increased time spent on A/R management in 2022 and providers writing off $17.4 billion in bad debt in 2023, the urgency to streamline accounts receivable in medical billing has never been greater.
The good news is that automation, patient-centric tools, and strategic workflows help practices accelerate collections, reduce bad debt, and achieve predictable revenue without adding staff.
The Cost of Long A/R Cycles in Medical Practices
Long accounts receivable cycles are more than inconvenient—they can significantly impact a practice's bottom line. These long cycles create a domino effect of challenges for medical practices, with previous studies showing that 40% of providers fail to collect over $31,713 a year from patients. Unpaid patient balances for weeks or months extend accounts receivable days in medical billing, directly harming a practice's financial stability.
Top-performing practices keep A/R under 35 days, while average practices typically have A/R between 35 and 50 days. When reimbursements go past 50 days—a benchmark that signals poor performance and a need for improvement—medical practices face financial shortages that jeopardize staffing and patient care quality. This level of unpredictability can quickly undermine confidence in long-term investments, such as expanding services or adopting new treatments.
So, the longer patient payments linger, the harder it becomes to forecast income. Compounding these challenges are the hidden costs of manual follow-ups and administrative rework. Approximately 30% of medical practice income is lost due to improper follow-up, missed charges, or other inefficiencies in revenue cycle management. Manual processes slow cash flow, drain staff time and resources, and put additional strain on the practice's operations and profitability.
5 Proven Ways to Reduce Days in Accounts Receivable (A/R) in Medical Billing
1. Automate Patient Billing & Payment Reminders
Manual processes are the Achilles' heel of accounts receivable in medical billing management. Transitioning to automated billing and payment reminder systems can significantly reduce days in A/R by improving payment timeliness. Automated payment reminders eliminate manual follow-ups by sending patients timely, consistent notifications via text and email.
Text messages are a highly effective tool for accelerating payments, with a 98% open rate and an average read time of three minutes. Automated billing systems let practices add secure links in reminders, directing patients to a portal for instant payments. BillFlash's PayReminders, for instance, offers a “set it and forget it” system for automating billing reminders.
Benefits of Automated Payment Reminders in Improving Accounts Receivable in Medical Billing:
- Reduces Delays: The system sends automated reminders immediately after approval and bill generation, minimizing the time between billing and payment.
- Improves Communication: Patients are more likely to pay when they receive clear, consistent balance reminders.
- Encourages Prompt Action: Reminders create a sense of urgency, motivating patients to pay sooner to avoid additional fees.
- Reduces Administrative Burden: By automating reminders, staff can focus on other tasks instead of manually tracking and following up on overdue patient accounts.
- Cost-Effectiveness: Practices only pay for the sent reminders, making it a budget-friendly solution.
Including secure links in payment reminders directs patients to a HIPAA-compliant portal, allowing them to view and pay bills instantly. This creates a frictionless payment experience that can boost patient engagement by 68% compared to traditional methods. BillFlash's PayReminders automated workflow allows practices to set rules that send up to three text and email reminders monthly until the balance has been paid. Once patients pay their balance, the system automatically removes them from the sequence, reducing the need for manual work.
Proactive Billing: Secure Payments Before the Visit
To optimize revenue cycle management and streamline accounts receivable in medical billing, practices can utilize pre-visit billing strategies. This strategy involves collecting patient payments before the date of service. Pre-visit billing offers numerous advantages: it reduces no-show rates by increasing patient commitment, accelerates cash flow, and minimizes the likelihood of post-appointment billing surprises that can lead to delayed payments or billing disputes.
By addressing financial responsibilities upfront, practices create a smoother, more transparent experience for patients and staff. Key components of a successful pre-visit billing strategy include:
- Cost Transparency: Providing patients with clear and understandable explanations of anticipated charges, including copays, deductibles, and non-covered services.
- Flexible Payment Options: Offering convenient and secure payment methods, such as online portals and payment plans, to facilitate early payment.
Extend automation beyond these general pre-visit billing best practices with BillFlash PreBill, a solution for collecting patient responsibilities.
How PreBill Works:
BillFlash PreBill simplifies pre-visit billing, allowing medical practices to collect patient fees upfront. With this, practices can send a secure PreBill link via text or email that sends patients to PayWoot.com to pay their portion of the visit charges before the appointment. PreBill works for office visits and telehealth appointments, making it versatile and adaptable to different practice models. It also works even without a formal bill, simplifying the process for patients and staff.
The benefits of PreBill services extend to medical practices in several important ways. Automated reminders and pre-visit billing help reduce payment delays, improving the overall revenue cycle. Automation eliminates the need for manual follow-ups. Clear and timely communication enhances the patient experience, increases satisfaction, and minimizes confusion about billing. PreBill services and automated reminders help reduce the risk of overdue accounts, ensuring lower balances. Automating these processes lowers manual billing and collection costs, resulting in overall savings for practices.
2. Make It Easy for Patients to Pay Anytime, Anywhere
Convenience is everything today—especially when it comes to healthcare. By offering flexible ways to pay, you can improve accounts receivable in medical billing, meet patients on their terms, and avoid delays. According to US Bank, 85% of consumers prefer paying medical bills electronically. In addition, 37% want to use an online portal to pay, and 32% choose to pay via a mobile app. Simplifying the process helps patients make prompt payments, allowing your practice to receive them faster.
With BillFlash Pay, you can give patients hassle-free options to pay anytime, anywhere:
- OnlinePay: Patients can submit payments 24/7 via credit/debit card, digital wallet, or through a secure online portal, PayWoot.com, minimizing administrative tasks for staff. BillFlash also works with popular options like Apple Pay and Google Pay.
- OfficePay: Simplify in-office payments with support for credit/debit cards, checks, or cash, featuring smooth processing for seamless recordkeeping.
- PlanPay & AutoPay: Automate recurring payments (e.g., payment plans) via credit/debit cards or bank transfers to ensure predictable cash flow.
3. Offer Flexible Payment Options to Prevent Non-Payment
Affordability is a significant barrier to timely payments, with many patients struggling to pay their medical bills in full. A Kaiser Family Foundation survey highlights this issue: 61% of Americans delay or avoid medical care due to cost concerns. This trend directly impacts payment behavior, as patients facing financial strain are more likely to defer or default on payments.
To reduce non-payment risks and improve accounts receivable in medical billing, practices can implement patient financing strategies such as structured payment plans. These options split large balances into affordable installments, often with low or no interest and no hard credit checks. For practices looking to streamline these solutions internally, BillFlash FlexPay delivers a winning approach with the following features:
- Structured Payment Plans: Offer customizable plans with a 90% approval rate and 0% interest financing for qualifying patients, eliminating upfront financial burdens.
- No Hard Credit Checks: Patients apply in under a minute without affecting their credit scores, making flexible options more accessible.
By addressing affordability head-on, practices can reduce non-payment rates and recover revenue that might otherwise become bad debt. Flexible payment options also foster patient satisfaction, as they demonstrate empathy for financial hurdles while protecting cash flow.
4. Improve Statement Delivery & Reduce Returned Mail
According to a Consumer Action survey, 74% of patients prefer to receive medical bills by mail. However, 2.5% of pre-sorted first-class mail is undeliverable due to incorrect addresses, causing payment delays and increased administrative costs. BillFlash addresses this challenge by integrating the USPS National Change of Address (NCOA) service to automatically verify and update patient addresses before mailing statements, ensuring bills are sent to the most current addresses on file. If a patient has moved, the NCOA service redirects mail to their new address, minimizing returned mail and delays. Practices also receive a detailed report of updated addresses, enabling staff to correct records and streamline future mailed communications.
Statements are dispatched via First-Class USPS mail the next business day, speeding up the billing cycle and minimizing communication gaps. BillFlash enhances effectiveness by providing fully customizable statement templates, empowering practices to align patient communications with their brand identity. Custom logos, colors, and tailored layouts foster professionalism, while adjustable language and PDF inserts allow personalized messaging.
In addition, QR codes embedded in patient statements bridge the gap between traditional and digital preferences. Although 70% of patients prefer physical bills, 85% of consumers favor online payment methods. These QR codes direct patients to secure portals like PayWoot.com, enabling instant mobile payments and reducing friction for those who prefer digital transactions. By combining reliable mail delivery with modern, patient-centric features, BillFlash improves accounts receivable in medical billing and strengthens patient satisfaction. This focus ensures practices meet patients' communication preferences while maintaining a consistent revenue stream.
5. Send Past-Due Accounts to Collections—With Control
As patient financial responsibility continues to rise, unresolved balances in accounts receivable present a growing risk of bad debt and revenue loss for medical practices. Failing to implement proactive strategies for overdue payments may force practices to write off a substantial portion of outstanding balances. BillFlash Integrated Collections empowers practices to recover past-due revenue while retaining full operational oversight.
The solution starts with rules-based recommendations that proactively identify accounts needing collections intervention during billing reviews. With a customizable approval workflow, practices control which accounts to escalate and can withdraw them at any stage. Full transparency into collection activities and write-off approvals ensures accountability, while licensed agents—75% of whom are bilingual—prioritize respectful, compliance-driven recovery tactics. These agents collaborate with patients to establish manageable payment plans, such as FlexPay, preserving patient relationships while recovering funds that might otherwise be lost.
A key differentiator can be found in BillFlash's direct payment processing: collected funds are deposited immediately into the practice's account, bypassing delays associated with third-party agency disbursements. This approach accelerates cash availability and eliminates third-party fees, ensuring practices retain maximum revenue from recovered balances. By combining automation and patient-centric recovery methods, BillFlash Integrated Collections reduces exposure to bad debt and protects long-term financial health. This approach transforms collections from a reactive burden into a proactive asset of revenue cycle optimization.
Case Study: How One Practice Increased Monthly Collections by $15K With BillFlash
Maine Optometry, a high-volume practice with seven locations and 60,000+ annual patient exams, struggled with lengthy A/R cycles. Manual processes and inefficient collections workflows were delaying payments and straining staff resources. Before implementing BillFlash, Maine Optometry struggled with staffing and training for collections, inefficient manual processes, and limited payment visibility. Sending accounts to collections required manually compiling spreadsheets and coordinating with an external agency, which was time-intensive and unmanageable.
By switching to BillFlash Integrated Collections, Maine Optometry streamlined its collections process. Our solution allowed them to upload files and approve accounts for collections easily, saving significant staff time. The practice also gained better visibility into collection efforts through detailed notes on collection accounts. The results were impressive. During the initial months, Maine Optometry saw a $10,000 to $15,000 increase in monthly collections. Greater transparency and efficiency let the practice focus on high-value tasks and scale operations without increasing administrative overhead.
Nick Vacarro, Director of Finance at Maine Optometry, praised our collections solution. He stated: “For anyone that needs a service to handle collections seamlessly, I'd highly recommend BillFlash. The ease of sending accounts to collections and the improvements in transparency have been game-changers for us.”
Improve Your Cash Flow Without Increasing Workload
Cutting accounts receivable days in medical billing doesn't require expanding your staff. Implementing automated billing platforms, introducing adaptable payment plans, and improving statement delivery can improve revenue cycles and cash flow.
BillFlash's PayReminders, FlexPay, and Integrated Collections target the underlying factors driving longer A/R cycles. Schedule a demo with BillFlash to see how our billing, payment, and collection software can transform your revenue cycle.