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Unveiling the 10 Biggest Challenges Providers Face with Accounts Receivable in Healthcare!

Accounts Receivable in Healthcare
Discover challenges in healthcare AR management & get solutions with Transcure. Optimize your accounts receivable in healthcare for financial success.

Do you know HFMA’s 2023 benchmark has reported that US healthcare organizations lose an average of 5.8% of their annual revenue due to accounts receivable inefficiencies? Are you one of those healthcare organizations or private practitioners losing millions of dollars in practice revenue due to inefficiencies in accounts receivable in healthcare?

Accounts receivable management plays a critical role in maintaining the cash flow of your practice and building a financially thriving and strong practice. Delayed and piled-up ARs can lead to payment losses or bad debts, taking your medical practice’s cash flow from positive to negative.

Components of Accounts Receivable in Healthcare Practice!

For healthcare providers, accounts receivable in healthcare hold the place of the vena cava in maintaining the financial health of their practice. A medical account receivable is the sum of all outstanding payments owed to a healthcare practice for services rendered. It encompasses several different elements or categories of financial transactions within the healthcare billing process.

In order to prevent losses, you must understand all the components of accounts receivable in medical billing. These components include;

Patient balances include the amounts owed by patients for healthcare services received after accounting for any insurance coverage or third-party payments. Patient balances can include copayments, deductibles, and coinsurance amounts.

Denied Claims: Sometimes, claims submitted to insurance companies are denied for various reasons, such as incomplete information, coding errors, or a lack of medical necessity. Denied claims may need to be resubmitted or appealed until they are resolved, and the associated amounts remain in AR.

Unbilled Services: These are services provided by healthcare providers but not yet billed to insurance companies or patients. This could occur due to delays in documentation, coding, or billing processes.

Aging Balances: AR cannot be considered assets because they lie in the category of payments that have not yet been made to the provider. AR aging refers to the breakdown of outstanding balances based on the length of time they have been outstanding. Balances are typically categorized into buckets such as current, 30 days, 60 days, 90 days, and over 90 days. Aging balances help providers track and prioritize collections efforts.

Insurance Claims: These are requests submitted by healthcare providers to insurance companies seeking reimbursements for services rendered to patients. These claims lie under AR until they are paid by the payers. Insurance claims mainly include detailed information about the services provided, diagnosis codes, and billing codes required for processing and payment.

Expected Reimbursements: Reimbursements represent the payments received by healthcare providers from insurance companies or other third-party payers in response to submitted insurance claims.

Until the healthcare provider receives payment from the payer, the amount owed for the services provided remains as part of their accounts receivable in healthcare. This also includes the reimbursement amount expected from the payer. The healthcare provider records the expected reimbursement in their accounts receivable ledger, tracking the outstanding payment until it is received.

Once the payer processes the claim and reimburses the provider, the accounts receivable balance decreases as the payment is applied, reflecting the successful reimbursement for the services rendered.

Contractual Adjustments: Healthcare providers often negotiate contracts with insurance companies that specify reimbursement rates for various services. Contractual adjustments represent the difference between the provider’s standard charges for services and the contracted or negotiated rates. These adjustments are not billed to patients but are accounted for in the provider’s AR as a non-collectible amount based on the terms of their contract with the payer.

Self-Pay Accounts: Accounts receivable in healthcare may also include amounts owed by patients who do not have insurance coverage or whose insurance does not cover certain services. These self-pay accounts require billing and collection efforts directly from the patient.

Challenges in Accounts Receivable Management with Solutions

1- Delayed Reimbursements

One of the primary challenges faced by healthcare providers in accounts receivable management is the delay in receiving payments from insurance companies or patients. This leads to cash flow issues.


Inefficient billing processes, including late claim submission, coding errors, and incomplete documentation
Processing backlogs at insurance companies
Delay in meeting prior authorization requirements
Coordination of benefits (cost sharing among multiple insurance plans)
Claim audits and reviews
Incomplete patient information
Payment disputes
Changes in payer policies


To ensure timely reimbursement, healthcare providers must maintain efficient billing practices, including timely claim submission, accurate coding, and proactive follow-up on outstanding claims. Offering multiple payment options to patients, such as online payments and payment plans, can also enhance collections. Additionally, staying informed about payer policies and proactively resolving disputes are essential steps in addressing delayed reimbursements and maintaining financial stability.

You can outsource professional billers like those at Transcure to tackle the intricacies of your billing processes. These experts can also assist you in comprehending the regulations of all insurance companies to avoid reimbursement delays.

Outsource Your AR Management to Our Experts!

2- Claim Denials and Rejections

These are the most common reasons for delayed medical accounts receivable in healthcare practices. Healthcare providers often encounter claim denials or rejections due to coding errors, incomplete documentation, or non-compliance with insurance guidelines.


Errors in coding
Lack of documentation supporting medical necessity
Failure to meet insurance coverage criteria
Incorrect patient information
Duplicate claims
Services not covered by the patient’s insurance plan
Policy exclusions or limitations
Timely filing limits exceeded
Pre-existing condition exclusions
Services not deemed medically necessary
Coordination of benefits issues
Billing for non-covered services


Investing in staff training to ensure accurate coding and documentation practices can reduce the occurrence of claim denials. One of the biggest reasons for coding mistakes is the burden on your limited coding staff. A small team cannot cope with the huge number of claims you need to file every day. It’s better to outsource your medical coding and billing to  expert companies like Transcure. We have a huge team of 1100+ professional billers and coders to prevent errors in medical billing and coding and backlogs in accounts receivable.

3- High Accounts Receivable Aging

Aging of accounts receivable in healthcare beyond acceptable levels can indicate inefficiencies in billing and collection processes, leading to potential revenue loss. RCM & HIM Leader estimates that 20% of healthcare providers have A/R aging over 90 days. This suggests a significant portion is facing challenges with older receivables.


Delayed Payments
Unresolved Claim Denials
Ineffective Follow-Up Procedures
Denied Claims
Payer Disputes
Patient Financial Hardship


Regularly monitoring accounts receivable aging reports and implementing proactive measures to address overdue balances can help minimize write-offs and improve cash flow. This may involve implementing stricter payment policies, conducting regular follow-ups on overdue accounts, and outsourcing collections to third-party agencies if necessary.

Book a free consultation with accounts receivable specialists at Transcure!

4- Incomplete or Inaccurate Patient Information

Incomplete or inaccurate patient information on claims forms can lead to delays in processing and payment. Providers may encounter delays if patient demographics, insurance information, or procedural details are incomplete or incorrect.


Data entry errors or omissions during patient registration or intake processes.
Lack of verification or updates to patient insurance coverage.
Inadequate communication between healthcare staff members responsible for collecting patient information.
Unqualified coders and billers
Piles of unfiled claims and work pressure on staff
Limited staff


To address issues stemming from incomplete or inaccurate patient information, healthcare practices can implement the given solutions:

Implement standardized protocols for collecting and verifying patient information during registration or intake processes, including insurance verification and demographic updates. Leverage EHR systems to capture and store patient information accurately, reducing the likelihood of data entry errors and ensuring consistency across documentation. Outsource EHR services to experts if you don’t know how to recover the backlog of payments stuck with insurance by performing aggressive follow-ups.

Provide ongoing training to healthcare staff on the importance of accurate patient information collection and verification, emphasizing the impact on claims processing and reimbursement. Educate patients about the importance of providing complete and accurate information during registration and encourage them to proactively update their demographic and insurance details as needed.

Conduct periodic audits of patient information to identify and address discrepancies or inconsistencies, ensuring data accuracy and integrity within the practice’s systems.

By implementing these solutions, healthcare practices can mitigate delays caused by incomplete or inaccurate patient information, streamline claims processing workflows, and improve overall revenue cycle efficiency.

5- Compliance and Regulatory Changes

Keeping up with evolving healthcare regulations and compliance requirements can pose significant challenges for providers, leading to potential billing errors and penalties.

On the other hand, regulations set by insurance companies vary widely and significantly influence the processing and approval of medical claims. These regulations encompass diverse criteria for coverage, specific coding requirements, prior authorization mandates, and stringent documentation standards.

Furthermore, policy limitations and processing errors further compound the complexities, potentially leading to claim denials. Healthcare providers must navigate this intricate landscape meticulously to ensure adherence to each insurer’s regulations and avoid denials, delays in reimbursement, and associated financial repercussions.


Rapid changes in healthcare regulations
Evolving coding guidelines
Shifting payer policies


Investing in ongoing staff training and education on regulatory changes, as well as implementing robust compliance management systems, can help ensure adherence to industry standards. Additionally, partnering with experienced billing and coding vendors who stay updated on regulatory changes can provide added assurance of compliance.

Hire our AR recovery experts, who have a strong connection with all public payers in the USA, like Medicare, Medicaid, and private commercials. Our billers and coders are trained in all the old and updated regulations of the healthcare system and insurance companies.

6- Understaffed Billing Departments

Many healthcare practices struggle with limited resources in their billing departments, leading to delays in claim processing, inadequate follow-up on outstanding claims, and increased accounts receivable aging.


Budget constraints limiting the ability to hire additional staff.
High turnover rates disrupt workflow and reduce overall productivity.
Complexity of billing tasks requiring skilled personnel.


To address these challenges, healthcare practices can implement various solutions:

Simplify billing processes and prioritize tasks to maximize efficiency with limited resources. Invest in billing software and automation tools to streamline repetitive tasks and reduce manual workloads.

Consider outsourcing billing functions to third-party vendors or billing companies to alleviate staffing shortages and ensure timely claim processing, like Transcure. They have 1100+ qualified billers and coders to meet the needs of both small and large practices.

Train existing staff members to handle multiple billing functions, enabling them to fill gaps in staffing and enhance flexibility. By implementing these solutions, healthcare practices can mitigate the impact of understaffed billing departments, improve billing efficiency, and optimize accounts receivable management.

7- Coordination of Benefits

Patients with multiple insurance policies may require coordination of benefits (COB) to determine which insurance plan is the primary payer. Delays can occur while insurance companies coordinate benefits and determine responsibility for payment.


Patients with multiple insurance policies
Need for coordination of benefits (COB)
Determining the primary payer among multiple insurance plans


To address delays stemming from the coordination of benefits (COB), healthcare providers can implement streamlined processes for verifying insurance coverage and coordinating benefits. This involves establishing efficient workflows and protocols to quickly determine the primary payer among multiple insurance plans.

Additionally, utilizing electronic systems can facilitate faster communication between insurance companies, reducing the time required to coordinate benefits and process claims. Furthermore, educating patients about their insurance coverage and the importance of providing accurate information can help minimize delays by ensuring that all necessary details are provided upfront, streamlining the billing process, and expediting reimbursement.

8- Insurance Contract Negotiations

Negotiating favorable reimbursement rates with insurance companies can be challenging for healthcare providers, especially smaller practices with limited bargaining power. Insurance contract negotiations can delay accounts receivable in healthcare by prolonging the process of finalizing reimbursement rates between healthcare providers and insurance companies.

When providers face challenges in negotiating favorable terms, such as lower reimbursement rates or complex contract terms, it can lead to delays in reaching agreements. These delays can directly impact AR by prolonging the time it takes for providers to receive payments for services rendered. Additionally, unresolved negotiations may result in uncertainties regarding reimbursement amounts, further complicating revenue forecasting and cash flow management for healthcare practices.


Limited Bargaining Power
Complex Contract Terms
Changing Payer Policies
Economic Pressures


Engaging in strategic negotiations with payers based on a thorough analysis of practice performance and industry benchmarks can help providers secure more favorable contract terms. Collaborating with professional billing consultants or joining group purchasing organizations (GPOs) may also provide leverage in negotiations.

9- Claim Audits and Reviews

Insurance companies may conduct audits or reviews of claims to ensure compliance with billing guidelines and detect potential fraud or abuse. Delays can occur while claims are under review, leading to postponed reimbursements. These postponed audits may delay your accounts receivable in healthcare. 


Insurance companies need to verify the accuracy and legitimacy of billed services.
Identification of coding errors, overbilling, or improper documentation.
Compliance with regulatory requirements and industry standards.


Implement robust billing processes to minimize errors and discrepancies in claims submissions, reducing the likelihood of audits or reviews. Ensure thorough and accurate documentation of medical services rendered to support claims and mitigate potential discrepancies during audits or reviews.

Promptly respond to audit requests from insurance companies with comprehensive documentation and clarification, expediting the review process. Train billing staff on coding guidelines, documentation requirements, and compliance standards to minimize errors and reduce the frequency of claim audits or reviews. Establish open communication channels with insurance companies to address concerns and resolve issues proactively, fostering collaboration and reducing delays in claim processing.

By implementing these solutions, healthcare practices can navigate claim audits and reviews more effectively, minimize delays in reimbursement, and ensure compliance with billing regulations and standards. These solutions are the keys to successful accounts receivable in healthcare management. 

Talk to our experts for a detailed audit of your practice!

10- Claim Processing Backlogs 

Providers may encounter delays in claim processing and payment due to claim processing backlogs, which occur when insurance companies experience high volumes of claims, leading to delays in payment. Claim processing backlogs are one of the common reasons for the failure to manage accounts receivable in healthcare.


High volumes of claims submitted by healthcare providers, particularly during peak periods such as flu season or after significant healthcare events.
Staffing shortages or resource constraints within insurance companies’ claims processing departments.
Technical issues or system downtime affecting the efficiency of claims processing systems.
Complexity of claims requiring additional review or investigation by insurance company staff.


To mitigate the impact of claim processing backlogs on accounts receivable, healthcare providers can consider the following solutions:

Focus on submitting claims promptly and accurately to reduce the risk of delayed processing. Leverage electronic health record (EHR) systems or billing software to submit claims electronically, which can expedite processing compared to paper submissions.

Regularly track the status of submitted claims and follow up with payers on any outstanding or delayed claims to ensure timely resolution. Streamline internal billing processes to improve efficiency and reduce the risk of errors that could contribute to processing delays. Establish lines of communication with insurance company representatives to address any issues or concerns related to claim processing and payment delays.

By implementing these solutions, healthcare providers can minimize the impact of claim processing backlogs on their accounts receivable in healthcare and maintain financial stability.

Importance of Outsourcing AR Recovery and Management  

Outsourcing AR recovery and management can significantly benefit healthcare providers by alleviating the burden of complex billing processes and improving overall financial performance. Outsourcing is considered the most successful pathway towards managed and prosperous accounts receivable in healthcare. 

With the intricate nature of healthcare billing and the constant evolution of regulatory requirements, outsourcing to specialized firms like Transcure ensures expertise and efficiency in navigating the complexities of AR management. By partnering with Transcure, healthcare practices can streamline their revenue cycle, reduce AR aging, and enhance cash flow, allowing them to focus more on delivering quality patient care.

Transcure offers comprehensive accounts receivable management services tailored to the unique needs of healthcare providers. With a team of experienced professionals and advanced technology, they specialize in maximizing revenue recovery, minimizing denials, and optimizing collections processes. 

We offer detailed AR tracking reports daily to streamline revenue cycle management for healthcare providers. These reports include essential components such as claim details, status updates, follow-up dates, and communication mediums with insurance companies. With detailed insights into claim statuses and follow-up actions, healthcare providers can effectively manage their accounts receivable and optimize reimbursement processes.

By leveraging Transcure’s expertise, healthcare practices can experience improved financial performance, reduced administrative burden, and enhanced profitability, ultimately allowing them to thrive in today’s dynamic healthcare landscape.

Showcasing How Transcure’s Assistance Enhanced IPCC’s AR

Discover the remarkable impact of Transcure’s expertise on IPCC’s accounts receivable. Through meticulous claim audits, diligent follow-ups on outstanding claims, and the integration of cutting-edge billing software, Transcure successfully reduced IPCC’s AR by over $3 million in just two months. This transformation not only streamlined IPCC’s revenue cycle but also catalyzed a remarkable 20% surge in overall collections. Additionally, the days in accounts receivable plummeted from 95 to under 35 days. With Transcure’s invaluable support, IPCC achieved unprecedented financial recovery and operational efficiency, paving the way for a new era of growth and success for the practice. Explore the intricate details of this incredible journey here!

Reimagine Your Financial Future with Efficient AR Management!

Just like a skilled surgeon requires the right tools to navigate the intricacies of the human body, healthcare providers need the right strategies to conquer the complexities present in the management of accounts receivable in healthcare. By understanding the ten common challenges and implementing the actionable solutions provided in this article, you can transform your revenue cycle from a battlefield of inefficiencies into a streamlined process. 

Plus, partnering with professionals like Transcure, empowers you to chart a course toward financial stability and dedicate your practice to its core mission which is providing exceptional patient care. With the assistance of our experts, your AR days can be reduced to as low as 24 days while you look after your patients peacefully.



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