We all know the fact that hospital accounts receivable is a vital concern for almost every hospital-be it big or small, and the challenges are far critical when the hospitals in rural parts of the U.S. are concerned.
The majority of rural hospitals are small in size, and they often struggle to receive timely payments, ending up with a pile of hospital accounts receivable and a thin margin of revenue. However, you can see the whole picture of AR foundations in rural hospitals by knowing about the following things-
- What is hospital accounts receivable?
- The AR performance gap between rural and urban hospitals
- Unique challenges that rural hospitals often face in managing accounts receivable
- Reasons why rural hospitals lose more on aging AR
- Perfect measures to ensure a perfect hospital accounts receivable management service
What is hospital accounts receivable?
Hospital accounts receivable (AR) is the money a hospital is waiting to collect after giving care. You always send a bill to the patient's insurance company or the patient after completing the treatment. But the payment doesn't come right away. This unpaid amount is called AR. Always remember that the longer it takes for you to get paid, the harder it is for you to collect the amount. You can classify your delinquent accounts based on the following age buckets-
- 0-30 days
- 31-60 days
- 61-90 days
- 91-120 days and above
Once a bill goes past 90 days, it's much harder to recover. For any hospital, too many in the 90+ day category is a problem. For rural hospitals, it can be a disaster as they have almost zero chance of recovering the full amount from those particular bills.
Now, you must know what makes the difference between urban and rural hospitals based on AR performance.
The urban Vs rural AR performance gap:
Urban hospitals have more staff, better technology, and stronger communication with payers as they have more resources to invest in. This helps them process claims quickly and follow up on unpaid bills faster. Rural hospitals don't have these advantages. Rural hospitals usually take longer to collect payments due to a serious staff shortage, a higher number of patients with no insurance at all, and other peripheral constraints, thus leading them to face a higher number of claim denials than hospitals in urban areas. Because of this, they end up with more aging receivables.
The following are the vital reasons why rural hospitals always struggle with AR management. Fewer billing and coding staff members are the serious roadblocks for rural hospitals, especially when managing their AR is concerned. Sometimes, just one or two people handle coding, denials, appeals, and follow-ups, thus causing frequent claim denials and unwanted delays in receiving payments. They also lack advanced technology. While urban hospitals use tools to automate billing, rural facilities may still rely on old-school manual systems.
This makes it hard to track and follow up on claims, leading to a cash flow crisis. Denial rates are also higher in rural hospitals because of coding mistakes, missing authorizations, and a lack of dedicated denial teams. Denied claims add to aging AR when not followed up. Also, rural hospitals usually treat more Medicare and Medicaid patients, which means slower and lower payments than payments from private insurers. The federal insurance bodies come with complex rules and regulations to follow, making it even harder for the internal staff members to manage them efficiently.
The financial officers always find it overwhelming to manage their jobs. They manage finances, hiring, vendors, audits, and more, often without a full RCM team. Many rural CFOs say aging AR is their top concern. Every unpaid day puts more pressure on their already thin budgets. Urban hospitals can usually manage slow payments, but rural ones can't. Aging AR causes cash flow problems, more write-offs, fewer upgrades, and sometimes, hospital closures. So, for rural hospitals, aging AR isn't just a billing issue—it's a matter of survival.
Fortunately, a hospital located in rural America can still ensure perfect hospital accounts receivable management by implementing the following strategies:
Learn about the most effective tips to improve hospital accounts receivable management services:
1. Focus on Clean Claims
Claims that are paid after the first submission are known as clean claims. Improving coding accuracy, ensuring correct patient data, and verifying insurance before the visit can reduce denials.
Each clean claim means faster payments and less work for follow-ups.
2. Track AR Aging Buckets Weekly
Many rural hospitals only review AR monthly. That's too late. A weekly dashboard showing claims by aging bucket can help you take early action on high-risk claims. You can also prioritize accounts about to cross the 90-day mark.
3. Invest in Staff Training
Even one well-trained biller can make a big difference. Make sure staff understand:
- The top reasons for denials
- How to appeal quickly
- Payer-specific rules
Training reduces errors and speeds up collections.
5. Use Affordable Technology
You don't need fancy software to get results. Even small tools that send follow-up reminders, verify insurance, or flag aging claims can help.
Some RCM vendors even include tools as part of their services.
6. Partner with an RCM Expert
Nowadays, most rural hospitals are now outsourcing their AR to a third-party AR management partner to reduce the number of delinquent accounts. Companies that specialize in hospital accounts receivable can:
- Reduce AR days
- Follow up on aging claims
- Lower denial rates
- Improve collections
And the best part? These services often cost less than hiring full-time staff.
Outsourcing hospital accounts receivable can be a game-changer, especially for rural hospitals struggling with limited staff, slow payments, and high denial rates. When you work with a trusted RCM partner, you get expert help to manage every part of your hospital accounts receivable process. From faster follow-ups to cleaner claims and fewer denials, outsourcing brings in the right tools and people without adding to your payroll. It also means better tracking, more organized AR aging, and improved collections, thus ensuring a seamless cash flow throughout the fiscal year.
