Effectively managing accounts receivable is critical to any organization’s financial success. However, when it comes to the long-term care facilities in the US, collection of receivables becomes a different ball game altogether. In addition to the pressure of delivering high level of care to clients, senior living businesses also find themselves dealing with frequent market-driven and government-mandated changes.
As a result, many organizations often fail to follow-up on outstanding claims, giving rise to both short-term and long-term cash flow issues – which can eventually lead to a complete collapse of a business’s finance function. Let us dive deep and try to decode the root cause of the most common accounts receivable problems hurting senior living providers and how to overcome them.
Failing to Gather Proper Documentation
More often than not, accounts receivable problems faced by senior living businesses stem out from an inefficient admission process. Obtaining the resident’s demographic and insurance information at the time of admission is a critical process that forms the base for accurate billing. When a business fails to do this, it is more likely to make less-informed admission decisions which can potentially lead to higher bad debts in the future.
One of the easiest ways to overcome this problem is to ensure integration of the billing and admission departments. Once your admission screeners start working in tandem with the billing teams, not only are you more likely to obtain all the demographic information but also gain an understanding of how the collection process will work with that resident. Once this information is received, it can be promptly submitted to the state for quick approval and payments.
RELATED BLOG: Do you know that in the last few years, Artificial Intelligence (AI) & Machine Learning (ML) have become the key to unlocking several accounts receivable opportunities? Read this blog for more!
Management of Medicaid Pendings
Another common problem faced by nursing facilities centers around effective management of its residents’ Medicaid applications. Owing to a lack of standardized follow-up procedure and pre-determined escalation plans, onshore finance teams often fail to get timely approvals by the Department of Social Services (DSS). This leads to delayed payments which in turn, becomes the root cause of major financial setbacks.
There are many factors that can determine the approval turnaround time for Medicaid applications but the most important of them all is a solid follow-up procedure. Working with an accounts receivable sourcing company can help streamline both admission and collections process.
A team of dedicated collections experts ensures that any information-related issues are quickly identified and a pre-determined follow-up process is established. In addition, these accounts receivable specialists can also act a bridge between with the responsible parties of residents and the state’s DSS, facilitating seamless communication and quickly resolving any issues that may arise.
Decentralized Accounting Function
In addition to the above-mentioned challenges, many large senior living businesses with multiple facilities end up with high DSOs and bad debts due to the scattered nature of their accounting function. Many a times, these organizations fail to allocate their human resources effectively – resulting in either wastage of manpower or short-staffing in busier facilities. To add to that, each facility might have its own processes, which only adds to the complexities.
Outsourcing accounts receivable to a specialist vendor is one of the best ways to centralize operations. A specialist vendor will introduce a team off collection experts to your business and ensure implementation of uniform workflows & processes across facilities. Additionally, an experienced partner will also bring an element of scalability to your organization – allowing you to overcome business peaks & troughs without having to worry about your receivables going off the track.
QX: Your One-stop Accounts Receivable Specialist Partner
By now you must have understood how complex, yet important accounts receivable is to senior living businesses. Partnering with an experienced accounts receivable accounting solutions provider can help optimize processes, implement latest technology and enable focus-shift to high value tasks – all at a fraction of cost.
Over the last two decades, QX Global Group has worked with businesses across the world to streamline collections through future-ready shared service centers. Our solutions for senior living companies in the US are backed by a unique partnership approach to build a strong business relation where you stay in control. Get in touch to speak with our finance transformation experts today!
Originally published Jan 14, 2022 08:01:27, updated Jan 14 2022