Is your Accounts Receivable cycle working against you?
When payments slow down, so does everything else—from cash flow to staff efficiency.

In this episode, we tackle one of the biggest financial drains in healthcare: long accounts receivable cycles. From mounting bad debt to overwhelmed staff, delayed payments can put serious pressure on small practices.

But fixing it doesn’t have to mean hiring more staff or overhauling your systems.

We break down five practical, proven strategies to reduce AR days, accelerate collections, and improve the patient experience. From automation and pre-visit billing to flexible payment plans and provider-controlled collections, these are real solutions that work.

Want to get paid faster—with less effort? Tune in now.

Transcript

Narrator: 00:00

Welcome to the Billing Blueprint Podcast, your go to resource for innovative medical billing solutions. Each episode we explore the latest industry trends and share proven strategies to help your practice streamline operations and get paid faster. Now here are your hosts, Brad and Sarah.

Sarah: 00:22

 You're here. So you likely know that in the world of running a medical practice, getting paid promptly, it's can feel like a constant uphill battle.

Brad: 00:30

 It really can. A major headache for many.

Sarah: 00:33

 Today on the deep dive, we're digging into a crucial area, Accounts receivable, or ar. We got some compelling information here based on insights from Bill Flash focused on concrete ways to improve your AR.

Brad: 00:46

 Good stuff. Practical advice is key.

Sarah: 00:49

 And specifically, without needing to hire more staff. Now think about this. In 2022, over half thin 56% of medical groups reported spending more time on AR management.

Brad: 01:00

 Wow. More time. That's not the direction you want to go.

Sarah: 01:02

 Exactly. And the kicker, a staggering $17.4 billion was written off as bad debt in 2023.

Brad: 01:09

 Oof. That's serious money.

Sarah: 01:11

 So our mission today is to, you know, cut through the noise and extract practical, proven strategies that can help you tackle this head on.

Brad: 01:18

 Sounds good. It's certainly a critical area. While the clinical side rightly gets a lot of attention, the financial health of a practice, while that's the bedrock that allows for quality care to continue, a strong understanding of how to manage your revenue cycle, especially those accounts receivable, it just makes all the difference in long term stability.

Sarah: 01:34

 Okay, let's get down to brass tacks then. Why is a long AR cycle more than just like an annoyance? What's the real damage it inflicts?

Brad: 01:43

 Well, it really hits the financial core of a practice in several ways. Our information points out that a significant number of providers we're talking about 40% are missing out on over $31,000 a year.

Sarah: 01:55

 31,000 just from patience?

Brad: 01:57

 Yeah. Simply due to unpaid balances. That's a substantial amount of potential revenue that could be reinvested or, you know, contribute to the bottom line. Definitely. And beyond those outright losses, a drawn out AR cycle creates this kind of financial drag. You see, top performing practices generally keep their AR under 35 days.

Sarah: 02:16

 Under 35. Okay.

Brad: 02:17

 Which allows for much more predictable cash flow. When you see practices creeping into that 35 to 50 day range, things get tighter. And once you're consistently over 50 days, the financial strain can become quite severe. It impacts everything from day to day operations to, well, future growth.

Sarah: 02:35

 It really paints a picture of real financial uncertainty. And I can only imagine the sheer hours that staff must Spend trying to track down those overdue payments.

Brad: 02:46

 Oh, absolutely. And that's where we find those often invisible costs piling up. We're talking about the time spent on manual calls, sifting through records, correcting billing errors, all that administrative back and forth.

Sarah: 02:56

 Yeah, the rework.

Brad: 02:57

 Exactly. The figures suggest that these inefficiencies can actually eat away at around 30%. 30% of a medical practice's potential income.

Sarah: 03:05

 30%. That's huge.

Brad: 03:07

 It's like a silent drain on resources.

Sarah: 03:09

 Okay, so the problem is clear. Now let's dive into what can actually be done about it. Our source material from Bill Flash outlines five key strategies to help reduce those AR days.

Brad: 03:19

 Right.

Sarah: 03:20

 The first one that really struck me was the idea of automating patient billing and payment reminders. It sounds straightforward, maybe, but it seems like a fundamental shift for many practices.

Brad: 03:30

 You know, what's truly insightful about automation in this context is how it sort of removes the emotional element from billing. Follow up.

Sarah: 03:37

 Interesting point.

Brad: 03:38

 Patients might screen a call from the practice. Right. But a polite automated reminder via text or email often feels less intrusive, more like a helpful prompt. Think about it. It's a consistent, tireless process. It doesn't rely on staff having the time or, you know, remembering every single outstanding balance.

Sarah: 03:59

 And the advantages seem pretty obvious then. We're talking about fewer delays in payment, clearer communication with patients about their bills, and ultimately encouraging them to pay sooner. Plus, it frees up valuable staff time from those repetitive tasks.

Brad: 04:12

 Exactly. And the cost effectiveness is a significant factor, too. With a system like Bill Flash's pay reminders, the practice typically only incurs a cost for reminders that are actually delivered.

Sarah: 04:24

 Ah, so you only pay for what's sent.

Brad: 04:25

 Precisely. It's not a blanket expense, but rather targeted outreach. And when you consider the engagement rates with text messages, I mean, a remarkable 98% open rate.

Sarah: 04:34

 98%?

Brad: 04:35

 Yeah. With most people reading them within minutes. You can see the power of this approach and the ability to include a secure link for immediate payment right within that text. That creates a seamless pathway for the patient to take action.

Sarah: 04:50

 It really is about making it as easy as possible for the patient, isn't it? Remove the obstacles and they're much more likely to pay promptly.

Brad: 04:56

 Absolutely.

Sarah: 04:57

 The source highlights pay reminders as a set it and forget it system, which for anyone dealing with billing, must sound like a dream. Up to three automated reminders a month via text and email, and it stops automatically once payment is received. That's a significant reduction in manual effort.

Brad: 05:14

 It really is. And if we Connect this to the bigger picture of patient experience. These timely and polite automated reminders can actually enhance it. Patients appreciate being kept informed. You know, they aren't blindsided by collection notices weeks or months later.

Sarah: 05:30

 Right. It sets better tone, sets a more.

Brad: 05:32

 Professional and transparent tone for the financial aspect of their care.

Sarah: 05:35

 Yeah. Now this leads nicely into another proactive strategy mentioned. Pre visit billing. This is about getting the financial conversation started even before the patient walks through the door. Right.

Brad: 05:46

 Very slicely. Pre visit billing is. Well, it's a smart way to get ahead of potential payment issues. By addressing estimated costs and collecting patient portions before the appointment, you're tackling a key point of friction early on.

Sarah: 05:59

 Okay.

Brad: 06:00

 This can contribute to lower no show rates. Maybe because patients have a financial commitment. Makes sense and it definitely helps to accelerate your cash flow. Plus it minimizes those, you know, unexpected bill amounts that can lead to disputes.

Sarah: 06:12

 And delays after the appointment, which benefits everyone, really. The source emphasizes that transparency about costs and offering flexible payment options are crucial for successful pre visit billing. Yeah, that makes perfect sense.

Brad: 06:24

 Totally.

Sarah: 06:25

 If patients understand what they owe and have ways to manage the payment, they're much more likely to pay upfront.

Brad: 06:30

 Absolutely. And this is where a tool like bill flash pre bill can be particularly useful. It allows practices to securely request and collect patient payments for estimated services even before a formal bill is generated.

Sarah: 06:43

 So even without the final bill.

Brad: 06:45

 Yeah. Think of it as a way to handle co pays or expected out of pocket expenses upfront. Whether it's for an in office visit or even a telehealth consultation, that immediate payment can significantly reduce the need for post appointment billing follow up.

Sarah: 06:59

 And lowers the risk of overdue account.

Brad: 07:01

 Exactly. Lowers that risk right from the start.

Sarah: 07:03

 Okay, so being proactive and automating are key foundational steps. The second proven way to reduce AR days is all about convenience, making it easy for patients to pay anytime, anywhere. It really feels like the reliance on, you know, traditional mailed checks is fading fast.

Brad: 07:19

 Oh, that's definitely right. Consumer expectations evolved significantly. And healthcare billing, well, it needs to adapt the statistic that 85% of consumers prefer electronic payment methods. That's a clear indicator of this shift.

Sarah: 07:32

 85%. Wow.

Brad: 07:33

 And within that, a large percentage specifically look for online portals and mobile apps as their preferred ways to handle payments.

Sarah: 07:42

 Right.

Brad: 07:43

 If a practice isn't offering these options, they're essentially creating unnecessary hurdles in the payment process.

Sarah: 07:49

 And those hurdles directly translate into longer AR cycles, don't they? The easier and more convenient it is for someone to pay, the more likely they are to do it. Quickly.

Brad: 07:58

 Couldn't agree more.

Sarah: 07:59

 Billflash Pay seems to provide a range of options to address this.

Brad: 08:02

 It does? Yeah. Their online pay gives patients the ability to pay their bills 247 using various methods like credit and debit cards, digital wallets, things like Apple Pay and Google Pay.

Sarah: 08:13

 It's a usual suspect, Right.

Brad: 08:14

 Offering that anytime, anywhere. Convenience. Then you have office pay for in pros and transactions, ensuring seamless and accurate record keeping right at the point of service.

Sarah: 08:23

 Okay.

Brad: 08:24

 And for patients needing more flexibility, plan pay and autopay allow for automated recurring payments, which can be a real asset for managing larger balances or maybe ongoing treatment plans.

Sarah: 08:34

 That automated recurring payment option, plan pay and autopay really ties into the third strategy, offering flexible payment options to prevent non payment in the first place. This acknowledges that. Yeah, large medical bills can be a real financial burden for many people.

Brad: 08:50

 Exactly. Affordability is a major consideration. That Kaiser Family foundation survey. The one highlighting that a significant percentage of Americans delay or avoid medical care due to cost.

Sarah: 09:02

 Yeah, I saw that. 61%.

Brad: 09:05

 I think that's the one. It's a stark reminder when patients are facing financial constraints. Simply sending a bill for the full amount and expecting immediate payment isn't always. Well, it's not always viable.

Sarah: 09:18

 No.

Brad: 09:18

 Offering structured payment plans demonstrates understanding and provides a manageable way for them to fulfill their financial obligations.

Sarah: 09:25

 And it's a better outcome for the practice because a patient on a payment plan is still paying.

Brad: 09:30

 Right.

Sarah: 09:31

 Whereas a bill that's just too high to manage might just go unpaid altogether, eventually becoming bad debt.

Brad: 09:36

 Precisely. And Billflash FlexPay appears to be a helpful tool in this area. The fact that they report a high approval rate for these payment plans. Like 90%.

Sarah: 09:45

 90% approval, that's high.

Brad: 09:47

 It is. And often with zero percent interest for eligible patients and without requiring a hard credit check. That makes it a much more accessible option for a wider range of individuals.

Sarah: 09:57

 So no hard credit check is a big deal.

Brad: 09:59

 Huge deal. By proactively addressing affordability concerns, practices can significantly reduce their non payment rates and recover funds they might otherwise have had to write off. Plus, it fosters a more positive relationship with patients.

Sarah: 10:12

 Definitely a more patient centric approach. Okay, now let's shift gears a bit to something that might seem a bit old school, but is still clearly important. Statement delivery. The fourth point focuses on improving statement delivery and reducing returned mail. I was actually surprised to learn that a large majority of patients, what was it, 74%. Still prefer to receive their bills by mail.

Brad: 10:33

 It is quite interesting, isn't it? Despite the, you know, increasing adoption of digital communication, there's still a strong preference for the tangible nature of a paper bill for many individuals.

Sarah: 10:45

 Yeah.

Brad: 10:45

 However, as the statistic about undeliverable mail emphasizes, about 2.5% of pre sorted first class mail doesn't make it 2.5%.

Sarah: 10:55

 Doesn't sound like much, but.

Brad: 10:56

 But it adds up. Relying solely on postal delivery can create significant inefficiencies. That seemingly small percentage of returned mail can add up to considerable delays and costs for practice. Postage, staff time, delayed payments.

Sarah: 11:12

 Right, the whole chain reaction. So even if patients prefer mail, you need to ensure that mail is actually reaching them.

Brad: 11:17

 Exactly.

Sarah: 11:18

 The source mentions bill flash integrating the USPS National Change of Address Service NCOA to verify and update addresses before the statements are mailed. That sounds like a really practical way to tackle this.

Brad: 11:29

 It's a very effective and honestly often overlooked step. By leveraging the USPS's address update system, practices can significantly cut down the number of statements that end up coming back.

Sarah: 11:40

 Makes sense.

Brad: 11:40

 This not only speeds up the billing cycle and gets the bill into the right hand sooner, but it also saves on wasted postage and the administrative headache of dealing with returned mail.

Sarah: 11:49

 And you get updated addresses too?

Brad: 11:51

 Yeah. And getting a report of those updated addresses allows the practice to maintain more accurate patient records for future communication. It's good data hygiene.

Sarah: 12:01

 And it's not just about the address accuracy. It's also about the statement itself. The source mentions customizable statement templates and including QR codes.

Brad: 12:09

 Exactly. So while a patient might prefer a physical statement, that doesn't mean they don't also appreciate the convenience of digital payment options.

Sarah: 12:18

 Good point.

Brad: 12:19

 Including a QR code that links directly to a secure payment portal like paywood.com mentioned in the source provides that bridge. They get the familiar paper bill, but they also have a quick and easy way to pay online using their phone, if that's more convenient for them at that moment.

Sarah: 12:35

 Bridging the old and new.

Brad: 12:36

 Right. And those customizable templates, they allow practices to present a more professional and branded communication, which can also enhance patient trust. Makes it look less like a generic demand for money.

Sarah: 12:48

 Okay. We've covered being proactive, making payments easy and flexible, and ensuring the bill gets delivered. That brings us to the fifth and final strategy. Managing past due accounts through collections, but with an emphasis on control. That last part with control sounds particularly important.

Brad: 13:07

 It is absolutely vital. Look, dealing with accounts that have gone past due is an unfortunate reality for most medical practices. Yeah, it happens, but it needs to be handled strategically. You want to Recover revenue while also maintaining patient relationships as much as possible. And with increasing patient responsibility for healthcare costs, the risk of bad debt is certainly a growing concern.

Sarah: 13:26

 For sure. And the idea of just handing over these accounts to a third party collection agency can sometimes feel a bit, I don't know, disconnected.

Brad: 13:34

 Yeah. Removed from the practice's direct involvement. It can feel like you lose control.

Sarah: 13:39

 Right. So it's good to hear about solutions like Bill Flash integrated collections that aim to give the practice more direct oversight.

Brad: 13:46

 What's particularly insightful here, I think, is the level of control this approach offers. The system can provide rules based recommendations to identify accounts that might benefit from collection efforts.

Sarah: 13:59

 Okay, so it flags them.

Brad: 14:00

 Right. But the practice retains the authority to decide which accounts are actually pursued. They can even customize the steps in the collection process and have the ability to withdraw accounts if needed.

Sarah: 14:10

 So you're still in the driver's seat.

Brad: 14:12

 Exactly. That. Transparency into the collection activities is also incredibly valuable. And the fact that the collection agents, apparently 75%, are bilingual, which is interesting.

Sarah: 14:22

 Good detail.

Brad: 14:23

 Are trained to communicate respectfully and in compliance with regulations, and even work with patients on establishing manageable payment plans like Flex Pay, that suggests a more patient sensitive approach.

Sarah: 14:35

 That sounds much better than the stereotypical aggressive collector.

Brad: 14:38

 Hopefully, yes. And the direct payment processing seems like a significant advantage as well. Collected funds are deposited directly into the practice's account, avoiding the potential delays and importantly, the fees often associated with traditional third party collection agencies.

Sarah: 14:54

 No middleman taking a cut or holding the money.

Brad: 14:57

 Exactly that. Direct access to recovered funds can have a tangible impact on a practice's cash flow. It reframes collections from being just a reactive expense to a more integrated and controlled part of their overall revenue management strategy.

Sarah: 15:12

 We even have a real world example of this in action. Main optometry. Their situation dealing with long AR cycles, inefficient collections. It sounds like a pretty common challenge.

Brad: 15:22

 Very common, unfortunately.

Sarah: 15:23

 And by implementing Bill Flash integrated collections, they saw a really impressive increase in monthly collections within just the first few months.

Brad: 15:31

 Yeah. It's a compelling example of how these strategies can translate into real financial improvements. The fact that they saw a, what was it, 10 to $15,000 increase.

Sarah: 15:40

 $10,000 to $15,000 a month increase? Yeah.

Brad: 15:43

 In monthly collections. So quickly demonstrates the potential impact. And the quote from their Director of finance, Nick Focaro, emphasizing the ease of use and improved transparency, that really underscores the practical benefits for the practice's staff and overall operations.

Sarah: 15:59

 It makes it tangible. So if we take a step back and look at the whole picture, it seems that effectively reducing AR days doesn't necessarily require hiring more staff or just adding to their workload.

Brad: 16:11

 No, not at all.

Sarah: 16:12

 It's more about strategically implementing smarter, more automated systems and importantly, keeping the patient experience in mind throughout the entire billing and payment journey.

Brad: 16:24

 Precisely. We've explored the power of automating reminders and the billing process itself, the importance of offering convenient payment options, the need for flexible payment plans to address affordability. Right, the FlexPay idea, the continued relevance of accurate statement delivery even with mail.

Sarah: 16:40

 Preference and the QR codes, and a.

Brad: 16:42

 More controlled, integrated approach to managing past due accounts. Tools like Bill Flash's Pay Reminders, Flex Pay and integrated Collections appear designed to address those fundamental challenges that contribute to longer AR cycles.

Sarah: 16:56

 So for you listening right now, think about your own context. Maybe you're in a practice, maybe you consult with them, maybe you're just interested in healthcare finance. What aspects of your current AR process, or the ones you see resonate with these challenges? Yeah, which of these strategies sparks an idea for how you could improve things?

Brad: 17:14

 And this brings up, I think, a key question for you to consider. If you could significantly shorten your own accounts receivable cycle, however that manifests in your professional world. Whatever you're trying to collect on, so to speak, and free up valuable time and resources, what new opportunities might that unlock? It's not just about the immediate financial gain, though, that's important. It's about the potential for growth, for innovation, and maybe just a greater sense of financial well being and less stress.

Narrator: 17:45

Thanks for tuning into the Billing Blueprint podcast. For more insights or to dive deeper dive deeper into today's topics. Head over to billflash.com. Don't forget to subscribe and we'll catch you next week with more strategies to keep your practice running smoothly and getting paid faster

Sources:

How to Reduce Days in Accounts Receivable (A/R) in Medical Billing Without Adding Staff