Every dollar a medical practice has earned but not yet collected sits in accounts receivable, which makes AR one of the clearest measures of billing health there is. Since everything owed to a medical practice falls under accounts receivable, it is easy to see how important good AR management is to the success of any business. Surprisingly, though, millions of dollars are lost every year simply due to a lack of AR follow-up management.
Accounts receivable includes both what payers owe for reimbursement and what patients owe for co-pays and the part of any charges for which they are responsible; therefore, your A/R department must have the necessary skills to deal graciously with patients as well as be able to be persistent with payers.
What is AR Follow up in Medical Billing?
AR follow up in medical billing is the process of tracking every unpaid claim after submission, contacting payers to resolve delays and denials, and pursuing outstanding patient balances until each account is paid, appealed, or properly closed. It is the stage of revenue cycle management that converts billed charges into actual revenue.
The entire process is proactive rather than reactive. A claim with no payer response within the expected window receives a claim status inquiry. A denied claim is corrected and resubmitted before its appeal deadline expires. An underpayment is flagged against the payer contract rate during payment posting. Without proper AR follow up, claims silently age past timely filing limits and become permanent write offs.
The AR Follow Up Process Step by Step
A structured and systemized AR follow up workflow goes through the same sequence of processes, irrespective of the scale of practice:
- Generate AR aging report and group accounts according to payer, balance, and aging.
- Sort the worklist by amount of dollars and due date instead of oldest date.
- File claim status requests related to the claims that have no payer response.
- Each claim should be identified as denied, underpaid, pending information, and never received.
- Fix the denied claim again or start the appeal operation with the relevant support documentation.
- Match the payments against the payment advices and the rates indicated in the contracts.
- Highlight validated patient responsibility and move it into the patient balance follow up.
- Find and discuss the problem of every resolved account so that the same mistake will not happen again in the future.
Reading the AR Aging Report
| Aging Bucket | What It Signals | Priority Action |
|---|---|---|
| 0 to 30 days | Normal adjudication cycle | Monitor, no intervention needed |
| 31 to 60 days | Delayed or stalled claims | Claim status inquiries |
| 61 to 90 days | Denials and payer disputes | Corrections, resubmissions, appeals |
| 91 to 120 days | Collection risk rising sharply | Escalation and supervisor review |
| Over 120 days | Approaching write off territory | Old AR recovery project |
The distribution across buckets matters more than the total. A practice with most of its AR under 60 days is healthy even with a large balance. A smaller balance concentrated past 90 days signals claims that will never be collected without dedicated recovery work.
Why AR Follow-Up is Critical for Healthcare Providers
Faster Payments
Proactive AR follow up helps identify delayed claims, resolve payment issues, and accelerate insurance reimbursements so practices receive payments sooner.
Fewer Denials
Timely claim reviews help identify errors, correct issues, and resubmit claims before filing deadlines expire.
Predictable Cashflow
Consistent AR management creates a more predictable revenue cycle by reducing payment delays and improving collections.
Less Bad Debt and Fewer Write Offs
Regular follow up prevents unpaid accounts from aging beyond recovery, helping minimize revenue loss and unnecessary write offs.
A Better Patient Billing Experience
Clear and timely billing communication reduces patient confusion and creates a better financial experience.
Audit Ready Documentation
Accurate claim tracking and documentation ensure billing processes follow payer requirements and support audit preparedness.
See how MedCare MSO can help clean up your aging accounts and increase reimbursements
A System for Tracking Claims Is Critical
Medical practices are losing up to 25% of their income due to unpaid claims, which is clearly unsustainable. Much of this is simply due to failing to resubmit or appeal claims that are denied or rejected and allowing them to expire.
Payers reject claims for the slightest error, including misspelled names and wrong dates. Ideally, claims are “scrubbed” to remove any errors before they are submitted, but mistakes may still happen. Aside from administrative errors, claims also get rejected or denied inappropriately for a number of reasons. It takes experience to be able to quickly determine what triggered a rejection and know how to resolve it, but it is important for any medical billing department to have A/R follow-up staff who know how to do it.
Medical Billing Software Is Key to Efficiency
Software is a critical part of effective medical billing, including accounts receivable. Medical billing software should include a feature that generates notifications and bills at appropriate intervals. For billing patients, 30, 60, and 90 days past due are typical; however, for dealing with payers, the timeline for follow-up can be much shorter and will differ depending on the type of issue being resolved.
It is well known throughout the collections industry that the longer a bill goes unpaid, the less likely it is to ever be paid. On top of that, every time a bill has to be addressed by staff, the cost of the collection goes up, so profit goes down. Getting claims and patient bills paid as soon as possible is vital to keeping revenue up and costs down.
Use Monthly KPIs to Monitor A/R Follow-up Management
Your monthly reports generated to monitor the success of your practice should include A/R key performance indicators (KPIs). At a minimum, this should include the amount in aging accounts compared to the amount billed and the number of days outstanding. If your A/R management practices are effective, you should see both those figures gradually decreasing.
It is also important to document the cause of rejected claims and payment delays and determine how to avoid a recurrence. For instance, you may find that a certain insurer is rejecting your claims because a contract has expired or was never completed, but you were never informed that there was a problem. If you had not documented each of the issues, the pattern would not be seen, and the real source of the problem not be corrected.
Other reasons for tracking down the cause of the problem could be that your staff may just not know about some new filing requirements, or a coder may have a misunderstanding of common service and be repeatedly miscoding that particular item. Taking the time to retrain staff on errors once can avoid many future recurrences of the error.
Also Read: Increase Revenue with Denial Prevention Rather than Denial Management
In order to have the depth of understanding necessary to be able to resolve denied claims, medical billers need to have years of experience in addition to their formal training, or they will not be able to find and resolve the issues or understand the payer’s objection so that they can provide the necessary additional information to get reimbursement.
How AI Has Changed AR Follow Up
Many accounts receivable departments spend the majority of time in payer portals and sitting in phone queues of insurers. This type of work can’t adapt itself to the modern world of claims volumes. The AI Claim Agent from MedCare MSO works 24/7 to check the payment status of claims, thus allowing for the notification of delays in a few days, rather than a report that incorporates delayed claims seen in the monthly aging report. AI Payment Posting matches payments to their respective contract rates and identifies missed underpayments in a way that a manual posting would not. In cases where appeals might be needed, the AI Appeals Manager pulls together the necessary documentation before deadlines run out. Finally, the bottom Reporting Process Automation layer watches for patterns in the work of insurers that create such delays, namely one insurance company failing to make payments for a certain type of claim.
When to Outsource AR Follow-Up?
When Outsourcing AR Follow Up Makes Sense For many new or growing practices, handling AR internally is costly and does not always produce results. Outsourcing AR follow up changes this situation. You will have a team of professionals specializing in receivable issues that are knowledgeable about payer policies and know how to deal with denials. Additionally, specialized teams are able to resolve claims more quickly than internal staff can because they do not have the same volume of responsibilities and therefore do not face workload limitations. In this way, the overhead will be lower than it would be in case you decided to hire and train your own employees. Finally, having outsourced AR follow up will help to improve your cash flow without taking employees away from their daily activities.
This is why outsourcing AR follow up to a professional medical billing service like MedCare MSO works so well. The AI handles the constant tracking while an experienced biller scrubs each claim for errors before submission and follows up on any issues until they are resolved. Your internal staff does not have time to dig through old claims and decode cryptic denial codes, but that is exactly what our team does all day. Give us a call at 800-640-6409 if you want a more efficient AR process, increased revenue, and less stress.
Frequently Asked Questions
What is the difference between AR follow up and denial management?
Denial management deals only with claims a payer has formally rejected. AR follow up covers every unpaid claim, including those that never received a response. A medical practice needs both, since strong denial management alone still misses claims that stalled without ever generating a denial code.
What is the difference between AR follow up and AR recovery?
The process of dealing with the currently outstanding claims as part of a standard billing is known as accounts receivable (AR) follow-up. AR recovery is a very specialized procedure that is meant to deal with the older claims, normally those that are older than 120 days, which have been neglected by the process of routine follow-up. Charges recovery includes appeals filing claims that are exceptions and escalation to payers.
How often should unpaid claims be followed up on?
This depends on the claim type and the payer. The electronic claim without a response should be followed by a status inquiry after about 2-3 weeks from the submission. As for the rejected claims, they need to be processed immediately as the limits for appeals are specific. As for expensive claims, they should be followed up on a weekly basis regardless of their age.
What happens to claim that pass the timely filing limit?
Most become uncollectible from the payer, though exceptions exist. If the practice can prove original timely submission, such as a clearinghouse acceptance report, an appeal can overturn the denial. Without that proof, the balance usually cannot be billed to the patient and becomes a write off.
Can MedCare MSO recover old AR left behind by a previous billing company?
Yes. The old AR recovery function of MedCare MSO is undertaken separately from the other daily billing processes, beginning with an aging analysis to identify accounts that can still be collected based on the payer’s filing requirements. Claims with viable avenues of appeal can be ranked according to their value, while accounts that have exhausted all avenues are simply written off.
Does MedCare MSO work inside our existing billing system?
Yes. The API integration layer works with the most well-known practice management and EHR systems so that the work is being done in your existing system. Claim status, remittance, and worklist information will flow without any need for software migration.
