Why You Should Outsource Accounts Receivable Management for Hospitals

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Out of all the various types of medical practices and facilities, accounts receivable management is likely to be the most complicated for hospitals.

The reason for this is two-fold. The first reason is that every field of medicine has its own sub-set of complex medical codes that apply specifically to the conditions that it treats, but a hospital usually deals with most of them, so medical billing for a hospital becomes extremely complicated and requires very experienced billers in order to have someone familiar with the codes for less-common procedures.

The second thing that makes accounts receivable management more challenging for hospitals is the increased amount due from patients.

Many specializations have alternative treatments available and may be able to delay treatment until the patient can afford it, but hospitals deal with urgent situations that can’t be delayed and deliver services to those who can’t afford treatment elsewhere. Treatments that involve overnight stays and extensive (and therefore expensive) procedures take place in the hospital, so the ultimate balance due can be very high.


Not only does medical billing for hospitals include submitting claims to insurers and government payers, and the associated work of appealing rejected and denied claims, but there is a large component of collecting balances from patients who often can’t pay them off, resulting in large numbers of accounts receivable balances and ongoing payment plans to collect on.


Outsourcing hospital billing to a professional medical billing company has proven to be the most effective and cost-efficient way to deal with accounts receivable, as well as other aspects of revenue cycle management. With the codes changing every year, insurers changing plans, and payers changing regulations, it is impossible for hospital staff to stay on top of it all.


A dedicated medical billing company only focuses on medical billing and RCM, allowing them to keep up with the changes, design practices to maximize payments for services performed, and focus on tracking claims and getting payments—while the medical facility can get back to focusing on patient care.