Bill Sample / December 8, 2018 / Lessie Larson
Days in Accounts Receivable (DAR) A growing number of days in accounts receivable are symptomatic of a faulty billing process. One way to determine DAR is to count days from the date of service to the date of payment for every claim and then average across all claims. A simpler way to compute average number of days in accounts receivable by taking a ratio of accounts receivable to average daily charges or Number of days in accounts receivable = (Accounts Receivable / Average Charge) x 365 This metric too depends on medical specialty patient demographics payer mix and CPT sample. Another downside is that this metric is sensitive to provider as it counts the lag time of unsubmitted claims for services already delivered.
It may be expected as when someone retires or it may be unexpected but you need to have a plan in place for when the relationship ends. It will be a much better parting of ways if you have a plan of action for how things will be handled. The whole reason for a good contract is to protect you but your contract can do much more than protect. You can weed out potential problem providers that will drive you crazy. If you are not in agreement with your providers on what each of you will be contributing to the relationship then the likelihood of the account going smoothly is very small. Dont make the mistake of skimping on an important part of your business that may save you from defending yourself in court down the road.
If you dont include the responsibilities of each party in the contract how does it protect either of you when the relationship starts to fall apart? And if neither party knows their responsibilities how can you expect that the relationship will work? Here is an example. You specify in the contract that it is the obligation of the providers office representative to supply you with all the payment remittances but you are not getting them which is causing you to do a lot of extra work in contacting the insurance carriers to check status on claims that were already paid. It is upsetting to spend three or four hours calling insurance companies to find that the claims were paid but the doctors office missed sending you the eobs.