So you have just accepted a position at a practice as a billing manager. Where do you begin? The very first question you should be ask is “where are we from an AR (accounts receivable) perspective?” In order to make that determination, you must answer a variety of questions:

• What are the AR days? What is contributing to that number?
• How many dollars are there in the greater than 120 day bucket? What’s being done to clean that out? What are your oldest accounts and why is it still there?
• What is the normal turn-over process? Is the process working?
• Is there a small balance write-off policy? How many accounts have balances of less than $10? How much of that is co-pays?
• What is the policy for front-end collections? How much is billed in co-pays vs. collected on a monthly basis? Is there room for improvement?
• What are the contracts with payers? Can these contracts be improved?

With the knowledge these questions can bring you, an effort can be undertaken to clean up and keep clean a producing AR. It’s still all about the cash.

Then of course, after you have a detailed picture of the practice AR, you need to look at what the cost of maintaining AR is now. There are two big costs in billing: Personnel and technology. A thorough knowledge of the cost of each will help you to know what the potential is for cost reduction. Technology is an important component of billing.

The practice management system virtually controls all of the aspects of registration, scheduling, billing and collections. This is the life blood of every practice. Even if not familiar with the specific system, you should be able to ask the same questions of any system. How they perform the tasks may be different, but they all do the same thing. If you do not have the expertise of the system, start talking to who in the practice does. This person should be your best friend initially. You will want to know all the options the system offers and why the practice has chosen the options they have chosen.

Don’t make big changes until you know the status of AR. A new manager’s first responsibility is to know what they know. Find the answers to your most pressing money questions first.