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Why is AR Follow-up Important for Medical Billing and Coding?

Why is AR Follow-up Important for Medical Billing and Coding?


In this era, medical billing has become an emergent complicated issue in the healthcare industry. It requires special billing, coding, and Account Receivable (AR) management skills. The financial stability of healthcare organizations depends upon positive cash flow. It is also required to manage expenses required for managing costs incurred during patient care. The presence of trained coding and billing staff and following insurance guidelines can benefit from a smooth revenue cycle flow. However, sometimes, when everything goes smoothly still, many claims are denied or rejected and never reworked. Delay in filing the claim for reimbursement could be a fundamental reason. It happens during the loss of a paper claim instead of delivering electronically to an insurance company.

Furthermore, failure to follow up on the claim after 10 days of submitting the claim also turns out in the form of claim denials. That means several shares are unpaid on the doctor’s table every year. That could turn out in the form of a loss of many dollars for healthcare providers. The article will discuss why making AR follow-ups for medical billing and coding is essential.

Financial stability

Healthy cash flow requires the financial stability of the healthcare organization and practice. It is also essential for the day to day activities. Beneficial cash flow help in managing the cost of care and provide highly advanced service required to enhance patient care practices. Financial stability also contributes to organizational growth and helps doctors to ensure their economic well-being. The account receivable (AR) department takes care of all services available to patients, and they succeed in getting the best care from the healthcare facility.

Revenue maximization

Revenue is also known as the gross flow of fruitful economic activities. It happens when the inflow of ordinary activities accelerates the equity rather than expedites the share of equity contributors. The Account Receivable (AR) management team is responsible for following up the claims. Lack of enough information about the influences on revenue collection and expenses required to grow healthcare and attract more business could harm revenue maximization.

Cash flow

The present value of money is similar to the time value of money. Future cash flows are discounted at a rate of interest to compute the worth of future cash flows at present, i.e., money received in the future is not the same worth as received today. Late submission of medical claims could influence the cash flow. These medical claims could be rejected or denied and cause significant financial loss. That is why there is a need to address the rejected, denied, or unpaid claims promptly. Use electronic sources to swiftly submit medical claims so insurance companies pay them on time. It contributes to enabling the medical practice to operate effectively and have enough funds to run medical procedures smoothly.

Enhance communication

Follow-up of AR (Account Receivable) is also essential because it allows doctors and insurance companies to be available for the one to one communication. It also helps both parties negotiate on rejection, late reimbursement, and claim denials. Follow-ups also help to get faster resolutions and also contribute to establishing better relationships between healthcare providers and insurance companies.

Removal of billing errors

Medical coding and billing errors are the fundamental cause of claim rejection. When the AR (Account Receivable) team ensures regular follow-up against the submitted claim, these errors can be caught immediately and corrected. It also helps smooth medical claims, provides accurate and timely reimbursement, and reduces the claim rejection rate. In addition to it, due to the smooth processing of bills, patients will not receive duplicate accounts. It minimizes the dispute and optimizes the satisfaction of patients with healthcare providers.

Regulatory Compliance

Regular AR (Account Receivable) follow-up help to ensure that all bills are submitted accurately following the regulatory guidelines and policies. Medical billing and coding errors have less chance to affect claims processing. It also increases the workflow due to the early detection of issues in the medical claim and contributes to improving the efficiency of healthcare operations.


The rules and procedures that different companies adopt to present their annual financial performance in a structured way. To help the healthcare organization to monitor the performance of their revenue maximization, access cash flow, and prevention from claim errors, the healthcare organization needs to manage its AR (Account Receivable). It will help enhance the patient care facilities and ensure the financial stability of the healthcare providers. At the same time, it also helps healthcare organizations transform from unpaid or rejected claims to timely and appropriate reimbursements. Account Receivable (AR) is an integral part of medical billing. However, lacking skilled manpower won’t make medical organizations pay attention.


Who is the AR caller in medical billing?

An entity that calls insurance companies to know about the status of a medical claim so that they know about the balance in the accounts of patients. AR callers manage the AR (Account Receivable) by ensuring timely and accurate follow-ups.

Is billing a part of the AR function?

The responsibility of managing the inflow of cash is entrusted to the Accounts Receivable (AR) team who are in charge of handling various tasks such as generating invoices, collecting payments, processing deductions, and assessing credit risks. Their diligent work ensures that the company’s finances are in order and that all transactions are processed accurately and efficiently.

How do you define revenue expenses?

Revenue expenses are incurred to maintain the ability of the company to operate, such as salaries, rent, entertainment, printing, stationery, commission, etc., and these expenses are allowable in the year they are incurred for tax purposes.

What is the net present value?

The difference between cash and cash inflow is known as Net Present value. It is used to decide whether the investment should be made or not. If the NPV is positive, it means cash generated from the investment is more than the cost and vice versa, so investments are only made for those investments where NPV is positive.

What are the costs of relying on inaccurate cash flow forecasts from an AR account?

Relying on accurate cash flow forecasts from AR accounts will lead to precise liquidity plans and eventually damage business decisions. It causes an increase in the cash balance due to the threat of running out of money or too much spending payments of interest. It causes the accessible cash to be idle rather than using them for internal healthcare business operations. It increases the borrowing cost and bank fee due to the need for more trust in the bank numbers. Inaccurate cash flow forecasts affect the business’s decision-making ability, which also costs much money to the company. Erroneous cash flow forecasts also contribute to hive fraudulent activity due to needing an audit trail. The most serve effect of relying upon inaccurate cash flow forecasts is bankruptcy due to the inability to identify the cash shortfall.

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