DHA 8007 Week 6 Assignment Accounts Receivable Management

DHA 8007 Week 6 Assignment Accounts Receivable Management Student Name Capella University DHA8007 Strategic Financial Management in Health Care Professor Name Submission Date   Accounts Receivable Management The AR analysis days are crucial in evaluating the financial performance of the healthcare setting. The comparison of 2022 AR management of Westside Clinic showed improved results compared to 2021, when the AR management required 58 days to accomplish the required tasks in 59.2days. The AR management showed a positive tendency in 2022, and further reduction of the days is needed in the future to increase the cash flow. The analysis of the AR should inform financial leaders to make sure that healthcare facilities operate normally (Antysheva et al., 2020). During the evaluation, detailed information about the strategic evaluation, the financial trends in a long-term perspective, and risks of poor AR management is delivered. In addition, the trends that impact the revenue cycle and have an effect on the organisation strategy, patient outcome, and community health are provided. Strategic Assessment Financial analysis of the AR assisted in determining the mean days it takes to collect the receipts for the healthcare services. Based on the data analysis in 2021-2022, AR days declined to 58, which optimised the cash flow and financial stability of the organisation as they fell to 59.2. The strategic analysis is based on the three methods of cutting the AR days. The three alternatives to reducing the AR days are the use of technology, denial management system, and predictive analytics. Firstly, the implementation of artificial intelligence (AI) technology was to automate billing and collection processes (Nasution et al., 2020). The machine learning algorithm as a financial analysis tool would shorten the time of SCO and fasten the payments, lowering the AR days.  Secondly, the management of denials was done to reduce the chances of claim declines and rejections (Chaudhuri et al., 2022). This is where a pre-investigation done prior to the claims would mean that there would be no erroneous claims that would cause denial. Improvement in the settlement of claims reduces claim reprocessing, and the AR cycle time is reduced. Thirdly, predictive analytics is applied throughout the revenue management cycle (RCM) to determine possible payment issues to avoid AR delays (Chaudhuri et al., 2022). The analytics came in handy in future payment prediction of the RCM system. Gathering data to determine the ratio of patients who have received care contributed to the ability to assess revenue and resulted in proactive decisions, which enabled the decrease in the AR growth in healthcare facilities. Plan for Managing Risk The organisational environment risks in the process of collecting AR receivables are the disruption of the cash flow and the extra bad debts. More AR days are held as working capital; capital that can be utilized to traffic or engage in other productive activities. Receivables extension above 120 days affects the profitability of an organisation (Laghari and Ahmed, 2023). To start with, the verification system will be put into practice to confirm the patient’s insurance prior to the healthcare services. Pre-verification will help in reducing the number of rejections on claims. Secondly, monthly analysis of the denials shall be given to assess the common issues, such as coding mistakes or lack of information involved. Third, the AI technology will automatically submit claims, track their status online, and receive updates on the receivables. The technology helps to minimize the chance of human error and offers key information to optimize the process of collection and financial forecasting. Furthermore, patient knowledge will be enhanced, too, preventing payment issues, which applies to the on-time retrieval of the AR and removes delays. Strategic Assessment to Monitor Days in AR AR needs to monitor days, which will assist in the simplification of the cash flows and financial performance of the organisation. Monitoring of AR days in Westside Clinic will be critical to reduce the delays in collection, loss in revenues, and general financial stability of the organisation. The AR days ratio is used to denote the number of days between which a healthcare organisation receives billed amounts turned into cash (Antysheva et al., 2020). Therefore, monitoring days assessment in AR is necessary because the fewer AR days, the faster the collection and, consequently, the hospital is capable of cash management. The three strategies with which healthcare providers can monitor the AR days are key performance indicators (KPI), predictive analytics, and AR tracking tools. Firstly, AR tracking applications are financial apps, which are displayed as interface dashboards with days in AR, time in the AR, and payer performance (Arora et al., 2024). The messages in the tracking instruments also assist in determining the cases where the AR days are exceeding the deadline. The real-time monitoring devices will therefore be employed to help the staff respond to the AR problems in a proactive fashion and make the collection more efficient. Secondly, KPIs help the healthcare provider to define the main objectives of the AR management. The comparison between the hospital-related data on the AR days and national and regional benchmarks helped to identify the days that were used to clear AR (Komarraju et al., 2024). The percentage of over ninety-day receivables and the percentage of claims paid out in the first thirty days are some of the KPIs. Thirdly, predictive analytics will be utilized to identify possible payment delays (Antysheva et al., 2020). The AR days can be minimized using predictive analytics, which will identify the accounts where the clearance of payment is likely to become an issue. Inclusion of predictive analytics in the RCM will help the healthcare provider monitor the mean days on AR in healthcare facilities. Pros and Cons The advantages of the adoption of AR analytic tools, KPIs, and predictive analytics are the decrease in the AR days through enhancing the cash flow. Tracking tools eliminate manual efforts, whereas real-time dashboards help in speeding up the decision-making process compared to AR management (Arora et al., 2024). In addition, automated notifications would also come in handy in terms