By Lemuel Areglo, CPC | Director of Revenue Cycle Management Services
Key Takeaways
- Unresolved denials, infrequent A/R reviews, and aging patient balances can significantly impact cash flow. By the time these issues become apparent, financial health may already be compromised.
- Many denials are avoidable. Issues such as eligibility gaps, coding mistakes, and incomplete information can be addressed before claims are submitted, provided you have effective verification and scrubbing processes in place.
- Parents who are informed of their financial responsibilities upfront tend to pay more promptly and have fewer disputes. Unexpected bills can lead to dissatisfaction and reduced patient retention.
- Collections challenges develop gradually. By the time they are recognized, the practice’s cash flow may already be adversely affected.
This guide addresses common reasons for stalled collections and provides actionable workflows to address them. Navigate to the section that is most relevant to your current challenges — each segment is designed to function independently.
Table of Contents
Identifying Barriers to Effective Collections
The core issue: lack of ownership over the entire billing process.
Front desk staff may assume billing will handle eligibility issues, while billing relies on complete clinical documentation. This disconnect can lead to claims falling through the cracks, resulting in unpleasant surprises when A/R reports are reviewed.
Pediatric practices face unique challenges. Billing for pediatric services differs significantly from other specialties. A general billing team may lack the specialized knowledge required to identify pediatric-specific errors before claims are submitted, leading to compounded issues.
Common issues include:
- Eligibility verification failures — If insurance is not confirmed before the visit, claims may be sent to the wrong payer or denied outright, resulting in delays.
- Documentation gaps — Inadequate clinical notes can lead to payer rejections, as they will not assume medical necessity without clear justification.
- Coding inaccuracies — Incorrect CPT or ICD-10 codes can result in underpayment or denial, requiring specialized knowledge that generalist billers may not possess.
- Lack of follow-up procedures — Claims can age without proper tracking, leading to missed timely filing deadlines and unrecoverable losses.
Establishing an Effective Denial Management System
Denial management should be a proactive system, not merely a reactive cleanup task.
Preventing Denials Before Submission
Most denials can be avoided. The primary reasons — missing information, eligibility issues, and coding errors — can all be identified before claims are submitted. Ensure insurance eligibility is verified prior to each appointment, not just at check-in. Confirm payer details, plan type, copay, deductible status, and any prior authorization requirements, and document this information thoroughly.
Utilize claim scrubbing tools before submission to catch missing modifiers, bundling issues, and frequency limit violations. If your billing software does not provide this functionality, you risk sending out claims that are likely to be denied.
Identifying Denials Promptly
When a denial is received, it should be routed for review on the same day. Every hour it remains unaddressed brings you closer to missing timely filing deadlines. Categorize denials by reason code — eligibility, authorization, coding, documentation, or duplicate — and monitor for patterns. If one provider has a higher denial rate, it may indicate a documentation issue; if a specific payer denies more frequently, it could signal a contract issue.
Resolving Denials Within 48 Hours
Aim to resolve denials within 48 hours of receipt. If a denial cannot be addressed at the first level, escalate it immediately. Document the resolution steps for each denial type to ensure staff are not reinventing the process with each occurrence.
Effective A/R Follow-Up Strategies
The reality is that reviewing A/R on a monthly basis is insufficient. Genuine follow-up should occur weekly, prioritizing claims based on age and dollar amount.
The likelihood of collection diminishes significantly as claims age. Claims under 30 days have a collection probability above 95%, while those over 120 days may drop below 50%. Each week of inaction moves you further down this curve.
A straightforward weekly routine:
- Day 1 — Review claims aged 0–30 days. Confirm receipt and ensure claims are being processed.
- Day 2 — Address claims aged 31–60 days. Contact payers for any claims with no activity and document each call.
- Day 3 — Escalate claims aged 61–90 days, as they are nearing critical age.
- Day 4 — Take aggressive action on claims over 90 days. Check for timely filing deadlines to prevent losses.
- Day 5 — Follow up on patient balances and initiate conversations about payment plans.
KPIs to track:
Metric
Target
Days in A/R
Under 35
A/R over 90 days
Under 15% of total
Clean claim rate
95%+
Denial rate
Under 5%
Identifying Delays in Claims Processing
Inefficiencies in billing often stem from role confusion or errors during the intake process.
When one individual manages registration, eligibility, charge entry, and follow-up, accountability diminishes. It is essential to separate front-end tasks (registration, eligibility, authorization) from back-end tasks (coding, billing, A/R management). This separation is crucial, even in smaller practices.
Another significant issue is inaccurate data collected during intake. Incorrect insurance IDs, demographic errors, and missing authorization numbers can lead to claim failures later in the process, especially when the visit is weeks old and documentation is less reliable.
Advanced EHR systems can provide AI-powered intake platforms that enhance intake accuracy and alleviate front desk bottlenecks, ultimately reducing the occurrence of data errors that hinder claims processing.
Verify information before the appointment:
- Patient demographics
- Active insurance coverage and effective dates
- Copay, deductible, and coinsurance status
- Prior authorization (if required)
- Estimated patient responsibility communicated to the parent
Submit claims daily rather than in weekly batches. Daily submissions allow errors to be identified while the encounter is still fresh, and they help catch clearinghouse rejections early — a rejected claim will not be in the payer’s queue at all.
Strategies for Patient Collections
With the rise of high-deductible plans, patient financial responsibility has increased significantly. Collecting these amounts requires a different approach than collecting from payers.
The key factor is not merely the design of your statements, but the conversations you have with parents prior to the visit. Parents who understand their financial obligations upfront are more likely to pay promptly and have fewer complaints. Conversely, those who receive unexpected bills are less likely to pay and may not return for future visits.
Collect copays at check-in. Send statements within a week of claim adjudication. Offer convenient payment options such as online payments, phone payments, text-to-pay, and payment plans for larger balances. Parents who have options are more likely to utilize them.
A suggested outreach schedule:
- Statement sent on day 0 (post-adjudication)
- Reminder sent on day 30 (statement + email or text)
- Phone call made on day 45
- Final notice sent on day 60 with a payment plan offer
- Consider collection actions on day 90
Document every attempt. A thorough paper trail is essential if an account eventually goes to collections.
Quick-Reference Checklists
Pre-visit
- Demographics verified
- Eligibility confirmed
- Benefits documented
- Authorization obtained (if required)
- Patient informed of estimated costs
Claim submission
- All fields complete
- Diagnosis codes support medical necessity
- Procedure codes match documentation
- Modifiers applied correctly
- Claim scrubbed
Denial management
- Denial identified within 24 hours
- Reason code categorized
- Resolution initiated within 48 hours
- Appeal filed (if applicable)
- Root cause logged for pattern tracking
Patient collections
- Copay collected at time of service
- Statement sent within 7 days of adjudication
- 30-day reminder sent
- 45-day phone outreach attempted
- Payment plan offered before day 60
The Integration Challenge Many Practices Overlook
Much of the inefficiency in billing arises from issues related to handoffs rather than personnel. When clinical documentation, practice management, and billing operate in separate systems, data must be re-entered, leading to errors and missed charges.
Pediatrics-Cloud integrates all three functions into a single platform. When a provider completes an encounter, billing processes begin immediately with complete clinical context — no need for exports, manual entries, or gaps in information. For practices looking to enhance their efficiency, Pediatrics-Cloud Billing Services offers dedicated specialists who understand pediatric billing, adhere to a weekly A/R cadence, and identify denial patterns before they escalate into revenue issues.
If your in-house billing team is struggling with increasing volumes, rising denial rates, or staff turnover that disrupts continuity, it may be time to consider outsourcing as a viable solution.
The workflows outlined above are effective. The question is whether your current setup can support them. If it cannot, it may be time for a thorough evaluation.
Talk to our billing team for a FREE billing analysis.
Lemuel Areglo, CPC
is the Director of Revenue Cycle Management Services at WRS Health, bringing nearly 15 years of experience leading medical billing, coding, credentialing, and revenue cycle operations across the healthcare industry. Lemuel’s expertise spans the full revenue cycle, including claims management, denial resolution, payment posting, accounts receivable, and practice operations. He has extensive experience supporting specialties including pediatrics, psychiatry, physical therapy, pain management, internal medicine, orthopedic surgery, speech therapy, and sleep medicine.
