How do I manage accounts receivable for a medical practice?
Medical practice AR is more complex than typical business receivables because you’re collecting from two sources: insurance companies and patients. Each requires different processes and different timelines, and dropping the ball on either one leaves money on the table.
Insurance verification happens before the patient is seen. Confirming coverage, understanding what the plan pays, and knowing the patient’s deductible status prevents claim problems later. Front desk mistakes during registration create AR headaches that take months to untangle.
Clean claims get paid faster. A clean claim has accurate patient demographics, correct CPT and ICD-10 codes, proper modifiers, and all required documentation. Claims with errors get rejected or denied, adding weeks to your payment cycle. Most practice management systems flag common errors before submission, but someone needs to review flagged claims before they go out.
Follow up on unpaid insurance claims systematically. Commercial payers typically have 30 to 45 day payment windows. If a claim hasn’t been paid or denied within that timeframe, call or check the payer portal. Track denial reasons because patterns reveal fixable problems. If a specific payer keeps denying claims for the same reason, that’s a coding issue or a missing authorization process, not bad luck.
Patient balances need their own workflow. After insurance pays, bill the patient for co-pays, deductibles, and uncovered services. Send statements promptly and follow up on unpaid balances. Many practices focus all their energy on insurance and let patient AR age for months. By the time they get serious about collections, patients have forgotten the visit happened.
Run aging reports weekly and review them. Your aging report shows what’s outstanding and for how long. The older a receivable gets, the less likely you’ll collect it. Medical practices should aim for less than 50 days in AR on average. If you’re at 70 or 80 days, something in your process is broken.
Your practice management system needs to reconcile with your accounting software. AR in the billing system and AR on your books should match. When they don’t, someone is posting payments incorrectly or making adjustments without documentation. This creates problems at tax time and makes it impossible to know what you’re actually owed.
Many practices in Los Angeles County work with a bookkeeper familiar with medical practice operations because the complexity justifies outside help. When you consider how much revenue sits in unpaid claims at any given time, having someone manage the accounts receivable process properly pays for itself.
LA's Small Business Bookkeeper
The Next Step:
A Short Conversation
Tell us about your business and what you're dealing with. We'll listen, ask a few questions, and give you a clear price for the work.
More Questions
What are the consequences of commingling client funds in my law firm?
Commingling client funds can result in State Bar discipline up to and including disbarment, criminal charges if funds are misused, civil liability for breach of fiduciary duty, and lasting reputational damage.
Read answerWhat are common IOLTA compliance mistakes law firms make?
The most frequent IOLTA violations involve commingling funds, negative client balances, and skipping monthly three-way reconciliation. These mistakes often stem from poor documentation and lack of written trust account procedures.
Read answerWhat financial documents do buyers want to see when purchasing a business?
Buyers typically request three years of profit and loss statements, tax returns, balance sheets, bank statements, and aging reports. They're verifying the seller's claims and looking for consistency, trends, and red flags.
Read answerHow do I prepare my financials to sell my business?
Buyers pay for what they can verify. That means separating personal expenses from business costs, reconciling all accounts, preparing consistent financial statements for the past two to three years, and documenting everything that supports your numbers.
Read answerWhat bookkeeping software integrates with Clio for law firm accounting?
QuickBooks Online is the primary accounting software that integrates directly with Clio. The integration syncs invoices, payments, and time entries between systems, though trust accounting still requires careful manual oversight.
Read answerHow do I manage cash flow for my real estate investment business?
Separate your accounts, build reserves for vacancies and repairs, and track income and expenses at the property level. Real estate cash flow is unpredictable, so planning for timing gaps between rent collection and major expenses keeps you stable.
Read answer