Eastern Plumas Health Care had reason to celebrate as they closed the books on the month of July. Their AR (accounts receivable) days were down to 51, which for a small hospital with a large influx of Medi-Cal Managed Care patients, is a significant achievement. Accounts receivable days measures the average amount of time from the point when a bill comes in to the business office to the time the hospital is paid. Payment, not what is owed, is what matters. And, in a small hospital like EPHC, cash in the bank is critical to keeping the doors open.
According to Business Office Manager Aprel Martin, there was a period of transition with the new Managed Medi-Cal providers coming on the scene under the Affordable Care Act and, with it, a resulting influx of new patients. Initially, AR days went up. It took awhile for these insurance providers to get up to speed, said Martin. “We were calling them constantly and getting different answers every time.” Now, claims are coming through with very few errors that have to be corrected, she added.
Martin credits her business office team for an AR days’ average “well below the acceptable industry standard.” When asked if this truly corresponds to more money in the back, Martin responded, “Definitely. We collected $1.9 million for July to go with those 51 AR days.”
In contrast, AR days over 90 according to Martin indicates an increasing likelihood that money owed will never be collected. “It’s 50/50 after 90 days, and it gets worse every month after that.”
She credits her small, hard working staff for the Business Office’s success. “They’re all amazing, all very team oriented, and they work very well together. They’re diligent about making sure they’re doing their jobs to the best of their ability. Once again, it’s not me—it’s them.”