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8 Areas of AR Management


The overall goal of the AR management is to achieve the shortest collection period as possible. Accounts receivables, also known as patient accounts, refers to revenues generated but not yet collected. To ensure cash flow is sufficient for effective management, the medical office has the responsibility to maximize its revenue potential.

Accounts Receivable (AR) management involves nearly all areas of the medical office. Successful accounts receivable management requires a full understanding of how each area or department relates to and influences the revenue cycle and the AR collection period. The eight areas include:

  1. Legal Concepts
  2. Contract Negotiation
  3. Compliance
  4. Patient Rights
  5. Patient Access
  6. Charge Capture
  7. Health Information Management
  8. Patient Financial Services
Legal Concepts

Legal concepts include understanding and following state and federal regulations. The area that has always been of the most concern is fraud and abuse especially with regard to Medicare, Medicaid, and other federally funded programs.

Fraud generally refers to willfully and knowingly billing medical claims in an attempt to defraud any federally funded program for money. The most common forms of fraud and abuse include billing for equipment never provided, billing for services never performed, upcoding charges to receive a higher reimbursement rate, and unbundling charges. The Office of Inspector General (OIG) has designed and issued special fraud alerts to the health care provider community. These alerts were intended to publicize the national trends of fraud to the general public. It is also a way to provide insight and awareness on fraudulent practices within the industry and address violations specific to the Medicare and Medicaid Anti-Kickback Law.

Contract Negotiation

Contract negotiation involves developing a financial relationship with managed care organizations. Managed care organizations represent up to 50% of the net revenue of most medical offices.

Negotiating managed care contracts requires comprehensive knowledge of the contracting process. This generally includes reimbursement rates, effective and termination dates, claim filing guidelines, payment terms and other contract provisions.

Each medical office contract negotiation strategy will be unique based on various factors but these basic ideas should be kept in mind:

  • Know the market: Do you know what percent of your market has Medicare, Medicaid, Cigna, Blue Cross Blue Shield, Aetna, United HealthCare or uninsured? A market survey provides valuable information required of all contract negotiations.
  • Be realistic: Understanding the managed care environment including the various payment methods, will provide you with a basis of information necessary to take a realistic approach in negotiating.
  • Hire a consultant: Many organizations rely on consulting services to provide managed care contracting negotiation due to the complex nature of contracts and the legal aspects involved.

Legal counsel should be consulted on all contract issues when there are considerable and various exposures to the organizations or when contract issues are beyond the scope of the expertise of medical office leadership.


Developing a compliance program involves establishing a written manual describing the compliance policy and the Medical Office Code of Conduct.

Most medical office compliance policies include both ethical and legal concepts. The OIG (Office of Inspector General) offers these seven components that provide a solid basis for a medical office compliance program.

  1. Conducting internal monitoring and auditing;
  2. Implementing compliance and practice standards;
  3. Designating a compliance officer or contact;
  4. Conducting appropriate training and education;
  5. Responding appropriately to detected offenses and developing corrective action;
  6. Developing open lines of communication; and
  7. Enforcing disciplinary standards through well-publicized guidelines.
Patient Rights

The US Office of Personnel Management identifies three major objectives for the development and utilization of Patient Rights.

First, to strengthen consumer confidence by assuring the health care system is fair and responsive to consumers' needs, provides consumers with credible and effective mechanisms to address their concerns, and encourages consumers to take an active role in improving and assuring their health.

Second, to reaffirm the importance of a strong relationship between patients and their health care professionals.

Third, to reaffirm the critical role consumers play in safeguarding their own health by establishing both rights and responsibilities for all participants in improving health status.

There are eight key areas related to patient rights within the medical office.

  1. Patient information: patients have the right to accurate and easily-understood information about their health plan, health care professionals, and health care facilities.
  2. Choice of providers: patients have the right to choose health care providers when they need it.
  3. Access to emergency services: patients have the right to emergency medical treatment regardless of their ability to pay.
  4. Informed consent: patients should only consent to medical treatment if they have sufficient information about their diagnosis and all treatment options available in terms they can understand.
  5. Respect and non-discrimination: patients have the right to considerate, respectful care from all health care professionals and not be discriminated against in the delivery of services.
  6. Confidentiality: patients have the right to private communication and to have the confidentiality of their individually identifiable information protected.
  7. Complaints and appeals: patients have the right to a fair and efficient resolution of any complaint made to the medical office.
  8. Patient responsibilities: patients have a number of responsibilities to the medical office including active participation in their treatment plan, timely resolution of their financial obligation and respectful interaction with all staff.

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