Question

1- What is the definition of accounts receivable? What are some primary reasons patients are sometimes not billed in a timely manner?

2- How does accounts receivable differ from the revenue cycle?

Answer 1

1- Account receivable is the money owed to a company by its debtors. It is largest current asset and deserves special attention. Three factors set the healthcare industry apart from most other industries with regard to accounts receivable:

1. The nature of the services provided,
2. The cost of the services provided and
3. The method of payment for the services provided.

Inadequate or incorrect information gathered at this stage is the single greatest reason for not billing or collecting accounts receivable in a timely manner.

1- Difference between Accounts receivable and Revenue Cycle

Account receivable is money due to organization from patients and third parties for services that the organization has already provided. Revenue cycle is a multidisciplinary approach to reducing the amount in account receivable by effectively managing the production and payment cycle