Case Study: Reducing AR Days from 42 to 25 through Strategic AR Optimization

Introduction: The Challenge of Aging Receivables

In today’s healthcare revenue cycle, high Accounts Receivable (AR) days can cripple a practice’s cash flow and signal inefficiencies that go beyond billing. For one midsized multi-specialty group practice in the Midwest, AR days had crept up to an unsustainable 42 days. Despite steady patient volume and experienced in-house billing, the organization was struggling with delayed reimbursements, denied claims, and excessive follow-ups. Cash flow was inconsistent, and the administrative staff was overwhelmed.

Enter NetRevMed, a revenue cycle management (RCM) firm with a reputation for reducing AR backlogs and increasing first-pass resolution rates. Over the course of four months, NetRevMed partnered with the practice to implement a customized AR optimization strategy. The result? AR days plummeted from 42 to just 25 days, and monthly collections improved by 28%.

Assessment and Discovery: Diagnosing the Real Problems

The first step in the partnership was a deep-dive AR analysis conducted by NetRevMed's AR specialists. Using historical claims data, denial patterns, payer behavior analytics, and workflow assessments, they uncovered three primary issues:

• Denial Volume and Root Causes: Approximately 18% of claims were being denied on the first submission. Most denials stemmed from missing documentation, invalid codes, and prior authorization errors.
• Rejection and Scrubber Bypass: Claims were being submitted without clearinghouse-level scrubber validation, resulting in 6% of claims being rejected outright before reaching the payer.
• Fragmented Workflow: Coding, charge entry, and AR follow-up teams were operating in silos, leading to miscommunication, delayed rework, and lack of ownership of denied claims.

Strategic AR Optimization Framework

NetRevMed MedBilling implemented a structured optimization plan that targeted the root causes while reinforcing best practices in coding and claim management. The key pillars of the initiative included:

1. Denial Root Cause Analysis and Prevention

NetRevMed created a denial management dashboard that categorized every denial by CPT, ICD, payer, and denial code. Weekly reviews uncovered trends such as frequent denials (documentation lacking) from commercial payers and CO-197 (missing authorization) from Medicare Advantage plans.

To combat this:

• Pre-bill checklists were introduced to ensure necessary documentation and authorizations were attached.
• Coders were retrained to capture diagnoses with greater specificity and to avoid commonly bundled CPT pairs.
• Denial feedback was routed back to providers in real-time with suggested documentation corrections.

The denial rate dropped from 18% to under 6% within five months.

2. Rejection Management and Scrubber Enhancement

The company implemented a powerful clearinghouse scrubber tool with payer-specific edits that flagged errors before submission.

• Automated validation of demographic mismatches and policy number accuracy.
• Real-time integration with the EHR to capture missing charge data.
• Logic-based alerts to identify codes requiring modifiers or supporting notes.

Rejection rates fell by 70%, and the claim acceptance rate on first submission hit 97%.

3. Unified Coding and AR Workflow

One of NetRevMed's biggest game-changers was the creation of an integrated workflow where coders, billers, and AR teams worked in a single environment with transparent communication.

• Daily stand-up huddles to triage denials and rejections.
• Shared dashboards to monitor claim aging and status by responsible team.
• Real-time chat and tagging features in the billing software to reduce resolution delays.

The result was an 80% reduction in claim touchpoints, which directly impacted turnaround time.

4. Intelligent AR Follow-up Protocols

Rather than the traditional date-based follow-up (e.g., 30 days post submission), NetRevMed deployed a dynamic AR follow-up matrix:

• High-dollar claims were tagged for follow-up within 10 days.
• Claims with denials were reassigned for same-week resolution.
• Payers with long adjudication cycles were followed up via electronic status check rather than manual calls.

Combined with a digital tracker and task assignment system, the AR team was able to double its productivity without adding headcount.

5. Continuous Feedback and Improvement Loop

NetRevMed didn’t treat AR optimization as a one-time fix. Monthly reviews with the provider's leadership ensured continued alignment. Metrics like Days in AR, denial rate, and cash collected per visit were tracked and presented via a live dashboard.

Coding audits were performed quarterly, and AR staff were continuously updated on payer policy changes. Providers received monthly documentation improvement reports.

Results After 6 Months

• AR Days: Reduced from 42 to 25 days
• First-pass resolution rate: Increased from 82% to 96%
• Denial Rate: Dropped from 18% to 5.8%
• Monthly Collections: Increased by 28%
• Claim Rework: Decreased by 63%

Conclusion: Building a Long-Term AR Advantage

This case study demonstrates the transformative power of strategic AR optimization. What made the difference was not just technology or outsourcing, but a systematic approach that combined root cause analysis, intelligent workflow design, and constant feedback.

For practices overwhelmed by aging AR and shrinking margins, this story illustrates that with the right RCM partner and a willingness to refine internal processes, remarkable improvements are possible.

NetRevMed continues to work with the provider group today, with AR days consistently hovering between 23 and 26. Their relationship is now one of strategic partnership—proof that effective AR management is more than collections; it's a pillar of sustainable financial health.