Insights on Healthcare Accounts Receivable Management Services
Running a healthcare organization today means living with a constant tension: you are asked to deliver more complex care under tighter reimbursement rules, while your cash flow depends on claims that may not pay for 30, 60, or even 120 days. When Accounts Receivable starts to age, it does not just show up as a line on a balance sheet. It shows up in payroll stress, delayed vendor payments, and hesitation about expanding services you know your community needs.
Healthcare Accounts Receivable management services exist to relieve that pressure. When they are done well, they connect day‑to‑day billing work with the strategic realities of Medicare PPS, PDGM, PDPM, and hospice reimbursement. When they are done poorly, they produce a lot of activity and very little movement in Days in AR.
In this article, we take a practical look at what effective AR management should accomplish for healthcare providers, how Medicare’s payment systems shape the work, and how to evaluate whether outside support can realistically move the needle for your organization.
Why Healthcare AR Is Different From Other AR
Every business waits for payment, but healthcare AR has a complexity that most industries never touch. A single claim can cross multiple sets of rules: federal Medicare, state Medicaid, Medicare Advantage or managed care, and commercial payers, each with its own edits, timelines, and documentation requirements. That complexity increases every time CMS adjusts a payment system.
For example, skilled nursing facilities operate under the SNF PPS and PDPM. CMS finalized a 4.2 percent net increase in SNF PPS rates for fiscal year 2025, tied to a revised 2022 market basket and updated wage index methodology. That sort of change affects not just your revenue projections but also how you prioritize follow up on high‑acuity, higher reimbursement PDPM stays in your AR workqueue (CMS FY 2025 SNF PPS final rule).
Home health agencies face similar complexity under PDGM. The Calendar Year 2026 Home Health PPS final rule includes a 2.4 percent payment update that is more than offset by permanent and temporary negative adjustments tied to behavioral assumptions under PDGM, leading to an estimated 1.3 percent net decrease in aggregate home health payments for 2026 (CMS CY 2026 HH PPS final rule). That environment puts even more pressure on clean claims and low Days in AR, because every avoidable denial or delay is happening against a backdrop of reduced rates.
Hospice providers are managing their own set of moving targets. The FY 2025 hospice payment update increases rates by 2.9 percent and raises the aggregate cap, while adopting updated wage index area definitions that can shift local reimbursement patterns (CMS FY 2025 hospice final rule). Looking ahead, CMS has proposed additional wage index and regulatory clarifications for FY 2026 (CMS FY 2026 hospice proposed rule fact sheet). Each of these updates can create small shifts in documentation patterns, timing of NOEs, and payer behavior that ultimately show up in AR aging.
All of this means that strong AR management in healthcare is not just about collecting money. It is about translating evolving payment rules into daily billing habits and denial prevention strategies.
What Effective AR Management Services Actually Do
Healthcare Accounts Receivable management services are often described in generic terms: “follow up,” “denials,” “cash flow improvement.” To evaluate whether a partner can meaningfully improve your AR, it helps to understand the core elements that should be present behind those labels.
First, there is the mechanical work of AR: claim status checks, resubmissions, appeals, and adjustments. That work matters, but on its own it is not enough. Without analytics and root‑cause analysis, AR staff can work very hard and still chase the same types of problems month after month.
Effective AR management services bring together several capabilities. They start with a structured review of your existing aging, not just by payer and age bucket, but by denial reason, revenue impact, and recoverability. They look for trends in RAP/NOA timing in home health, PDPM case‑mix coding in SNFs, and hospice NOE or certification issues that correlate with write‑offs or chronic delays. They identify whether your biggest opportunities sit in timely filing, in medical necessity documentation, or in basic claim completion.
From there, they build targeted workflows. This is where specialization matters. Home health RAP/NOA issues call for different workflows than Medicaid home care EVV mismatches. Hospice AR related to NOE cancellations and late elections requires coordination between clinical teams and billing that looks very different from addressing SNF PDPM diagnosis coding.
Strong AR services also tie their work directly to measurable outcomes. Reduced Days in AR is the most visible metric, but it is not the only one. Providers should be seeing improvements in net collection rate, denial overturn rates on appeal, and the percentage of claims paid on first submission. Leadership should see these metrics in a format that supports decision making rather than in a stack of spreadsheets.
The Role of PPS, PDGM, and PDPM in AR Strategy
Because Medicare PPS rules drive such a large portion of post‑acute and home‑based care revenue, AR management cannot be separated from an understanding of those systems. Each payment model has its own pressure points that show up in AR.
In SNFs, PDPM’s five case‑mix components and reliance on ICD‑10 coding and functional scoring mean that documentation gaps can quickly translate into lower reimbursement and coding‑related denials. CMS has been refining PDPM code mappings, as reflected in the FY 2025 SNF PPS final rule, so AR teams need to understand when a denial or short payment reflects a correct but unfavorable case‑mix outcome versus a fixable documentation or coding issue (CMS FY 2025 SNF PPS final rule).
In home health, PDGM’s 30‑day payment unit and case‑mix structure have been accompanied by a series of downward payment adjustments as CMS reconciles assumed provider behavior with actual practice. The CY 2026 HH PPS final rule implements a permanent adjustment of negative 1.023 percent and an additional temporary adjustment of negative 3.0 percent that directly reduce the 30‑day base payment rate (CMS CY 2026 HH PPS final rule). In that context, AR services need to focus not only on recovering older balances but also on preventing revenue leakage within each 30‑day period, including LUPA risks and missed visit documentation that can trigger payment reductions or denials.
For hospice agencies, a fixed per‑diem rate model with an aggregate cap creates a different AR profile. Payment is less about individual service line items and more about eligibility, timely NOEs, correct election statements, and visit documentation that supports levels of care. As CMS implements tools like the HOPE instrument in place of the Hospice Item Set and refines wage index definitions, agencies will see changes in how quality reporting and geography interact with payment over time (CMS FY 2025 hospice final rule). AR services for hospice must be sensitive to both claim‑level issues and those broader structural constraints.
Across these settings, the connection is consistent. Every change in PPS rules changes the profile of your AR risk. An AR partner that is immersed in PPS, PDGM, and PDPM is better positioned to see those risks early and help you respond with updated workflows and staff training.
Aligning AR Management With Your Care Setting
Although healthcare AR has common themes, each setting has its own operational realities. A one‑size‑fits‑all AR approach tends to miss these nuances and can create friction with clinical operations.
Home care and Medicaid waiver providers live with complex state rules, managed care authorizations, and EVV requirements. AR problems often start not at claim submission but at the point of scheduling, where a visit is delivered outside an authorized window or EVV data is incomplete. In these settings, effective AR services integrate with scheduling and EVV systems, build pre‑billing checks for authorization and visit completeness, and track denials by plan and service code to highlight patterns.
Home health agencies face intense documentation and timing requirements around OASIS, face‑to‑face encounters, and physician orders. Under PDGM, even modest deficiencies can shift cases into lower paying groupings or increase audit exposure. AR management in home health should include front‑end clinical documentation review and close monitoring of how PDGM case‑mix decisions correlate with denials and ADRs. When CMS recalibrates PDGM weights, LUPA thresholds, and functional impairment levels, as it has done for CY 2026, those changes need to be reflected in both coding practices and AR prioritization.
Hospice agencies balance per‑day payments with end‑of‑life care that is unpredictable by definition. Late NOEs, election statement errors, and certification documentation gaps can lead to complete nonpayment for periods of care that were resource intensive. AR management services that understand hospice workflows can help refine admission and recertification checkpoints so that eligibility, documentation, and NOE submission are aligned before billing ever starts.
Skilled nursing facilities manage PDPM, consolidated billing, and a mix of Medicare, Medicaid, and managed care payers. Their AR profiles tend to be highly segmented by payer, with different denial patterns in each segment. AR services that understand how PDPM interacts with therapy, nursing, and NTA components can help facilities see which denials point to legitimate documentation issues and which signal opportunities to appeal or re‑code appropriately.
The common thread is alignment. AR management should be tailored to how your teams deliver care, document services, and interact with payers, not just to the generic mechanics of calling payers and re‑billing claims.
Why Accounting Expertise Matters in AR Management
While billing teams live in the details of claims, an accounting perspective keeps the bigger financial picture in view. That perspective is especially important as payment models evolve and margins tighten.
When AR services are backed by a full accounting firm, there is a natural bridge between revenue cycle work and financial reporting. AR aging is not examined in isolation. It is understood in relation to Days Cash on Hand, debt covenants, and capital planning. Leadership reporting can move beyond raw aging schedules to show, for example, how a spike in Medicare Advantage denials is affecting projected cash over the next 90 days.
This connection also helps ensure that AR clean‑up efforts translate into sustainable improvements rather than one‑time gains. Recovering old balances is helpful, but if the work does not address underlying root causes, AR will quickly re‑age. Accounting‑informed AR services treat process changes as part of internal control improvement. They look at where documentation, authorization, and billing workflows intersect and help leadership decide where to invest limited training and technology resources.
In a broader policy environment where Medicare is pursuing site‑neutral payment policies and tightening price transparency rules, providers are under increasing pressure to demonstrate efficiency and value (Washington Post summary of CMS payment policies). AR management that ties directly into financial planning gives organizations clearer options about service lines, partnerships, and strategic growth.
What To Look For in an AR Management Partner
Choosing an outside AR partner is ultimately about trust. You are handing over the work that funds your organization. To decide whether a partner is the right fit, it helps to focus on a few practical questions.
You will want to know whether they understand your specialty at the level of daily workflow, not just at the level of regulations. Ask how they handle PDGM in home health, PDPM in SNFs, or hospice NOE and aggregate cap concerns. Listen for answers that reference specific processes, such as pre‑billing reviews, use of analytics to track denial trends, and coordination with clinical teams.
You should also look closely at their approach to assessment. Effective services typically begin with a structured AR review that segments your aging by payer, denial reason, and collectability. The findings from that assessment should translate into a clear implementation plan, including who will handle which parts of the revenue cycle, what metrics will be reported, and what timelines are realistic for seeing movement in Days in AR.
Communication is another critical area. You and your leadership team should have access to regular, understandable reports that connect AR performance to your financial goals. Equally important is having direct access to a dedicated billing specialist who knows your agency and can answer detailed questions without sending you through a call tree.
Finally, evaluate how a partner measures and reports results. While no firm can guarantee outcomes, they should be prepared to define success metrics with you and to show, over time, whether their work is improving clean claim rates, denial trends, and cash collections in a way that aligns with your broader financial strategy.
Connecting AR Management to Long‑Term Stability
At a time when Medicare payment updates for home health, SNFs, and hospice reflect both modest rate increases and targeted reductions, AR performance is a lever providers can still control. Tightening days in AR, reducing denials, and increasing first‑pass payment rates will not solve every financial challenge, but they can create breathing room when margins are under pressure.
The most effective healthcare Accounts Receivable management services do more than chase old balances. They help you understand where your revenue cycle is leaking, how PPS and related payment models are changing the risk profile of your claims, and what practical steps you can take to align billing with your mission of patient care.
When AR work is grounded in specialty‑specific knowledge, backed by accounting expertise, and communicated clearly to leadership, it becomes a stabilizing force rather than a constant source of anxiety.
If you are ready to explore whether specialized AR management could support your organization’s financial health, click the button below to schedule a time to chat.
Appendix: Sources
CMS: Fiscal Year 2025 Skilled Nursing Facility PPS Final Rule
CMS: Calendar Year 2026 Home Health PPS Final Rule
CMS: Fiscal Year 2025 Hospice Payment Rate Update Final Rule
