Many providers are not performing any type of month end close. A month end close allows providers to reconcile and report on their charges, payments and adjustments for a month. For a healthcare provider, this can be a challenging task. Medical billing is complicated and reconciling all of the transactions for a month won’t happen without creating a good workflow for the process.
Why Are Healthcare Providers Not Closing Their Month?
One reason healthcare billing is hard to close is due to the software that we use. Medical Practice Management Software wasn’t necessarily created with bookkeepers in mind. For example, we’re often able to post outside of the current month or make as many adjusting entries as we would like, with little audit trail ability. We almost always require running a separate system to perform the month end close.
Another issue is obtaining all of the charges, payments and adjustments to close the month. Healthcare providers can get behind in documentation, holding up the submission of their medical billing. This can happen especially with the billing charges. What often needs to happen is reporting charges for the month end by entry date, rather than date of service. Unfortunately, this doesn’t always give the exact picture we’d like to see, which is the actual medical billing production for a particular provider in a month.
How Do We Start To Perform a Month End Close?
I recommend starting a month end close by getting a beginning Accounts Receivable Balance for month end. Once you have your Accounts Receivable Balance, you can start doing the math.
Beginning Accounts Receivable Balance
+
Total Billing Charges
-
Total Payments Received
-
Total Adjustments Posted
-
Refunds Paid
=
Ending Accounts Receivable for the Month
Print reports and make sure you’ve balanced, and bam! You closed your month!