A nursing home can be profitable on paper and still struggle to pay its bills.
The facility may have a strong census, steady admissions, and significant monthly revenue. Yet payroll feels tight. Vendor payments are delayed. Ownership is asked to contribute additional cash. The administrator hears that millions of dollars are “in AR,” but very little of that money is reaching the bank.
That is the difference between revenue and cash flow.
Revenue shows what the facility earned. Accounts receivable shows what it has not collected yet. Until that receivable becomes cash, it cannot be used to pay employees, purchase supplies, cover insurance, make debt payments, or invest in resident care.
For nursing home owners, CFOs, administrators, and billing managers, accounts receivable is therefore much more than a number on the balance sheet. It is one of the clearest indicators of whether the revenue cycle is working.
At Zeebra Group, we help nursing homes improve AR follow-up, reduce billing delays, resolve denials, and strengthen cash collections. Learn more about our support at Zeebra Group Services.
What Is Accounts Receivable in a Nursing Home?
Accounts receivable, commonly called AR, represents money owed to the nursing home for services that have already been provided.
That money may be owed by:
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Medicare
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Medicaid
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Medicare Advantage plans
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HMO plans
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MLTC plans
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Medicaid managed care plans
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Commercial insurers
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Hospice providers
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Secondary insurers
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Residents
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Families or responsible parties
Not every AR balance is in the same condition.
Some claims were submitted recently and are moving normally through the payer’s system. Others are denied, missing authorization, waiting for Medicaid approval, underpaid, on hold, or assigned to the wrong payer.
This is why a facility cannot judge its financial health by looking only at total AR. Leadership must understand what makes up the balance and how likely each category is to convert into cash.
How Accounts Receivable Affects Cash Flow
Cash flow measures the money entering and leaving the facility.
A nursing home must continuously pay for:
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Payroll
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Benefits
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Agency staffing
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Food
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Pharmacy and medical supplies
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Utilities
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Insurance
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Therapy and ancillary vendors
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Rent or mortgage
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Software
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Transportation
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Maintenance
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Taxes and professional services
Most of those expenses are due on a predictable schedule. Payers, however, do not always pay on a predictable schedule.
When claims remain in AR, the facility has already incurred the cost of providing care but has not yet received the related cash.
That timing gap can force the organization to:
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Use a line of credit
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Delay vendor payments
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Postpone capital improvements
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Reduce discretionary spending
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Ask ownership for additional funding
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Limit hiring
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Carry higher financing costs
A facility with $2 million in AR does not necessarily have $2 million available. It has $2 million that still needs to be collected, corrected, appealed, verified, or reconciled.
Why Nursing Home AR Is Especially Complex
Nursing home accounts receivable is more complicated than standard business invoicing because resident coverage can change during a stay.
One resident may begin under Medicare Part A, move to private pay, and later qualify for Medicaid. Another may be enrolled in Medicare Advantage and require continued authorization. A long-term resident may change MLTC or Medicaid managed care plans. Hospice may become involved. Secondary billing may apply after the primary payer processes the claim.
Each transition creates a new opportunity for delay.
The billing team must manage:
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Eligibility
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Payer sequencing
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Authorizations
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Covered dates
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Census changes
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Resident responsibility
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Claim submission
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Denials
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Payment posting
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Appeals
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Secondary billing
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Collection follow-up
If even one part of that process fails, AR grows.
AR Aging and Why It Matters
An AR aging report groups unpaid balances according to how long they have been outstanding.
Typical aging buckets include:
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0–30 days
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31–60 days
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61–90 days
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91–120 days
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More than 120 days
A balance in the first 30 days may be completely normal. A claim over 90 or 120 days usually requires closer attention.
As accounts age, several risks increase:
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Appeal deadlines may be missed
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Timely filing periods may expire
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Supporting records become harder to locate
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Employees may forget prior conversations
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Payer contacts may change
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Responsible parties become harder to reach
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Collection probability decreases
Old AR is not automatically uncollectible, but it usually requires more time and effort to resolve.
The Main Types of Nursing Home AR
Medicare AR
Medicare AR may include unpaid claims, rejected claims, coverage questions, benefit-period issues, consolidated billing problems, or claims requiring correction.
These accounts should be monitored for:
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Claim acceptance
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Payment status
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Medicare coverage dates
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Patient responsibility
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Secondary billing
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Adjustment and denial codes
Medicaid AR
Medicaid AR may involve active claims, eligibility issues, payer sequencing, resident responsibility, incorrect billing information, or state-specific claim requirements.
Medicaid balances should be separated from Medicaid-pending accounts because the collection path is different.
Medicaid-Pending AR
Medicaid-pending AR represents services provided while the resident’s Medicaid application is unresolved.
These balances can grow quickly. Every pending account should have:
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An application date
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Current status
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Missing-document list
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Responsible person
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Follow-up date
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Estimated effective date
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Current balance
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Next action
“Still pending” is not an adequate AR note.
Managed Care, HMO, and MLTC AR
Managed care claims often require authorization, plan-specific billing procedures, payer portals, appeals, and contract review.
These balances should be tracked by plan because each payer may have different:
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Timely filing rules
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Authorization processes
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Appeal deadlines
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Claim requirements
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Payment rates
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Escalation contacts
Private-Pay and Resident Responsibility AR
Resident balances may include private-pay charges, Medicaid patient responsibility, Medicare coinsurance, deductibles, or noncovered services.
These accounts require clear statements, early family communication, payment arrangements, and documented collection activity.
How Poor AR Management Creates Cash Flow Problems
Claims Are Submitted Late
Every day a claim sits unbilled is another day the facility waits for payment.
Claims may be delayed because of missing documentation, payer uncertainty, authorization problems, census errors, or staffing shortages.
The facility should maintain a claims-on-hold report showing:
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Dollar amount
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Reason for hold
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Person responsible
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Next action
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Resolution deadline
Denials Are Not Worked Quickly
A denied claim does not become cash until someone takes action.
Denials should be reviewed by:
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Payer
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Dollar amount
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Reason
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Appeal deadline
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Root cause
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Employee owner
The goal is not only to correct the account. It is to prevent the same denial from happening again.
Payments Are Posted Incorrectly
Incorrect payment posting can make AR reports misleading.
A payment may be posted to the wrong account. An underpayment may be adjusted away. A denial may remain hidden. Secondary billing may not be triggered. Resident responsibility may be assigned incorrectly.
Payment posting should identify:
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Amount paid
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Adjustment reason
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Denial reason
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Contractual obligation
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Patient responsibility
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Underpayment
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Recoupment
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Remaining balance
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Required next action
Underpayments Are Missed
A paid claim is not always a correctly paid claim.
Managed care plans may pay below the expected rate because of contract interpretation, level-of-care errors, partial authorization, or payer processing mistakes.
If the remaining balance is automatically adjusted, the facility may permanently lose collectible revenue.
How to Improve AR and Strengthen Cash Flow
Review AR Every Week
Nursing homes should not wait until month-end to review accounts receivable.
A weekly AR meeting should focus on:
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High-dollar balances
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Claims over 60 and 90 days
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Denials
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Claims on hold
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Medicaid-pending accounts
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Managed care appeals
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Underpayments
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Resident balances
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Payer escalations
Every account discussed should leave the meeting with a named owner and next action.
Separate AR by Payer and Problem Type
A large total AR number is not operationally useful.
Separate balances by:
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Payer
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Aging
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Denial status
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Authorization issue
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Eligibility issue
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Appeal status
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Medicaid-pending status
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Underpayment
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Resident responsibility
This allows leadership to see where cash is getting stuck.
Prioritize High-Dollar and High-Risk Accounts
Staff should not work every account in the same order.
Priority should be given to:
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High-dollar balances
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Claims approaching deadlines
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Claims over 90 days
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Authorization-related denials
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Medicaid-pending cases
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Repeated payer problems
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Underpayments
Assign Clear Ownership
Every AR category needs an owner.
For example:
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One employee handles Medicare
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Another handles Medicaid
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Another follows managed care plans
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A designated person tracks Medicaid pending
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Payment posting staff flag underpayments
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Management handles escalations
When responsibility is unclear, balances remain untouched.
Key AR Metrics Nursing Homes Should Track
AR Days
AR days estimate how long it takes the facility to collect revenue.
An increasing trend may point to delayed billing, payer problems, denials, or weak follow-up.
AR Over 90 Days
This shows the amount of revenue becoming harder to collect.
Clean Claim Rate
This measures how many claims process without rejection or denial.
Denial Rate
This shows how frequently payer problems interrupt payment.
Claims on Hold
This represents revenue that has not yet entered the payer’s payment cycle.
Medicaid-Pending Balance
This shows the facility’s financial exposure from unresolved applications.
Underpayment Amount
This shows the difference between expected reimbursement and actual payment.
Cash Collected
This measures what actually reached the bank, not only what was billed.
The Role of AR Reporting in Management Decisions
A useful AR report should do more than list balances.
It should help leadership answer:
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How much money is unpaid?
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Which payers owe it?
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How old is it?
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Why has it not been collected?
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What action has already been taken?
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Who owns the account?
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What is the next deadline?
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How much is at risk?
Owners and CFOs use this information to forecast cash, plan payroll, manage debt, evaluate staffing, and determine whether billing performance is improving.
An AR report without clear actions may look professional, but it does not help manage cash flow.
How Zeebra Group Helps Improve Nursing Home AR
Zeebra Group helps nursing homes and long-term care facilities strengthen accounts receivable and revenue cycle performance.
Our support can include:
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AR follow-up
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Denial management
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Claims-on-hold review
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Medicaid billing
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Medicaid-pending tracking
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HMO and MLTC billing
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Prior authorization tracking
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Payment posting review
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Underpayment identification
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Claims cleanup
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Payer escalation
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Management reporting
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Billing department support
Strong AR management is not about making more collection calls. It is about identifying why each account remains unpaid and moving it toward resolution.
Learn more at Zeebra Group Services.
Conclusion: AR Is the Bridge Between Revenue and Cash
Accounts receivable is where nursing home revenue either becomes cash or becomes a problem.
A facility may earn substantial revenue, but if claims are delayed, denied, underpaid, or poorly followed, that revenue cannot support daily operations.
Strong AR management gives leadership control. It shows what has been billed, what has been paid, what remains outstanding, why it remains outstanding, and what must happen next.
For nursing home owners, CFOs, administrators, and billing managers, improving AR means more than lowering a number on a report. It means improving liquidity, reducing borrowing pressure, paying obligations on time, and creating greater financial stability.
If your facility needs help reducing aging AR, resolving denials, improving collections, or strengthening billing workflows, Zeebra Group can help.
Contact Zeebra Group to discuss how we can support your nursing home accounts receivable and cash flow.
FAQ
What is accounts receivable in a nursing home?
Accounts receivable is money owed to the nursing home for services already provided. It may be owed by Medicare, Medicaid, managed care plans, insurers, residents, or responsible parties.
How does AR affect nursing home cash flow?
AR affects cash flow because the facility has already incurred the cost of care but has not yet collected payment. High or aging AR can create payroll, vendor, and financing pressure.
What causes nursing home AR to increase?
Common causes include late billing, wrong-payer claims, missing authorizations, Medicaid-pending delays, denials, underpayments, inaccurate payment posting, and weak collection follow-up.
How often should nursing homes review AR?
Nursing homes should review AR at least weekly. High-dollar balances, claims over 60 or 90 days, denials, Medicaid-pending accounts, and managed care balances require regular attention.
Which nursing home AR metrics matter most?
Important metrics include AR days, AR over 90 days, clean claim rate, denial rate, claims on hold, Medicaid-pending balance, underpayments, and actual cash collections.
Does Zeebra Group help nursing homes manage AR?
Yes. Zeebra Group helps nursing homes with AR follow-up, denial management, Medicaid billing, managed care claims, payment posting review, underpayment identification, and revenue cycle reporting. Learn more at Zeebra Group Services or contact our team.