What is accounts receivable in medical field?

In the medical field, accounts receivable (AR) refers to the money owed to healthcare providers for medical services rendered to patients. It is an asset for the healthcare provider, as it represents the amount due from patients or their insurance companies for services provided on credit.

Key aspects of accounts receivable in healthcare:

Patient Billing: After a patient receives medical services, the healthcare provider generates a bill or statement that outlines the charges for the services provided. This bill is then sent to the patient or their guarantor (a third party who agrees to pay for the patient's medical expenses).

Insurance Claims: Many patients have health insurance that covers some or all of their medical expenses. In these cases, the healthcare provider submits claims to the insurance companies for reimbursement of the services provided. The insurance company reviews the claims and determines the amount they will cover, which is paid directly to the healthcare provider.

Copayments and Deductibles: Some insurance plans require patients to pay a copayment or deductible for their medical services. These amounts are paid directly to the healthcare provider by the patient. Copayments are usually a fixed amount, while deductibles are a specific amount that must be met before insurance coverage begins.

Follow-up and Collections: Healthcare providers have systems in place to follow up on unpaid patient balances and insurance claims. This may involve sending statements or contacting patients and insurance companies to resolve any outstanding payments.