5 Metrics Every Senior Living Operator Should Track for Better Accounts Receivable Management
Accounts receivable (AR) management is a top priority for senior living operators. A well-managed AR process not only ensures smooth cash flow but also enhances family satisfaction and trust. However, AR management in the senior living industry comes with its unique challenges—from complex billing to delayed claims reimbursement.
Tracking the right metrics, such as Days Sales Outstanding (DSO), Accounts Receivable Turnover Ratio, and Average Days Delinquent (ADD), can help senior living operators identify trends, predict potential late payments, and prioritize collections efforts. This blog outlines five key metrics that every senior living operator should monitor to streamline AR processes, improve efficiency, and reduce financial stress. Plus, we’ll showcase how technology like Sunbound's can revolutionize your AR management system.
1. On-Time Payment Rate
Why it Matters
Timely payments are the backbone of financial stability in senior living communities. Late payments can lead to cash flow issues, delayed operational updates, and added stress for staff. A high on-time payment rate ensures predictability and steady capital to run operations efficiently.
How to Measure It
To calculate your on-time payment rate, follow this simple step:
Divide the number of payments you made on time by the total number of payments you were supposed to make, then multiply the result by 100 to get the percentage:
On-Time Payment Rate (%) = (On-Time Payments ÷ Total Payments Due) × 100
Strategies to Improve
Implement Electronic Billing and Online Payments: Transition from traditional paper billing to electronic systems that allow customers to pay online easily. Flexible payment portals and the ability for families to schedule pay-over-time plans can contribute to prompt payments.
Define and Communicate Clear Payment Terms: Explicitly state payment terms, due dates, accepted payment methods, and any penalties for late payments on all invoices and contracts.
Offer Incentives for Early Payment: Consider offering discounts for early payments to encourage customers to pay on time, improving cash flow.
2. Billing Accuracy
Why It Matters
Accurate billing is crucial for building trust with families and ensuring smooth operations. Consistent, error-free invoices foster confidence and reduce disputes, while errors can lead to delays, revenue loss, and frustration.
How to Measure It
Track billing accuracy rates and monitor the frequency of disputes or corrections. Measure the time it takes to resolve errors and assess the impact on revenue retention and family satisfaction.
Strategies to Improve
Automate Cash Application: Use automation to match incoming payments to open invoices, streamlining the reconciliation process and minimizing manual intervention. Sunbound’s Billing QA Tool uses machine learning to cross-reference clinical data, lease agreements, and billing systems. This proactive approach identifies discrepancies before invoices are sent, improving accuracy and reducing costly errors.
Make Payments Easy and Convenient: Offer multiple payment options, including online payment portals that allow customers to pay easily and quickly.
Enhance Communication: Maintain consistent and transparent communication with customers regarding their account status, invoices, and payment requirements.
Resolve Disputes Promptly: Have a clear and structured process for handling disputes and deductions to maintain customer relationships and ensure timely payment.
3. Claims Reimbursement Rate
Why It Matters
For communities accepting Medicaid or Medicare, denied claims directly impact revenue. Every unreimbursed claim is lost income, making high claims reimbursement rates essential for maintaining financial health.
How to Measure It
Track your claims reimbursement rate by monitoring the percentage of successfully reimbursed claims versus total submitted claims. Regularly review denied claims and identify patterns or recurring issues.
Strategies to Improve
Simplify Claims Management: Adopt an efficient claims management system to streamline submissions, track follow-ups, and manage appeals with ease. Implementing an electronic billing system, like Sunbound, ensures that submissions are always on time.
Reduce Claim Denials: Mistakes can happen even with advanced tools like Sunbound, so it’s essential to review denied claims carefully. Identify the root cause—whether it’s a coding error, missing documentation, or eligibility issue—and make necessary corrections.
Speed Up Reimbursements: Implement faster and more efficient reimbursement processes to minimize payment delays and ensure timely payments to employees or vendors. This not only improves cash flow but also boosts trust and satisfaction among stakeholders by reducing unnecessary waiting periods.
Leverage Data Analytics: Billing is not just about submitting claims; it’s also about analyzing performance and improving processes over time. Sunbound's reporting tools provide actionable insights by tracking key metrics like claim approval rates, submission timelines, and common denial reasons. Analyze denial patterns with data tools to identify trends and take proactive steps to improve reimbursement rates.
4. Staff Time Saved
Why it matters
Manual AR processes, like chasing payments and resolving disputes, drain valuable staff time—time that could be better spent on resident care. For senior living operators, inefficient workflows mean more administrative burdens and less focus on delivering high-quality care. By automating repetitive AR workflows, your team can save an average of 20 hours per month.
How to measure it
Track the hours your team spends on AR tasks each month, such as payment follow-ups, correcting errors, and claims management. Identify how these time-consuming processes impact your team's ability to prioritize resident-focused responsibilities.
Strategies to improve
Automate Invoicing and Payment Reminders: Use software to generate and send invoices promptly upon service delivery, set up automated reminders for upcoming and overdue payments, and process incoming digital payments automatically. Sunbound's automated payment solution reminds families of due dates without manual follow-up, and has demonstrated 99% improved average on-time payment rate for senior living operators.
Enhance Reporting Processes: Generate detailed, accurate reports with streamlined reporting tools. Automated reports save significant time on data collection and analysis, giving your team the insights they need to make informed decisions.
Focus on What Matters Most: Automation tools free up your team to prioritize building stronger relationships with patients and delivering outstanding care, rather than being bogged down by administrative tasks.
5. Family Satisfaction
Why It Matters
Transparent and flexible payment options directly impact family satisfaction. Billing disputes or inflexible schedules can harm relationships and tarnish a community’s reputation. Satisfied families are more likely to advocate for your community, driving better word-of-mouth referrals and long-term financial stability.
How to Measure It
Track family satisfaction through feedback surveys and retention rates. Monitor billing dispute resolutions and the usage of payment portals to gauge the effectiveness of your payment processes.
Strategies to Improve
Flexible Payment Portal: Provide families with a flexible payment portal that allows them to schedule payments in a way that best suits their financial situation. By offering options like customizable payment plans, recurring payments, or the ability to choose specific due dates, you can make the process more convenient and less stressful for families.
Dedicated Support Line: Set up a dedicated support line exclusively for payment-related concerns. This ensures that families can quickly and easily get assistance when they have questions or encounter issues. A responsive and empathetic support system can go a long way in building trust and reducing frustration.
Feedback-Driven Improvements: Regularly collect feedback from families to identify areas for improvement in the payment process. Use surveys, focus groups, or direct communication to understand their needs and pain points. Addressing these gaps will help enhance their overall experience and ensure your payment system remains user-friendly.
The Role of Technology in Optimizing AR Management
Senior living operators face unique challenges in AR management, but tracking key metrics can help. Focusing on on-time payment rates, billing accuracy, claims reimbursement rates, staff time saved, and family satisfaction ensures smoother processes and happier stakeholders.
Manually tracking these metrics or using outdated systems is time-consuming and error-prone. That’s where Sunbound can help.
Sunbound’s automated tools provide:
Advanced analytics for real-time metric tracking.
Billing QA tools powered by machine learning to catch errors.
End-to-end claims management to maximize reimbursements.
Streamlined workflows to save staff time.
User-friendly payment portals to boost family trust.
With the right tools and metrics, AR management in senior living becomes easier, improving efficiency and satisfaction for all.
