Maintaining a healthy cash flow is one of the major challenges that every healthcare organization faces. Accounts Receivable is the most important Function for the smooth running of Hospital. It is very important for a Hospital to make sure that its Accounts Receivables are handled accurately and eliminate delays in receiving payments. Before we understand challenges and complications of Accounts Receivable in Healthcare, we have to understand Credit Patients categories in Healthcare system.

Healthcare System Discussion and Business Meeting Concept Art 3D

In Hospital, Most of the patients are credit Patients. Patients always prefer cashless facility except in case of Emergency situation , In most of the cases, Patient ignore hospital where cashless facility is not available in spite of good services and Medical care facility . So it becomes very important for a Hospital to get it empanelled with number of Panels to widen its Patients base. Broadly we can classify health care credit Patients in following Categories;

1. Patient on Panel of Government Agencies like CGHS , ECHS , ESI, State Government, Other Govt Agencies

2. Patient on Panel of Public Sector Undertaking

3. Patient on Panel of Private Corporate

4. Patient on Panel ofThird Party agencies

Ex-Servicemen Contributory Health Scheme(ECHS)

ECHS is a publicly funded Medicare scheme for those who are ex-servicemen and pensioners & their eligible dependents. The Central organization is headed by Managing Director, A serving Major General under the Ministry of Defence . ECHS is providing health care to approximately 52 lakhs ECHS beneficiaries through a chain of 28 Regional Centers and 426 ECHS Polyclinics, To widen the scope of Services and facilities to its beneficiaries, ECHS empanel various Private Hospitals to provide services on rate decided by ECHS .

ECHS beneficiaries has to consult doctor first in its ECHS parent polyclinic , Based on the medical condition either doctor disposes-off the case or refers for further treatment, They issue a referral Form mentioning referral number and basic detail of beneficiaries. This referral form is digitally signed by the Office in charge of respective poly clinic, On reaching the empanelled hospital ECHS Beneficiary present 64 kb ECHS card with referral Form which is verified by respective hospital through UTIITSL Portal and lock the claim id ( now no other empaneled hospital can use that referral number) . Hospital has to inform to ECHS polyclinic within 48 hours from the time of admission and submit the bill within 7 days of patient discharge . If a patient stays beyond 12 days , 30 days and 60 days it is necessary for the empaneled hospital to get approval on form Appx A , Appx B and Appx C respectively. Revised format of Form Appx A is also used for getting speedy approval for unlisted procedures / investigation / tests/ implants. For getting such approval ,Hospital has to send case summary, justifications of necessity of test , Necessary investigation reports , in case of Implants – the break up cost of each component is mentioned with contact detail of hospital specialist .

After discharge of Patient, the Empaneled hospital has to submit its claim with a final bill and complete investigation reports at In case of emergency treatment hospital has to forward patient bill for payment as per normal procedure to concerned polyclinic super-scribing “Emergency Treatment”.

CGHS Panel

The Central Government Health Scheme (CGHS) is a health care facility scheme for the existing and former employees of the Central Government of India and is managed by the Ministry of Health & Family Welfare through Special secretary and Director General and joint secretary. Presently approximately 38.5 lakh beneficiaries are covered by CGHS in 74 cities all over India. Dedicated set up is there to Manage CGHS Scheme. CGHS Health care facilities are provided through their own wellness center and facilities under Government hospitals. To widen the scope of Services and facilities to its beneficiaries, CGHS empanel Private Hospital to provide services to CGHS beneficiaries on rate decided by CGHS . Earlier CGHS is monitored through UTIITSL Portal but From 1st June-21 onwards CGHS has moved from UTI portal to NHA portal ( National Health Authority Portal).Now Existing IT- Infrastructure of NHA will be used for implementation , control and facilitating CHGS Patients.

Under the new system Patient walk in with AB PM-JAY ID and Aadhar number for admission, Hospital coordinator registers patients as IPD/ OPD based on diagnosis and initiates Pre-Authorization . On receiving the Pre-Authorization request from Hospital ,CGHS Panel Doctor asks for any query if required and makes Pre-authorization. Hospital initiates treatment. On discharge of Patient, Hospital submits discharge detail and final bill to claim the bills. Panel Doctor ask for any query or report if required and approve the claim which is forwarded to SHA ( State Health Agency ) to reimburses it to respective Hospital

Under the new structure the hospital has to Intimate & take pre-authorization approval through NHA portal. Without intimation & claim number Hospital can’t submit Patient Bill for payments.


Employees’ State Insurance is a public social security and health insurance fund for Indian workers.

The ESI Scheme is administered by a statutory corporate body called the Employees’ State Insurance Corporation (ESIC), when a company/firm/organization employs 10 or more persons, with individual wage/salary falling under the threshold limit of INR 21,000 per month , it is mandatory for him to register under ESI and to contribute 3.25% of the total monthly salaries/wages payable to its employees; while the eligible individual employees require to contribute only 0.75% of their individual monthly salary to the ESIC funds, every month of the year. Every worker is issued an ESIC Card. ESI Scheme provides full medical care in the form of medical attendance, treatment, drugs and injections, specialist consultation and hospitalization to insured persons and also to members of their families

At present, ESI has a network of 159 hospitals, 49 run by ESIC and 110 run by the state governments. Additionally, there is a network of 47 ESIC-run dispensaries and 1453 state-run ESI dispensaries. There are 13.24 cr beneficiaries under ESI . The Employees’ State Insurance Corporation (ESIC) has now allowed its beneficiaries to avail health services directly in any nearby private hospital in case of emergency within 10 km range without the need for referral from an ESI dispensary or hospital. Treatment will be cash-less in the empanelled private hospitals. Empanelled Hospital are reimbursed as per Central Government Health Services (CGHS) rates.

Ayushman Bharat

Ayushman Bharat Yojana, also known as the Pradhan Mantri Jan Arogya Yojana (PMJAY), is a scheme that aims to help economically vulnerable Indians having income of 5,00,000 per family per year in need of healthcare facilities. Over 10.74 cr poor and vulnerable families are covered across the country. No limit on family size and age of members. Household with no adult/male/ earning member within the age group of 16-59 years. Services under the scheme can be availed at all public hospitals and empaneled private health care facilities.

State Government Panel

Every State government have panel to provide best healthcare facilities to its Employees, Pensioners & their Dependents, (like Maharashtra- MJPJAY, Delhi Govt – DGEHS, Haryana Govt –HGHS, Rajasthan Govt – RGHS, Punjab- PGEPHIS, Himachal Pradesh- PGEPHIS etc) To widen the scope of services, these state government panel empanel Private Hospitals. The empanelment of private hospitals is done as per the state policy and is based on criteria like NABH certification, Scope of services, Number of beds ,Registration under “The Clinical Establishment Act” and PMJAY Ayushman Bharat Scheme, Fulfillment of all applicable laws/rules/regulations and possession of necessary licenses/ registrations/ certifications;

Healthcare Panel of Public Sector Undertaking and other Govt Agencies

Just like Central Government and State Government each PSU and Govt agencies like CRPF ,DDA, Delhi Police, BPCL,CBSE, CPCB, CIL, CSIR – NPL, Delhi High Court, DJB, DTDC, EPFO, ICAR, ITPO, MCD NCHMCT, NDMC, NFL, NIT, NOVODB, NPL, NPCC, NSG, NUEPA, NVS, RITES, SDMC, Northern Railways, Western Railway etc have its own panel for its employees, Pensioners & their Dependents . These PSU and Govt Agencies panel also empanel various private hospitals to widen the scope of medical services to its members.

Health Panel of Private Corporate

Private corporates tie up with various hospitals of its respective area to extend Medical care & Benefits to its employees, Pre/Post employment Health checkup, Employee injury , Doctor medical room, Nursing assistance etc. In healthcare agreement with Hospital, it is mentioned about Medical Benefits & discounts and fix rate to provide various medical care facilities to organization employees and their family members.

TPA Panel

TPA panels are used by General Public and Organizations for their employees. Currently, there are 30 insurance companies in India that offer health insurance products. Out of these, 25 are general insurance companies and 5 are standalone health insurance companies. These insurance companies Sell Health Insurance policies to the general Public. As per IRDA (TPA- Health Services) Regulations, 2001 Each such insurance company has to appoint a third-party administrator (TPA) to process health or other claims on behalf of insurers. TPA’s are licensed by the Insurance Regulatory and Development Authority of India. Currently there are 25 TPAs in India . These TPA acts as an intermediary between the insurer and the claimant and facilitates the settlement/processing of health insurance claims and provides a base level of service such as ID card production, claims adjudication, eligibility maintenance. When a policyholder requires medical treatment, the individual has to contact the TPA of the insurance company.

Accounts Receivable Challenges in Healthcare

In the Healthcare sector Account Receivable processes are little different from other industries. In normal course Receiver of Goods & Services pay the consideration. But in the case of the Health care sector, service is received by one party but payment is done by another party (Payer and Service Receiver are different if we exclude Cash patients) and it complicates the Accounts Receivable processes in Healthcare. In Healthcare it is assumed that if a claim is not settled within 90 days, the value of such claim is treated as 50% of its original value.

Hospital obligation does not complete just by curing and discharging the patients but Hospital has to submit complete documents, investigation reports, justifications related to Patient treatment and revert on so many queries to respective panel and it takes too long to get the payment from Panel. Each panel has its own guidelines, obligations and rates for various treatments for reimbursing the patient claim and the hospital has to adhere to all guidelines of each panel while submitting the claim.

Denial of Insurance claims is a major challenge in Healthcare. As per Industry Standards Denial rate is 4%. But if denial management process of a Hospital is inadequate, Denial rate may increase manifold and Hospital can lose its potential profits. Insurance companies often make deduction or deny claims for following reasons:

  • No intimation and preauthorization from panel at time of admission
  • No intimation in case of change of line of treatment and revised estimate
  • Wrong estimate to Panel , Patient or its Attendant,
  • Incorrect or irrelevant medical coding in medical Claim Form
  • In-complete/Missing line of activity and investigation reports
  • Selection of Wrong room charges, Wrong payer rate in bills
  • Late Filing of claim
  • No reply or late reply of Panel query
  • Duplicate submissions,
  • Uncovered procedure,

Effective way to Manage Account Receivable in Healthcare

To face aforementioned challenges in Healthcare, it is very necessary to be proactive, proficient and knowledgeable resources. Besides billing, TPA and collection team, Doctors and paramedical staff also play major role while preparing patient Claim Form like use of relevant and Correct coding by Doctor, complete line of activity in Patient File, Complete availability of Investigation Reports, correct justification for patient treatment, proper Discharge summary, Informing before changing the line of Treatment etc.

Hospital should give correct estimate to patient to avoid last time Surprise besides it Estimates should also get signed from the patient attendant to pay treatment charges in case penal refused to pay.

TPA desk should make Insurance eligibility verification and intimate to respective panel with correct estimate and get pre-authorization, In case there is any change in line of treatment , Again intimation should be sent with revised estimate.

TPA Desk should ensure Proper justification of medical treatment / Discharge summary and relevant and correct treatment coding while submitting patient claim form to Panel and claim should be submitted within prescribed timeline of respective panel. It is very necessary to review precisely each and every Claim Form prior to submission to the respective panel so that it can meet the guidelines of the respective panel.

While making billing to the patient, it should ensure that all lines of activities and investigation reports are there in the Patient file and correct payer rates are charged in the Patient invoice.

Billing team should ensure correct payer wise rates are updated in the billing system in coordination of IT Team.

Dedicated document management must be there to manage all patient files.

Hospitals should ensure to accept Payment in all suitable modes from patients.

Hospitals should make claim denials, analyze and Identify the root cause for claim rejection and should find proper solutions to eradicate future occurrence of such denials. There should be dedicated staff for queries reply within timeline of respective panel and Follow up on denied or appealed claims . They should maintain tracker for all claims and should Identify claims not received within normal timeline.

In healthcare it is the need of hours to have Aggressive collection culture .Accurate posting & settlement of payment is also an important activity to manage Accounts Receivable properly. Account team must reconcile its bank statements to verify that all the transactions are accurate and one has not missed any entry. Meanwhile accounts Team should make reconciliation on periodic basis.

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October 2021