Below we discuss how the accounts receivable industry looked in 2022.
According to High Radius’ “The State of CFO’s Office – A Mid-Market Perspective 2022” report, of the Chief Financial Officers (CFOs) interviewed:
- 33% will automate their invoicing.
- 33% will automate cash applications and reconciliations.
- 32% will automate their collections.
- 63% said that AR automation was important to keep pace with their competitors, avoid obstacles to their ability to deliver customer service, limit the potential for AR teams to work remotely, and hurt their ability to attract and retain talent.
Justin Bentley of Citizens Bank (interviewed by Orbograph) identifies scale, revenue growth, and gross margins as the three key factors/drivers that investors use to evaluate companies in healthcare– Revenue Cycle Management.
- 26% of health plans have not implemented fully electronic payments.
- 57% plan adoption of electronic remittance advices.
- Only 22% of health plans receive attachments in a fully electronic manner.
- 8% of hospitals and health systems have what they consider to be a fully optimized enterprise resource planning (ERP) system in place today.
- Real-time healthcare bill payments and disbursements are projected to reach over 70 million in 2022. this increase is due to its convenience, efficiency, and safety.
CAQH’s Reports Also Noted:
- As remote work increased, many medical and dental staff became more reliant on the use of electronic transactions to conduct business.
- Spending associated with medical eligibility and benefit verification increased 16 percent and remains the highest among the transactions, accounting for almost half ($18.3 billion) of the total annual medical spend ($37.4 billion).
- The increase in automation resulted in time savings for medical providers. Providers saved, on average, 16 minutes by conducting a prior authorization.
Accounts Receivable (A/R) status has moved from calls to portals.
- About 23 million Americans have unpaid medical debt.
- Days in receivable and bad debt will increase.
Prognocis adds that late payments are a fact with medical accounts receivable, with 93% of companies reporting they deal with late payments.
- Receivables lose significant value over time, up to 80% of their original value if overdue past 90 days.
- On average, companies write off 1.5% of their receivables as bad debt.
- PWC found that 68% of CFOs surveyed planned to increase their investment in digital transformation by the end of 2022.
- According to Mastercard’s Business Payments 2022 report, 50% of B2B payments are still made via paper check.
- 66% of businesses have adopted electronic payment acceptance solutions since the start of COVID-19.
- More than 80% of businesses have changed their A/R processes since the start of the COVID-19 pandemic.
- 64% of companies have shifted away from physical invoices and started utilizing electronic invoice presentment and payment (EIPP) capabilities.
- Days in receivables are expected to increase by 10%.
- More healthcare organizations are using chatbots to engage patients, customers, and support teams.