What effect do paper claims have on cash flow?

Paper claims typically slow cash flow for several reasons. When healthcare providers submit claims using paper forms, the process is often lengthier compared to electronic submissions. Paper claims require manual handling, which introduces the potential for errors, delays, and the need for resubmissions if issues arise.

Because of the additional time involved in processing these claims, from mailing to manual data entry, payments from insurance companies can take longer to be received. This not only delays the time it takes for a practice to receive reimbursement but can also lead to more challenging accounts receivable management. In contrast, electronic claims are processed much more quickly, leading to an accelerated cash flow for practices that utilize them effectively.

Overall, the inefficiencies associated with paper claims directly contribute to a slower cash flow, impacting the financial stability of healthcare practices.