Unbilled accounts: how to control open accounts in a hospital
An account that has not been billed is revenue the hospital already produced and has not yet charged. The longer it sits, the higher the risk of a denial or write-off.
Unbilled accounts are accounts for completed encounters that have not yet been sent to the payer. Also called open or pending accounts, they are revenue the hospital already produced, with cost already incurred, that has not yet become a charge. The longer they sit, the higher the risk of missing the payer's deadline, being denied or being written off.
Why accounts stay open
The most common causes:
- Incomplete documentation: missing medical record entries, prescriptions, reports or signatures.
- Pending authorization: a procedure or extension not yet authorized.
- Pending entries: supplies, drugs or procedures not yet recorded on the account.
- Audit: the account is under review by internal or payer audit.
- Billing queue: lack of staff or prioritization.
How to measure
Two numbers, always together:
- Value of unbilled accounts, in total and by payer, department and stage.
- Age: how many days each account has been open since discharge or the end of care.
A useful presentation is by age band (up to 7 days, 8 to 15, 16 to 30, over 30) and by reason. Old, high-value accounts go to the front of the queue.
The daily routine
- Every morning, the list of open accounts by age and value.
- One owner per stage (documentation, authorization, entries, audit, billing).
- Internal deadlines for each stage, agreed with departments.
- Escalation: accounts past the deadline go to the manager of the area holding them.
- Month-end: the value of unbilled accounts on the last day goes to the board meeting.
The effect on results and cash
Under accrual accounting, revenue belongs to the month in which care was delivered. If revenue is measured from billing, accounts open at month-end make the month's revenue look lower and the next month's higher. For cash, every day an account stays open adds to the average collection period. And accounts billed after the payer's deadline become denials or write-offs.
How BI helps
BI brings information from several stages into a single list, refreshed several times a day, with age and value. The team stops building the list by hand and starts working on it. For hospitals running Tasy, see billing and denials.
Related questions
What is an acceptable time to bill an account?
It depends on the type of care and each payer's contractual term. Set internal deadlines shorter than the contractual one, to leave room for corrections.
Do unbilled accounts appear in the income statement?
Under accrual accounting, revenue should be recognized in the month of care. In management practice, it is worth tracking separately how much of the month's revenue has not yet been billed.
Who is responsible for open accounts?
Billing coordinates, but the account only closes when every department feeding it does its part. That is why the list should show the stage and the owner.
Written by the team behind Clic Health: accountants, controllers and developers with more than 20 years of work in hospital management.