Fluctuations in adjustments should correlate with fluctuations in what?

Fluctuations in adjustments should correlate with fluctuations in receipts because adjustments are directly related to the revenue collected by a practice. Adjustments often occur due to billing errors, changes in patient insurance coverage, denials, or contractual obligations with payers, which in turn affect the cash flow and overall receipts of the practice. When there are increased adjustments, it typically indicates that there are changes impacting the net revenue collected, thus directly affecting the receipts.

As practices see variations in receipts—whether they are increasing or decreasing—it is common for adjustments to fluctuate correspondingly. For example, if a practice experiences high receipts, it may also lead to more adjustments if claims are being processed actively. Conversely, if receipts fall, it might indicate issues like more denials or adjustments due to payer disputes, reflecting a problematic revenue cycle.

In understanding revenue cycle management, it becomes clear that monitoring the relationship between adjustments and receipts is vital for maintaining a healthy practice financial status. This correlation highlights the importance of accurate billing practices and timely resolution of issues that can impact both adjustments and overall practice income.