Question 1

What is the best accounting software for healthcare revenue cycle management?

Accepted Answer

Provider groups typically have a billing system and a general ledger that do not speak: the clearinghouse holds 837 claims and 835 remittances while net revenue on the GL is an allowance estimate maintained in Excel. Aleq is an AI accounting platform that is the books for healthcare providers: it reads 837 claims and 835 remittance advice from your clearinghouse, recognizes net patient revenue under ASC 606, books contractual allowances by payer, ages A/R against the payer that owes it, and ties the whole revenue cycle to the general ledger — with net collection rate, days in A/R, and denial rate derived from posted entries. Read-only connection; live in 48 hours.

Question 2

What is the difference between gross charges and net patient revenue?

Accepted Answer

Gross charges are charge-master rates — list prices no payer actually pays. Net patient revenue is what you expect to collect: gross charges minus contractual adjustments (the gap between your rates and each payer's contracted rate), denials, and implicit price concessions. Under ASC 606, only the net amount is revenue. The scale of the gap is large — for example, $13,440,000 of gross charges can net to $5,248,000 after $8,192,000 of contractual allowances. Aleq books revenue net of the expected adjustment per payer at the time of service, then trues up to actual cash as remittances settle, so net revenue is not a month-end estimate.

Question 3

What is a contractual adjustment in medical billing?

Accepted Answer

The difference between the provider's charge-master rate and what a payer contract actually allows — a $4,200 gross charge against a $2,560 contracted rate produces a $1,640 contractual adjustment. It is a contra-revenue amount, not bad debt, and it should be estimated per payer contract in the period services are provided. Burying all adjustments in a single write-off line hides how each payer actually performs. Aleq books contractual allowances by payer automatically, splits the remainder into expected payer payment and patient responsibility, and trues up each estimate as the corresponding 835 remittance settles.

Question 4

How does 835 remittance posting work in accounting?

Accepted Answer

The 835 is the electronic remittance advice a payer returns for adjudicated claims — payment amounts, contractual adjustments, denial reasons, and patient responsibility per claim line. Posting it means matching each remittance to its 837 claim, booking the contractual allowance, applying the cash, moving patient responsibility to the patient balance, and truing up the revenue you originally estimated. Aleq automates the whole sequence: it matches 835s to claims, posts the entries — cash, patient A/R, and contractual allowance against the gross charge — and reconciles remittances to bank deposits at $0.00 variance, with denials tracked by reason straight off the 835.

Question 5

How is revenue recognized for healthcare providers under ASC 606?

Accepted Answer

Net of variable consideration, at the time of service. Under ASC 606, a provider recognizes what it expects to actually collect — gross charges reduced by contractual adjustments per payer and by implicit price concessions, the expected-uncollectible portion of patient balances estimated from collection history — rather than booking gross and writing off later. Aleq applies this continuously: it recognizes from 837 claims net of expected adjustments, estimates and posts bad-debt allowances and price concessions from collection history, and trues everything up to actual cash as 835 remittances settle. Net revenue stops being an allowance guess that waits on the remittance.

Question 6

Is Aleq HIPAA compliant?

Accepted Answer

Aleq executes Business Associate Agreements for healthcare customers, and its per-tenant isolation, encryption at rest and in transit, and role-based access controls are built for HIPAA-grade obligations. Remittance and claim data stay inside the covered workflows that process them, every access is logged, and the full security disclosure — encryption, incident response, and audit signatures — is published on the security page. Security questionnaires and documentation are available under NDA.

Question 7

How do you calculate net collection rate?

Accepted Answer

Cash collected divided by net patient revenue — what you collected over what you were actually entitled to collect after contractual adjustments, not over gross charges. It is the cleanest single measure of revenue cycle performance, and healthy groups run in the mid-to-high nineties. The catch is the denominator: if net revenue is a stale allowance estimate, the rate is fiction. Aleq derives net collection rate straight from the posted ledger — revenue net of per-payer adjustments, cash from settled 835s — alongside days in A/R aged by payer daily and denial rate by reason traced to the 835.

Gross charges are not revenue. Aleq books the net, per payer.

Gross charges aren't revenue, and the write-offs hide the truth.

An 835 posts. Net revenue, trued up.

The books for healthcare & rcm, run for you.

From the 837 to the cash, on one ledger.

Contractual adjustments, by payer

The revenue cycle on the ledger

Payer mix & denials tracked

Bad-debt & allowances posted

The rest of the revenue cycle, and the ledger underneath it.

It speaks your accounting natively.

Questions, answered.

Net patient revenue is posted, not estimated.