Top-performing practices garner more cash up front
Top-performing practices garner more cash up front
View billing and collection as one process
One of the key factors distinguishing top- performing group practices from their peers is that they pay closer attention to — and get better results from — their accounts receivable and cash collection activities, reports a recent study by the Englewood, CO-based Medical Group Management Association.
"Although the bulk of patient care is now paid by third parties, the prompt collection of cash, especially copayments, remains an important element of practice performance," says Sara M. Larch, chief operating officer of Baltimore’s University Physicians.
Even seemingly small amounts of co-pay-related cash can soon turn into big bucks, notes Larch. For instance, if half of all your patient visits are covered by insurance requiring a $10 co-pay per visit, this translates into $10,000 for every 1,000 patient visits.
Rather than thinking of billing and collections as separate functions, "it may be more advantageous to think of the collection process as a continuum of duties beginning with front-desk functions and ending with the final resolution of an account receivable," says Donna M. Sherwin, president of Physician Billing Solutions in Wayne, PA.
Larch agrees that staffers handling traditional "front office" duties like patient registration can have a major impact on improving the practice’s billing, cash flow, and collections process.
"We’re always reluctant to hire more front-office staff, yet we keep adding people in billing and collections," says Larch. "Maybe we should move some of the billing staff to the front office. After all, who knows better about what happens to a claim when those pre-visit duties are either not done or not done right?"
For example, when the front desk person fails to inform patients about their co-pay or to ask an HMO patient to bring their referral to the appointment, this creates a potential collection problem for the practice.
"When the registrar collects incomplete data or enters the data incorrectly, a collection issue is created. When charges are entered incorrectly, when payments are posted incorrectly, when balances are not moved’ to the appropriate payer, or when inaccurate or incomplete claim forms are submitted, collection problems are created," says Sherwin.
Setting collection goals
To speed up cash flow, practices need to install procedures that "ensure each of these kinds of billing-related functions are performed with the objective of collecting on the account in the least possible amount of time," recommends Sherwin.
For instance, you could set the goal of collecting 100% of co-pays at the time of service. To implement this standard, you might develop a script to be read to all patients when making an appointment and when checking out after their visit, says Sherwin.
The pre-appointment script should include information about what to expect at the time of service relative to the patient’s financial obligation, referral information, etc. A post-visit response might be as simple as, "How would you like to pay today?" or, "The bill today is $x. Will you be paying by check or credit card?"
"You want to be polite and tactful without devaluing the value of your service," says Larch.
According to Sherwin, up to 65% of the reasons why claims are rejected or for which payment is delayed can be traced to errors in the patient’s enrollment information. To avoid the problems associated with patient enrollment, consider setting a standard of a maximum 2% error rate for registrars.
Larger practices can buy management software that will automatically track registrar error rates. "Smaller groups could just have the registrar initial the system or the registration sheet from which he or she took the information," says Sherwin.
"Further, you will need to develop a procedure for identifying errors. That is, you might create a change form to be used by individuals when they identify inaccurate data. The change form would be reviewed by the supervisor and the appropriate registrar would be counseled," she says.
By applying these concepts to each function in the billing process, "you could minimize, or even eliminate, the need for someone to collect bad debts," says Sherwin.
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