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Five Biggest Medical Practice Collections Mistakes

Five Biggest Medical Practice Collections Mistakes

Marsha Sosebee remembers her first day as a billing and collections team leader very clearly — but not very fondly. "I started my first day there with a 100-page [accounts receivable] report," says Sosebee of the three-physician orthopedic practice. "Collections, I couldn't even begin to tell you the percentages out, but by standards it was atrocious."

That was more than a decade ago. Looking back, Sosebee recalls discovering that repetitive collections mistakes, including failure to follow up on claims, poor communication, and lack of training, were adding up to big problems. "It was to the point that they had to bring in crisis management or they were going to go under," she says. As Sosebee began to address those issues and several others, things began to turn around for the practice. By the time Sosebee, now billing manager at a solo specialty practice in Dalton, Ga., moved on from that orthopedic practice four and a half years later, its net collections had reached 96 percent.

While your practice's financial situation may not be quite as dire as the one Sosebee encountered, it could be making similar collections mistakes that come at heavy costs — the consequences of which are magnified as reimbursement declines and overhead increases.

To ensure your practice is collecting as much of its hard-earned cash as possible, we asked Sosebee and other medical practice revenue experts to weigh in. Here's what they say are the five biggest collections mistakes practices make, and their recommendations for how your practice can reap higher returns.

Mistake #1: Failing to collect at time of service

Collecting patient balances — including copays, deductibles, and past-due charges — at the time of service reduces staff time and money spent mailing statements to patients, and it "eliminates those small balances from being on the books," says Joy Hicks, a medical practice revenue cycle consultant.

It also increases the likelihood that patients will pay in a timely manner, something that's becoming more critical as patients' portions of their bills make up a higher percentage of total reimbursement, says Jim Akimchuk, vice president of revenue cycle services at consulting firm Culbert Healthcare Solutions. "With the increase in patient responsibility that's coming through, it's becoming more and more incumbent upon the practices to collect their upfront dollars as quickly as possible," says Akimchuk.

To improve time-of-service collections at your practice, follow these four steps:

1. Verify and note. Make sure staff compiles the patient's portion of payment information, especially the copay and/or past-due balance amount, during the benefit verification process and prior to appointments, says Hicks. Staff should also note this information somewhere easily accessible, such as in your practice management system. That way when patients present for appointments, staff can quickly identify any payments that are due.

2. Ask appropriately. Instruct staff to avoid phrasing mistakes that can lead to failure to collect at time of service, says Akimchuk. Rather than asking patients, "Would you like to make your payment today?" staff should ask, "How would you like to pay your balance?" he says.

3. Provide resources. Train staff to ensure they know how to determine the patient's deductible and coinsurance, says P.J. Cloud-Moulds, owner of consulting firm Turnaround Medical AR Recovery. She recommends providing a fee-schedule chart listing your practice's most commonly used codes and each payer's corresponding contracted rate.

4. Proceed with caution. While providing staff with an updated fee schedule should "get you within cents of what the patient is going to owe," make sure your staff is not making unnecessary promises to patients when collecting, says Cloud-Moulds. "The worst thing they can say is, 'This is all you will have to pay.' The patient will hold you to it, and then you're adjusting off things [later] that don't need to be adjusted off."

Mistake #2: Failing to set expectations

Don't underestimate the importance of relaying payment expectations to patients as frequently and as far in advance of appointments as possible. "Establishing that expectation, as basic as that sounds, is actually something that has proven to be very effective in terms of increasing time-of-service collections," says Akimchuk.

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