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Don't let money slip out of your practice in the form of poor collection policies. Here are seven ways to maximize your revenue.
Maximizing revenue is critical for small and medium-size medical practices struggling to stay afloat in a climate of declining reimbursements and increasing costs. Still, many allow even more money to slip away by failing to pay attention to collections.
"Where I see practices breaking down is a total lack of monitoring and accountability," says Reed Tinsley, CPA, a healthcare business consultant based in Houston. "With measures in place to monitor collection activity, practices can quickly boost their collections by 10 percent."
An effective collections strategy should be embedded into office culture and work flow, adds Carolyn Pickles, MBA, FACMPE, a medical practice management adviser and consultant based in Western Massachusetts.
"You need to set expectations for staff on office standards for collections and provide them with training," she says. "And you have to hold employees accountable for following through on tasks."
Tinsley and Pickles recommend these strategies to aid collections:
• Monitor collections. Administrators often say that front-desk collections are "going well" but can't produce actual numbers, says Tinsley. "You should know how much you're collecting everyday from every patient who walks in the door and owes money," he says. "It seems like common sense, but a lot of practices can't tell me what percent of accounts they collected on."
• Communicate with patients. Do more than hand patients a statement of financial responsibility buried under a pile of forms, says Pickles. "A discussion of how your financial policies and procedures work is time well spent," she says, "especially since newly insured patients with high-deductible plans may not understand their coverage."
• Train your staff. Front-desk employees are the face of the practice but many receive little or no training in how to talk with patients about payment, says Pickles. Role-playing can be an effective training tool, she says. "Start with simple cases and move into more challenging situations where staff have to think on their feet and respond quickly, appropriately, and professionally - with the goal of collecting money at the time of service."
• Offer payment options. Practices should make payment as convenient as possible (by taking credit cards, for example) and offer payment plans when appropriate, says Pickles. "The payment plan is a wonderful tool to keep [accounts receivable] under control, but once in place it needs monitoring. If a patient falls off their plan, someone on staff should contact them about why they're not paying and whether adjustments could be made." Discounts on large balances can be effective as well. "Offering the patient a discount for payment within 14 days can keep A/R current and get big bills paid off," she says. Similarly, your collection agency should be granted settlement rights to deal with severely overdue accounts, says Tinsley. "Have them offer to settle the account if the patient can pay half of what's owed," he says. "You may get something instead of nothing."
• Collect at time of service. Front-desk staff should always ask for co-payments at the time of service and follow up when patients can't pay, says Pickles. "If they can't pay today, hand them an envelope and contact them in a week if payment isn't received." Setting an expectation on the first visit makes it more likely that patients will be prepared the next time, she says. Staff should also verify insurance coverage close to the visit to ensure that the patient's registration is accurate when they arrive for their appointment.
• Offer incentives. Some offices offer token rewards, such as gift certificates or movie passes, to employees who consistently collect from patients at the time of service, says Pickles. The real motivation for employees often comes from knowing that managers are paying attention to their rate of collection and consider it an important part of their job.
• Stay up to date with insurers. Practices can lose money on claims if they are slow to update insurers' allowable charges, says Pickles. If you bill $80 for a procedure that has an updated allowable of $85, for example, you'll receive the lower amount. "Also look at coding changes for your specialty and modify as appropriate," she says. "Every year you have to make sure you are transitioning to new codes and setting corresponding fees, or you'll risk delayed payments when claims are rejected."
Janet Colwell is a Brooklyn, N.Y.-based freelance writer specializing in healthcare. With more than 20 years experience as a journalist, she writes frequently about clinical and practice management issues for several national health industry publications. She can be reached at firstname.lastname@example.org.
This article originally appeared in the January 2015 issue of Physicians Practice.