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How to Improve Your Practice with Progressive Cash Flow Strategies

Posted by Melanie Reed, Jan 13, 2016

Need to improve your medical practice cash flow? It’s worth trying out a few progressive cash flow strategies.

A Multi-Step A/R Process

Not all patient payers are alike. Some require different stimuli at different times. This means that you need a mixed methodology to get all of them to pay.

Let’s face it, you are in competition with commercial businesses that can shut off services. You don’t have the luxury of turning off someone’s power or cell phone until they pay their bill. If you understand that the ‘squeaky wheel gets the grease’ and implement a process to increase the number of times you touch a patient account each month, you will see a strong increase in recoveries and you will decrease the number of accounts that have to be sent to collections and/or written off.

First Party Services

It takes three to five contacts to get many patients to pay attention to your bill and take action. That means it can take up to five months to get your money after insurance has paid. If we know it takes five contacts to get their attention, why not condense the timeframe at which those contacts go out? It is best to vary contact at intervals of 10-20 days, but many practices struggle to just send out one statement per month.

According to Nicholas Fabrizio, principal with the Medical Group Management Association (MGMA) Health Care Consulting Group, "All told, it costs $11– $12 to send out a statement."

There are agencies that can help relieve the burden and cost of contacting patients yourself after you have sent the first one or two statements and they can usually do it less expensively and more frequently than you can internally. Find an agency that offers first-party as well as third-party contacts so that you are sending the right stimuli to the right patient at the right time. This method will increase recoveries simply by being in front of your patient more often.

Fixed Fee Collections

Some patients pay at the time of service and a large portion pay with the first statement, but statements lose effectiveness as time goes on.

If a patient has ignored three statements from you, what do you think they are going to do with the fourth?

Many progressive practices have realized that the old model of percentage based collection agencies simply is not profitable. Work with an agency that offers a la carte pricing and a fixed fee per account rather than a percentage. If you pay a fixed fee, they are obligated to contact every account. If you work with a percentage agency, you are at the mercy of that agency on whether or not they call your accounts.

Insurance Claim Prompting

It’s written in the protocols of most payers (Medicare, private and commercial, but not Medicaid) that if they are ever contacted by a “licensed collection agency” about an open claim, they MUST send the claim to a supervisor immediately to resolve it.

“Resolve” means:

  • Stamp it “PAID”
  • Deny it quickly
  • Get the info we need and stay on the doctor until it’s paid or denied.

So this begs the question:

Why are payers so motivated after an agency contacts them, when you have been calling them for months?

There are agencies that can contact the payer on the practice’s behalf and take advantage of this protocol.

Automated Collection Interface

If you are going to work with a collection agency, make sure you work with one that is integrated with your software. If you are still copying and faxing files to your agency, it’s time to look for a new one that has embraced technology. It’s 2015.

Ready to get your patient collections up? Implement some of these practices today and get back to a financially healthy practice.

Let us know in the comments how you're protecting your practice's financial health this year.

 

Sources:

Wally Schmader, Transworld Systems, Inc.
Brad McDaniel, Transworld Systems, Inc.
Karen Cooper, Transworld Systems, Inc.

Topics: eVisit Blog Posts, cash flow, cash flow melanie, claims, collection, collections, financial health, insurance, medicaid, Medical Practice, Medicare, melanie reed, Practice Management, Private payers, profitable practice

Melanie Reed

About Melanie Reed

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