Some providers slow down their own cash flow because they do not know any better, or they just want to practice the way they have always practiced before, or they let their employees dictate how they are to run their practice. As crazy as it sounds these scenarios are more common than one would think. Payors are reducing reimbursement rates to balance the national debt, so why reduce your own income voluntarily? I have three case studies to share:
Scenario 1: A provider is being controlled by his front desk staff. In this office the front desk staff refuses to ask for money (either co-pays or previous balances), so regardless of instructions from the provider, they just don’t ask the patient for payment. This office saw 106 patients in a few days, and just 11 made a payment at the office, that’s only a 10% collection rate. It’s obvious that the staff never asked for co-pays, but some patients voluntarily offered to pay anyway. An internal audit revealed that they should have collected 40 co-pays, for a 40% collection rate.
The staff didn’t collect monies owed at the time of service and forced the provider to incur postage costs by sending invoices, which brings the typical delays of collection. Patients are more inclined to pay a bill at the time of service than at their kitchen table with a pile of other bills due. In this scenario the front desk neglected to collect previous balances as well. This client was unaware of the inaction of his own front desk staff.
The remedy: Emphatically instruct the front desk staff on the nuts and bolts of their duty to collect copays and balances due, or clean house and get a staff that shares in the commitment to seeing the practice succeed.
Scenario 2: In this office, the problem is the provider himself. He delays his own cash flow because he still chooses to perform certain practices the way he always has. He holds his billing for a variety of reasons: some are valid, some are not. He holds it because he hasn’t done his dictation, or because he has to attend sports events, or spend time with grandchildren, etc. His staff never prepares a deposit correctly or timely. He also doesn’t want the expense of a lockbox, his minimum-wage staff never processes his deposits correctly or quickly, and he always makes the deposits himself on his day off. A bank can process deposits better, faster, and cheaper, so this provider is tying his own noose. The provider slows his own billing and collections.
The remedy: Bite the bullet and get a lock box. Hire a staff that is invested in their positions as a career choice, and remunerate them with wages that compete with the region’s average pay. Set specific policies and protocols that teach exactly how to perform the tasks pertinent to the position, and spot check that they are being followed. Empower the staff to make suggestions for improved work flows, and be willing to change long-standing procedures for practices that work better.
Scenario 3: In this office the provider is as much a business professional as a doctor. They collect co-pays at the time of service, and collect any unpaid previous balances before patients are seen again. Their billing company interfaces with their EMR to collect their billing every day, so it’s processed every day, and they have a lockbox to collect their fees. They are computer savvy, and have systems in place to expedite all processes.
The remedy: None required. This practice is doing everything correctly, and their monthly reimbursements reflect the success of their systems and procedures. It is a thriving practice at which the staff and providers all take a team approach that benefits everyone as a group and individually.
Overall, providers should strive to perform the business functions of their medical practices with modern business concepts in mind. Everything changes--including billing and collections procedures. Most processes are electronic or going toward it. Embrace change and you’ll find that many things at your practice run easier, better, and faster. You’ll also see your monthly revenue increase, which we think you’ll agree is just plain good business.
