How to Prevent Loss of Cash Flow in Your Practice - Part II
Click here for Part IAre You Doing it Right the First Time?
The further an error travels along the revenue cycle, the more costly revenue recovery becomes. Some industry experts estimate that it costs about $25 to rework a claim, so be proactive and prophylactic.
Analyze your rejections at the billing staff level, which means keeping up-to-date on coding. An automated system will always identify changes and/or mistakes for you that a human might otherwise miss.
When it comes to patient responsibility, verify, verify, verify. Before a patient sets foot in your office, you should know whether they are eligible for coverage and what their co-pay and deductible status is. You can automate this via batch submission of your daily schedule (to/through Web-based payer sites). Flag any problems for reception and have them handle issues when the patient arrives at the office.
Monthly review
At the end of every month you should be aware of what’s outstanding and where you’re at in terms of outstanding invoices.
Typical practices have 20% of invoices outstanding over 120 days old. Better performers are at stand anywhere between 8% and 10%. Your top 5 payers account for 80% of your receivables, so it pays to make sure that everything is in order with them.
Using a collection agencyDue to healthcare reform laws, patients’ share of medical bills is expected to skyrocket. In 2007 patients were responsible for 12% of their healthcare bills. By 2012 that number will climb to 30%.
Now, consider these statistics. According to collection industry experts:
- Only 5% of accounts over 90 days past due will ever pay voluntarily
- Accounts which are 90 days past due are 70% collectible
- Accounts 180 days past due are 52% collectible
- One year old accounts are 23 percent collectible
Coming changes in reimbursement and a growing patient payment responsibility put the onus on the physician to collect in order to maintain practice revenue.
Are you effective at getting non-payers to make good on their debts? Do you and your staff have the time to be persistent enough to collect? Most likely not. When something falls out of the scope of your practice you send your patients to a specialist, so it makes sense to do the same for yourself and your money.
