Achieving Profitability Within A Medical Practice
Posted on March 28, 2008 - Filed Under Business
Maintaining a Profitable Practice
Managing Days Sales Outstanding
Timely collections are sometimes overlooked within a physician office. Collections begin prior to the patient visit, and end when the receivable is fully eliminated. Statistics have shown the longer the debt is outstanding, the less likelihood of collecting the full amount due to your office.
I have successfully decreased receivables days sale outstanding by streamlining and automating processes. Following are examples of the changes I have implemented, and recommend to increase your cash flow and productivity.
- Each office personnel (including the physician) should understand the goal is timely collection of the debt.
- Your office should have clear set policies for the collection of any patient financial responsibility at time of visit.
- Each patient must be educated on your financial policy.
- Your collection department should have set policies on claim follow-up.
- Automate processes, to eliminate user intervention and increase your employee productivity.
- Maintain a policy on denial management. By focusing on the reason for the denial, your personnel can eliminate “best guesses” in collection of the debt.
- Evaluate your Reason for denials. Establish basic reason codes. Examples include past filing deadline, visit was not authorized, insurance termination, and unfortunately those denied in error. The reason codes will not only lead the collector down the faster road to debt recovery, but also can provide useful reporting to make changes in other areas (i.e. avoid those visits that are not properly authorized).
- Perform an annual insurance contract review with applicable staff.
Having these policies and processes in place will assist your office in its productivity. Now, increase your profitability and select a system that assists in performing these tasks. Again, reduce user intervention.
These are the “musts” I recommend of your Practice Management Software.
- Auto-Tickler – Do not reply upon personnel to schedule when to follow-up on a claim. Build your follow-up procedures into the system.
- Coding – Build insurance/procedure specific coding into the system. Again, less user intervention can increase productivity.
- Front Desk Issues – Ensure all authorizations and referrals are obtained prior to the visit. Select a system that incorporates these requirements prior to charge entry.
- Billing Issues – Select a system which allows you to input specific insurance requirements, providing better guidance for your staff.
- Submission of Claims – Move to electronic filing of all claims. Your system should be able to accommodate electronic filing, to more than one clearinghouse.
- Reduce Manual Processes – Select a system that automates as much of the billing and collection process as possible.
- Keep all Information Online – Eliminate the paper billing/collection record. All detail should be available on the system. The data should include all charges, all claim forms, payment history, letters, scanned documents, billing and collection notes.
- Streamline Follow-up with Insurance Companies – Select a system that can transmit electronic claim status requests, and depending on the status code will worklist a claim immediately. Using claim status requests to payers will significantly decrease follow-up time and improve cash flow.
In summary, manage your cash flow by managing your collection process. Increase both productivity and profitability by decreasing the days sale outstanding of all receivables. And more importantly, select a practice management system that works for you and changes as you change, increasing overall productivity and profitability.
For additional information, or questions, please feel free to contact me. I can answer questions and recommend systems to help you achieve your billing/collection goals.
Tags: annual insurance, best guesses, collection department, days sales outstanding, debt recovery, denial management, employee productivity, financial policy, financial responsibility, insurance contract, office collections, patient financial, patient visit, physician office, processes, profitability, profitable practice, set policies, timely collection
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