Five Key Steps to Financial Success
For medical practices across the nation, collecting money is harder than ever. Why? Consider these frightening statistics:
- The average American consumer has at least twelve creditors.
- The recovery rate for medical practices in the United States is 14.6%.
- The average American adult has $5,200 in delinquent accounts.
As you can see from these numbers, medical practices aren’t the only ones suffering. The difference is that commercial companies are good at getting paid, whereas many healthcare providers have a hard time seeing their practices as businesses. While this hesitation is understandable, this fact remains: doctors deserve to be paid on time for the invaluable services that they provide.
The steps below are meant to help doctors and their practices adapt to the new healthcare landscape, and get on the road to financial recovery and long-term success.
Learn to Identify the Four Payer Types
As you dive into the world of patient accounts and collections, you’ll quickly see that there are four distinct payer types.The trick is to apply the right collection techniques to the specific payer type. This will improve your cash flow, save you money and keep patients happy with you. Your practice needs to know how to handle each:
- This type of payer typically responds to the first statement that they receive from your practice.
- This type of payer is just a little forgetful; if you send them a few extra reminders, they’ll quickly pay their overdue balance.
- These types of payers know that they haven’t paid, and don’t respond to gentle reminders. In these cases, your practice will need to employ a third party to collect the overdue balance.
- This type of payer has no intention of paying your practice for services rendered. You’ll need to bring in the cavalry—also known as professional collectors.
Improve Internal Collection Practices
On an internal basis, you’ll need to ensure that your practice is protected. The following steps can help you optimize your practice’s ability to collect patient balances:
- Implement a fixed credit policy that covers a variety of items, such as missed or broken appointments, interest charged on overdue statements, and acceptable payment terms.
- When you speak to patients, assume that they will be paying. Instead of asking, “When can you pay?” your team should be asking, “How will you be paying?”
- Don’t fall prey to collection myths. As a healthcare provider, you may need to implement strong collection tactics—don’t be afraid to take action when necessary.
Understand the Danger of Depreciation
Depreciation is one of the biggest threats to a healthy cash flow. It is important to remember that when it comes to collections, time is not on your side. If you don’t act quickly, you’ll find that the amount of money tied up in accounts receivable will only increase over time.
Take the Time to Vet Your Collection Agency
There are over 4,000 collection agencies operating in the United States alone. With these simple questions, you can ensure that your practice chooses the right one:
- Are you a healthcare collections specialist?
- Do you use both diplomatic and intensive collection techniques?
- Do you provide collection services at a fixed fee?
- Do you offer an online collections interface?
- Do you offer 1st party services for your clients?
- Do your services comply with FDCPA, TCPA, and HIPAA standards?
- Can I see recommendations from other healthcare industry experts?
If you find a collection agency that can answer all of these questions affirmatively, you’ll know that you’ve made the right choice for your practice.
Explore Additional Cash Flow Solutions
If you continue to collect in the same way that you always have, your practice won’t progress financially or clinically. It’s important to be open to progressive cash flow solutions, including:
- Patient Portal Interfaces
- Automated Collections
- Comprehensive Accounts Receivable Processes
Protect Your Medical Practice’s Financial Health
As a healthcare provider, you are responsible for the health and wellbeing of your patients. But, what about your financial health? Just like any other business, your practice suffers from late or unpaid bills. Without financial stability, you and your staff can’t focus on what you do best: provide quality patient care.
Call the Medical Consultants Group today to find out how you can protect your practice’s financial health. To schedule a free consultation, call (404) 272-4883 or reach out via our online contact form.