Patient balances now account for up to 30% of practice revenues and that may well increase.
Because of rapidly increasing patient deductibles practices are faced with another collection challenge. Patient balances used to make up about 10% of practice revenues. Patient balances now account for up to 30% of practice revenues and that may well increase. It is wise for a practice to have a well thought out and easy to execute plan for dealing with this valuable source of revenue.
How to Increase Medical Practice Revenue
Let’s look at some statistics first. If you address the patient’s balance with them at the time of the visit, you have a 70% chance of collecting. If you let the patient walk out of the office without addressing their balance, you have a 40% chance of collecting and you will have to send statements to the patient to collect. MGMA estimates that it costs practices $3.00 to send a statement to a patient and, on average; it takes three statements to get payment. This means you have to spend $9.00 per patient to receive payment after 90 days and you will only be successful 40% of the time.
It is important to understand how much new revenue is required to offset any revenue you have to write off. Here is a quick example: Your practice has a net profit margin of 10% and you have to write off only $10,000 in patient balances that you can’t collect. You would have to generate $100,000 in new revenue to make up for that. If you are a primary care practice you collect $65.00 for the average patient encounter. This means you would have to get 154 additional patient encounters to make up for the patient balances you had to write off.
There is a better way. The first step in collecting a patient’s balance is helping the patient understand what they owe. You don’t have to submit the bill to the patient’s insurance company and wait until you receive the EOB to understand what the patient will owe, over and above their co-pay. You can learn how much the patient owes in addition to their co-pay at the time of service. Our system compares the state of the patient’s deductible, the patient’s coverage and the charges for the visit. It then delivers to you the amount the patient owes the practice. If the patient can’t afford to pay the entire balance at check out, you can work with the patient to set up a payment plan that will be managed by the patient’s credit/debit card and not by the practice.
You make more money in less time and you spend less to do it. That’s a WIN, WIN, WIN. If you want to find out more about how this could work for your practice, call The Medical Consultants Group at 404-272-4883 and we can get you started.