Revenue Cycle Management

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Patient Deductibles Can Strangle Your Cash Flow

5 Tips to Normalize your Cash Flow

At the beginning of each year, many physician practices face shortfalls in cash flow due to health plan deductibles.  Medical deductibles can play havoc with physician practices.  Health plans have consistently increased deductibles and, of course, the Affordable Care Act (ACA) plans are now in the mix.  Thus, a greater financial burden is placed on the patients for medical services and, in turn, physician practices are left to deal with the cash flow slow down.

Not so very long ago, a large portion of the medical bill was traditionally paid by commercial insurers, Medicare and other third-party payers.  But now, the landscape has changed.  Physician practices are forced to walk a fine line between providing good clinical care and limiting the burden associated with increased costs.  There are no other professions where consumers expect to receive services or goods and pay later.  But that is exactly what happens with health care.

At the beginning of each year, patients must first meet their deductibles before reimbursements will be sent to the provider.  So when you submit your bill the majority, if not all, of the allowable (what the insurance carrier would usually pay directly to you) is applied to the patient’s deductible.  Therefore, you get $0 from the insurance carrier and you must then bill the patient and wait for payment.  This can result in a delay of payment for 45-90 days.  Without excellent collection efforts from your billing team it can even result in bad debt.

What does this mean for your practice?

Let’s say Dr. Brown’s monthly collections average $100,000.00 and the total patient deductible amount for the month is $25,000.  If Dr. Brown did not collect any money from the patients at the time of service, then the projected collections for the month would be his average of $100,000 – $25,000 in patient deductibles = $75,000.  Rather than his average of $100,000 he would have only $75,000  to pay his expenses.

Ultimately, patient balances should be collected.  But how long can your practice wait for this money?  How long can you provide these interest free loans to your patients?  Below, are five practice tips to keep patient deductibles from strangling your practice.

  1. Staff members need to know what a plan covers;
  2. Verify eligibility and deductible status before every visit;
  3. Have honest conversations with patients and explain patient responsibility up-front;
  4. Collect whole or partial payments from the patient while they are in the office;
  5. Develop payment plans.

The best way to minimize the impact of deductibles is to be proactive with patients by detailing costs and  requiring a payment of the patients’ deductible.  At first, this may seem awkward or you may feel uncomfortable asking for a payment upfront, but in today’s health care environment more assertive tactics are needed to protect your bottom line.

 

Extra Money Not Extra Work

Work Smarter, Not Harder

Extra Money

Extra money – everyone is always interested in how they can make extra money.  What if you were offered an extra $30,000, $50,000 or even $100,000 more per year?  And, what if you learned you could get the extra money without seeing one more patient?  Would you be interested in learning how to earn this extra money?  Well, here’s how.

When you invest in a quality medical billing company, you should expect a 10% – $25% increase in collections.  If you are talking to other billing companies and your primary decision factor is based on price, then you are undermining your practice.  Fees can vary from 2% to 10%.  So, the real question is what are you getting for the price you pay and at what cost to your practice?

You want a company that works for YOU and is committed to following up on all claims, works all denials and collects everything that is owed to you.  Follow-up work is extremely time consuming and resource intensive.  If claims aren’t being worked then you are losing money on uncollected amounts.  If you aren’t collecting every penny that is owed to you then your great deal of 2% or 3% fee just became 10% or higher.

You should also beware of hidden fess and very leery of long term contracts and lock-in contracts.  Good billing companies don’t need to trap you into staying.  Rather they expect to earn your business every day.  Make sure you know exactly what the billing company is going to do for you and all costs that are associated with the service.  Who pays the clearinghouse fees, who pays for the practice management software licenses and is there a mark-up on paper costs?  Is there an extra fee for customized reports?  Are month reports run and delivered to you automatically or do you have to request and wait or prepare the reports yourself?  What exactly do they do to help you earn extra money?

Price should not be the sole decision point.  That is not how you will make extra money.  After all the saying, “you get what you pay for” has merit.  Is it worth risking the financial viability of your practice because you ‘negotiated’ a lesser percent?  You want your billing company to want to work on your accounts and take pride in their performance.  Of course, paying a high percentage doesn’t guarantee quality work either.  You have to look at the whole picture.

Is your medical billing company a partner or a vendor?  Vendors submit claims, send patient statements and then wait for payments.  Very little effort, if any, is put into working denials, filing appeals or calling patients because that is hard work.  A good billing company earns their fee based on hard work, diligence and denial management.

Good billing services aren’t passive. They know which payers are supposed to pay in 14 days, 30 days, or 45 days or more.  If the payer is a slow payer they know why.  For all payers, they follow up accordingly.  They work denials and file appeals and they actively recommend accounts for collection.  They don’t let old AR age forever because they know this gives a false sense of what your AR is and what is truly collectable.  You shouldn’t be making business decisions based on money that will never be collected.

Based on denial patterns, they identify areas for improvement and they communicate this to you and implement their own internal controls to help drive your denials down.  Slow pay puts your practice at risk.  You are buying expertise when you partner with a good medical billing company.

At Onpoint Medical Solutions, we are interested in working with practices that want a billing partner not a billing vendor.  We are passionate about providing your practice with the comprehensive revenue cycle management services that you deserve.

  1. We have consistently increased collections by 10% – 15% for our new clients;
  2. There are no long term or lock-in contracts;
  3. We use best in KLAS practice management software with complete transparency in all that we do;
  4. All clearinghouse fees are paid for you;
  5. All reports, including month-end and customized reports are provided at no extra cost;
  6. Our pricing is customized to your practice and takes into account your specialty, insurance mix, average collections or encounters per month, and the number of providers.

Ready to start collecting more money?

Let’s talk.  We can answer your questions and prepare a customized quote.  We would welcome the opportunity to schedule a demo so we can sho you the power of what we do.

Call:  1.800.594.8043

Email: info@onpointmedicalsolutions.com

Click here to ask a question

 

Why Reconcile Your Bank Statement?

Reconcile your bank statementYou’ve had a busy day so why add to it by trying to reconcile your bank statement?  All of your patients have been seen, you’ve called in prescriptions, finished your dictation and entered your charges, now you just want to relax.  However, you can’t truly relax because you know you should attempt to reconcile your bank statement.  When there are so many important things to do to take care of your patients and keep your practice running, reconciling your bank statement just seems to fall by the wayside.  After all, you haven’t done it for months and nothing bad has happened, so why start now?

If this sounds familiar, you aren’t alone but you could be losing hundreds, maybe even thousands of dollars.  You work far too hard to just let this money go missing.  Proper reconciliation of bank statements is vital.  Even if you don’t have an accountant on staff, this procedure must be done monthly.

Everyone makes mistakes, including insurance carriers, clearinghouses, billing companies, staff and banks.  Just because a deposit is reported to be done doesn’t mean that it was applied correctly.  And, there are far too many instances where practices fall victim to embezzlement.  As a business owner, you must take the time to reconcile your bank statement. Even if you delegate this task, you must see an overview of the results.  Keeping an eye on bank statements can help you keep your finger on the pulse of the company.

Regardless of whether you are using a consultant, accountant, or outsourcing to a billing company you should be getting a detailed reconciliation report.  If you aren’t getting such a report, ask for one.  This report will allow you to match reported daily deposits directly to your bank statement.  All discrepancies, no matter how big or small, must be researched and resolved.

If this is done monthly, you can rest easy knowing every penny that is owed to you has been collected and deposited to your account–not someone else’s account!