Cash Flow

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Dealing with Unmet Deductibles

Unmet Deductible

Unmet deductibles challenge health care practices and interrupt cash flow.  Long gone are the days when collecting patient payables meant collecting $10 copays.  More and more patients have chosen a high deductible health plan to save on premiums and/or take advantage of health savings accounts (HSA).

Unmet Deductible This means that each patient must pay out of pocket for health care services until their deductible is met.  After that, their insurance will pay your claims.  The amount of the deductible varies from policy to policy.  However, the most common amounts range from $200 to $6,000.

Unfortunately, each new year finds patients, providers and clinic staff struggling to meet these deductibles.  Each must find an effective way to deal with the impact when deductibles reset.  Here are a few basics for improving your patient collections.

Tips to Improve Collecting Patient Deductibles

  1. Prior to the patient’s appointment verify eligibility and know what your patient will owe.  This is especially important because patients change insurances which results in changes to the deductibles.
  2. Always verify whether or not a deductible has been been met when you call to verify the patient’s insurance.
  3. Reduce front desk awkwardness and instead tell the patient why they will owe before the appointment.  Letting the patient know what they will owe is critical.  You can even do this when you place appointment reminder calls.  Patients don’t like surprises and they are being educated to understand that they will owe more than a $10 copay.
  4. Make it easy for them to pay and give them options.  Let them pay on a credit card, by cash, check, money order and even PayPal.  Make sure your staff offers to accept payment during the appointment reminder call or when they check-in or check-out.  Also, make sure that you have this payment expectations/information posted in several places in the office, including the waiting area and patient rooms.
  5. Implement a credit card on file policy whereby your patients agree to have all or some of the balance charged to their credit cards each month.  You do not want the liability of keeping their credit card information onsite, so use a certified and secure third party to retain the information.
  6. Promote your patient portal and if you don’t have one – get one.  Online payments are the way to go!  Some patients just want to go online and make a payment.
  7. Collect a flat amount in advance.  If you don’t know how much the patient will owe, then collect a flat amount.  Let the patient know that after the claim has been paid the balance will be billed to them.
  8. Inform your staff of how to collect money.  Your staff should be well-informed of all office and financial policies.  Consider providing staff with scripts to help them collect patient payments.

Time of service collections and lots of communications will help to make collecting deductibles easier and in the long run reduce everyone’s stress during ‘deductible season’.

Three Ways to Increase Your Practice Collections

How much money is your practice losing?Increase Collections

Collections are the life-blood of your practice.  Yet, doctors in the United States lose roughly $125 billion per year due to poor billing practices.  According to an MGMA study, an average practice will recover just $15.77 for every $100 owed once a patient defaults on the amount they owe to you.

Below are some ways that can be implemented in order to maximize your collections. You will find that most are fairly easy and do not require additional resources.  They do require a concentrated effort but will prove to be financially beneficial.


  1. Make sure you have a patient portal.
  2. Remember, having a patient portal isn’t enough.  You must maximize your patient portal.
  3. Make sure you have an online bill payment option.


  1. Give patients a wide variety of options for paying their bills.  Be sure to accept cash, checks, credit cards and debit cards.
  2. Encourage patients to register a credit card to keep on file with your office and make sure they enroll in an automatic pay option for their patient balances.
  3. Encourage patients to pay past account balances and current charges at the time of service.
  4. Train all staff to firmly but gently communicate with patients about patient financial responsibility issues.
  5. Be willing to refuse service to patients who do not pay.


  1. When you transition to a billing company, you get trained specialists dedicated to medical billing.
  2. Outsourcing means you don’t have to worry about personnel issues, covering vacations or ongoing training expenses.
  3. Utilizing a billing company will afford you the benefits of state-of-the-art software, up-to-date processes and key reports in a timely fashion.
  4. Dedicated efforts, working every denial, and not accepting zero payments will result in your practice getting more money faster.

Maybe all three ways won’t work for your practice or maybe you’ve already done some and that is great.  Every way that you implement will only help to increase your practice collections.

Did You Renegotiate Your Payor Contracts to get the Raise You Deserve?

Is it Time to Renegotiate Your Payor Contracts?


There are too many times to count where we’ve encountered physicians who haven’t renegotiated their payor contracts for years and sometimes never.  If you fall into this category then don’t waste another minute.  Don’t miss out on getting paid more for the work you are doing.  Get those contracts out, dust them off and prepare to renegotiate.

The following steps will help you through the renegotiation process and alert you to some key terms that payors don’t want to include in your contract but you should make sure they do.

Contract Review

  1. Study your current contracts and fee schedules
  2. Review contract terms
  3. Know your term and termination language and notification requirements

Do Your Homework

  1. Generate a list of DX codes with frequency for the quarter and the year
    1. This will show you what codes you use;
    2. 20% of the codes are used in 80% of the cases and those are the ones you want to have the higher fees
  2. Know your highest volume CPT
  3. Benchmark reimbursements against the Medicare fee schedule
  4. Prepare and excel spreadsheet listing the top reimbursement and the top highest carrier.
  5. Know your practice model
    1. What makes your practice unique?
    2. Do you have an in-house lab, are you bilingual, do you provide consultations, are you double or triple boarded?  Are there demographic advantages?  Do you provide ancillary services?  These things could get you higher reimbursements.
  6. Make sure you are on ACH for all carriers.  Your billing service should do this for you.

Know what you Expect/Require from the Payor

  1. Do not allow the carrier to just look at your taxonomy number because they might not understand or see the whole picture.
  2. Require the carrier to review your prior utilization
  3. Address the top 25 used ICD-10 codes that you identified when you did your homework
  4. Determine carve-in and carve-out ICD-10 codes.

Key Terms

  1. If you have an evergreen contract (one that renews automatically) then you should have a set percent increase every year.  If it isn’t an evergreen contract you have the right to renegotiate every year.
  2. Claim adjudication should be daily not weekly and make sure this is spelled out.
  3. When they ask for records, make sure the contract spells out the turn-around-time for their review.  It should be 14 days.
  4. The contract should spell out the denials management process, i.e. TAT, appeals.
  5. How are refunds handled?  Take backs should be written out of the contract.
  6. Check and comply with their CAQH and professional liability update requirements.  You must stay updated or the can kick you out for non-compliance.
  7. Understand the language of the contract.

The Proposal

  1. Prepare an impactful proposal letter.  This is a sales pitch.  Most physicians don’t like to think of it as a sales pitch but that is what it is.  Sell yourself and your practice.
  2. Don’t mention pricing at this point
  3. Send your proposal to a specific person, i.e. your network representative.
  4. Track it.  The payor will take approximately 4 weeks to internally evaluate your proposal and do their utilization review.
  5. Follow up.  Call every 15 days.  Don’t be surprised if you get the run-around.  Just hang in there, call and remind them that you have called before and that you are checking on the status.

The Offer

  1. Do not accept the first round of negotiations.  Always counter
  2. Evaluate, compare and decide on next steps.
  3. There will likely be things you like and don’t like but decide what is most important to you and be prepared to compromise.  Both sides should win and lose something.
  4. Is the rate increase retroactive?  If so, to what date?


  1. Before you sign, verify that the contract includes the reimbursement rates, the increases, and all terms.
  2. Sign the contract and return it certified mail.
  3. Tell your billing company.  Your hard work will only pay off if you have good revenue cycle management.  The billing company needs to know
    1. the new fee schedule;
    2. claim adjudication terms;
    3. denial management terms;
    4. turn-around times; and
    5. refund management terms
  4. Track your reimbursements
    1. Check EOBs for the first few months and periodically thereafter to make sure reimbursements are consistent with the new rates.  If you have been underpaid you can rebill for the difference.

Renegotiating payor contracts is time-consuming and can be frustrating but it is so necessary.  You already know that insurance companies aren’t going to look out for you.  You must look out for you so start today and take it one step at a time until you get your raise.


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.


Why Reconcile Your Bank Statement?

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!

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