Cash Leaks Can Occur Before,
During and After Every Patient Visit
Unlike most other businesses, as a physician or other
health care provider, you have several unique challenges that cause tight cash
flow, and more often major leaks. Even practices that are believed to be as
highly successful, they too can feel the strain of cash- flow problems.
Critical cash-flow leaks can be triggered before and after a claim is filed,
when any combination of these problems appears in the practice:
• Not enough
patient appointments to fill the
daily schedule. Typically, this is a marketing problem unless it resulted from
lost patients due to alarming operational issues within the practice.
• Failure to
pre-authorize claims prior to the
office visit rather than prior to filing the claims.
• Not
discussing the financial obligation with
the patient before the office visit. Unlike during true medical emergencies,
patients deserve and expect to be informed about the cost of their care before
it is furnished to the patient.
• Failure to
double check and update all patient
information prior to the visit and upon arrival. This can dramatically slow
down reimbursements if there are errors. Also, verifying a match between the
patient and the insurance card can catch use by a family member who isn’t
covered. Ask for a picture ID for confirmation.
• Inaccurate
or incomplete super bill or encounter
form. Without the correct diagnosis and treatment information, you won’t get
proper reimbursement.
• Failure to
make sure all patients check out after
the visit to settle co-payments. Patients can unknowingly walk out without
paying, assuming insurance will cover the visit. Some knowingly walk out with
their superbill or encounter form in hand, making billing impossible. You can
also collect co-payments in advance in many cases for routine visits.
• No-shows. Few physicians charge for no-shows because of the
fall-out of goodwill between the patient and doctor. However, routine offenders
need to be respectfully educated how that behavior adversely affects inability
to see other sick patients that could have been helped sooner if missed
appointment was available to them instead. Often, a no show can be rectified
early with several early automated phone calls, text, and/or email appointment
reminders resulting in either confirmation of an appointment or re-scheduling
for a next available time. A properly implemented no-show policy and procedure
initialed and signed by the patient sets early expectations between the
physician and the patient resulting in mutual respect and understanding of
mutual responsibilities.
• Lost
patients due to poor patient
relations or inattention. Each and every one of us, at some point in our
lifetimes, came across “that individual” that should have never been allowed to
deal with patients or customers; let alone be positioned as the first person
setting the tone for the remainder of the patient’s visit at the practice.
Management of employee’s bad behavior is not a pleasant task that we all signed
up for. However, the approach of “looking the other way” never fairs in a positive
outcome. Most patients will keep their bad experience to themselves and will
not make us aware of an alarming problem with our employee. Furthermore,
disappointed patients will leave our practice, walk across the street to
competing practice that they can trust, share their bad experiences with their
family, friends, and social media circles. Next thing we know, our bad employee
has created and validated bad reputation of our practice which has resulted in
fewer appointments and a real threat of the practice closing its doors. Small
misunderstandings and big problems can be caught early simply by an
implementation of meaningful, independent patient surveys that open channels of
communication between the patients and the practice. It has not been uncommon
to find valuable ideas and feedback that can lead to improvements ultimately
resulting in our patients becoming the best marketing team for our practice.
• Excessive
write-offs. The most common write
offs in medical practices are contractual adjustments and uncollectable
accounts. Write-offs vary for physicians based on who’s paying the bill and the
economic status of the local community and its residents.
With an HMO or PPO, a practice may lose anywhere
between 10% and 36% on regular rates, which depends on the insurance agreement.
Uncollectable accounts from self-pay patients can run
5-15% among affluent community, and up to 75% in severely poor areas.
Medicaid write-offs can be high – over 70% in some
areas, and Medicare write-offs are not un-usual to be found at around 35%.
Cash-flow leaks can last a few to
several months after the actual visit. Furthermore, a decision to utilize the
line of credit to cover immediate operational expenses, result in un-necessary
finance charges costing your money and speeding up a debt spiral of the
practice. Insurance companies are often not the primary reason of the
practice’s cash flow leaks. Often, practices themselves contribute to the
problems. Fortunately, there are many ways to speed up payments, collect more
of what you’re owed and plug the “internal bleeding” caused within your own
practice.
