A continuing series of practice management columns to educate OFP's on effective financial management.
By Judy Capko
Collections in a busy medical practice is a silent task that doesn’t always get the attention it deserves. Collections is not just a matter of billing the insurance carrier or managed care organization, it’s a matter of timely follow-up and accountability. Follow these simple steps and the job of collecting will be far easier and more reliable.
1. Identify Who Is Accountable and Hold Them to the Task.
You should begin with staff. Each staff member needs to understand their role in collections. This starts with collecting information about the patient and their insurance coverage. Next, you need to make sure all services provided are documented and coded properly.
This should be followed by entering the data into the computer and submitting insurance claims.
The collection process isn’t complete until the balance is paid by both the third party payer and the patient. Be clear on which staff members are responsible for what portion of these processes. Finally, develop a method to monitor performance and address issues on deteriorating performance and poor results.
2. Recognize that Effective Collections Begin at the Point-of-Service (POS).
Collections begin with patient visits and those small $5 and $10 co-pays. It is important to collect the co-pay when the patient arrives for their visit – the Point-of-Service (POS). Otherwise, it may be overlooked and require sending out a statement. The cost to send a patient a statement is estimated to be between $8 and $10. Physicians are not in a position to absorb this expense on small balances that are easily collected at POS.
Beyond this, a perfect time to collect on existing patient responsibility balances is when the patient ends their visit. The receptionist should be skilled at reviewing accounts and determining what portion of the balance is the patient’s responsibility. Asking for and collecting patient balances should be a matter of routine at POS. Your effectiveness depends on consistent procedures and holding staff accountable.
3. Focus on Quality Input and Quality Output.
As the saying goes, garbage in, garbage out. Your billing system is only as good at the information you put in it and the procedures you follow to ensure output is accurate and timely. This includes collecting accurate demographic and billing information. Patient information forms should be updated at the first visit of each year. Color-coding the forms each year is an excellent method to ensure compliance and hold staff accountable.
The output data includes proper and timely submission of insurance claims, including secondaries once payment is received from the primary carrier. Patient statements also are a key output document. Review your patient statements to ensure they are easily understood by the layperson and clearly identify what portion of the balance is the “patient’s responsibility.”
Statements also should include an aging of the balance and a dunning message for delinquent accounts. Most computer billing software allows you to customize your dunning (collections) messages and determine the criteria for when they should be placed on the patient statements.
Cycle billing patients is a convenient way to control cash flow and patient inquiries. Break up the alphabet into four cycles during the month to avoid a barrage of patient phone calls to your billing department.
4. Develop Written Financial Policies and Procedures.
The financial policy should represent the practice’s philosophy and collection goals. These goals should be specific and identify employee responsibility. By including the entire staff in development and implementation of a financial policy the practice gets their buy-in, which is necessary for a successful outcome. When policies and procedure are written they can be used for training and to hold staff accountable. After that it’s a matter of monitor, monitor and monitor. The results will be worth it!
5. Review and Analyze Collection Performance.
The following reports must be reviewed monthly:
• Unpaid claims
• Aging
• Aging by payer class
• Patient balance
• Payer performance
Analysis of these reports should include several months with graphs to identify trends. The trends revealed will help you understand how the practice is performing and determine if a change of processes or policy (such as increasing automation) might improve performance.
These strategies are an excellent way to ensure you are managing revenue and providing staff with the tools they need to do their best for you.
Judy Capko is a healthcare consultant with more than 20 years experience. Her focus is practice operations, staffing, finance and marketing. Judy is a national lecturer and has participated in ACOFP conferences. She is based in Thousand Oaks, CA and can be reached at (805) 499-9203 or e-mail: judycapko@aol.com
