If you’re wondering how to increase medical practice collections, start by making sure you’re avoiding 4 common mistakes. Let’s look closer.
The challenge to increase medical practice collections
The cost of healthcare has been rising for the individual. It’s been estimated that 82% of insured workers must meet a deductible before their insurance begins coverage, and the average cost of that deductible is $1,655. Since 2009, the premiums for a family have increased by 54%. Healthcare costs are growing, so payment collection will be an ongoing challenge for providers.
As medical bills are shifting to become more of the patient’s responsibility, many providers are finding themselves in financial difficulties as they try to collect. Providers will need to stay on top of patient billing to be able to meet their fiscal responsibilities.
Four common mistakes and what to do next
Mistake #1: Not collecting at the time of service: It’s been estimated that medical providers are collecting outstanding balances at the time of service only 12% of the time. And 67% of the time, they’re collecting nothing at the time of service, not even a percentage of the bill or a copayment.
When you don’t collect copayments, deductibles, and past-due charges at the time of service, your staff will have to follow up at a later time with mailings and phone calls. You can improve your office’s efficiency by setting up a system to collect your money upfront.
Start with these two steps to help improve collection at the time of service:
(1) Train staff. Conduct training for your front office staff to ensure they know exactly how to ask for payment. For example, asking, “How will you make your payment today?” may lead to a higher collection rate than asking, “Will you be making a payment today?”
(2) Keep billing information readily accessible. Your staff can obtain insurance information like deductibles, copayments, and past-due amounts before the patients arrive for their appointment. Then make sure your software allows them to easily access the information when the patient arrives.
Mistake #2: Failing to address denied claims: Does your organization have resources devoted to addressing claims denied by insurance companies? Denied claims can begin to add up over time. If you lack adequate resources to address claim denials, you may want to establish a minimum dollar amount in which you write off claims rather than correcting and resubmitting them.
You can also follow these steps to avoid having claims denied in the first place:
(1) Verify benefit information when setting up appointments.
(2) Ask questions of the insurance representative if questions arise before the patient’s appointment.
(3) Have staff double-check all information. Small details such as a typo in the last name can be enough to trigger a denial.
Mistake #3: Not offering a variety of payment options: If you’re relying on paper bills and receiving checks in the mail for your collections, you are missing out on opportunities to collect payments. You’re also wasting your resources on sending mail, and your payments will sit longer in accounts receivable as you wait for checks to come in.
You can increase medical practice collections by following these steps:
(1) Let patients pay via your patient portal. Allowing online payments via credit or debit card makes the payment process as easy and convenient for patients as possible.
(2) Allow patients to pay via payment plans. The high cost of deductibles may make it hard for patients to pay their bills in full. Get them set up with payment options at an amount that they can handle each month.
Mistake #4: Letting bills spend too many days in accounts receivable: The industry standard for payment turnaround time is under 30 days. Many medical providers find this to be a challenge. Claim denials, errors in billing, and failure to submit bills promptly can all contribute to delays in payment turnaround. And a slow turnover in billing means less cash flow for your organization.
Follow these steps for faster billing turnaround:
(1) Track and analyze time spent in accounts receivable and denial rates. Review your data and focus on areas that need improvement.
(2) Train your staff on coding and billing procedures to avoid errors.
(3) Implement a claim denial management system follow up process.
A medical billing audit can increase collections
Start with this free revenue cycle best practices for healthcare checklist. Don’t guess at where your billing or revenue cycle management process falls short. A thorough audit, whether it’s part of an overall assessment or a standalone service, can highlight where you need to make changes in your billing process. It should identify mistakes and provides actionable implementation and corrective steps. By determining the strengths and weaknesses of your billing department, you can work to increase medical practice collections.