The landscape of medical billing is changing. No longer are insurance companies footing the bill for services provided. Instead, the costs are shifting to the consumer, who might not be prepared for such an influx. So managing cash flow in a medical practice becoming very critical for surviving in this dynamic environment.
In fact, a study done by the National Center for Health Statistics estimates that 10 percent of families have a medical bill they can't afford to pay. Overall, 25 percent of families have an unpaid bill, while 20 percent have worked out a payment plan to give themselves more time to complete the payment. While this is convenient for the patient, it can leave a medical practice struggling with and unable to pay their own bills.
There are a number of things medical providers can do to eliminate these cash flow issues. By following these tips, a practice can increase their revenue and prevent missing out on compensation for services provided.
Get More Cash from Patients Upfront
The number one thing a practice can do to improve their cash flow is to get money from patients at the time of the visit. Providers should make it as easy as possible for the patient to pay by including a number of different payment methods, including check, cash, credit cards, or PayPal. They should also try to inform the patient before the visit what they'll be expected to pay by researching the patient's insurance info beforehand.
Chuck Alsdurf, CPA, is the director of healthcare finance policy for the Healthcare Financial Management Association. He noted that "if you don’t get paid when the patient is there, it’s a lot harder to get it after they leave.”
Related Article: 12-Tips to Increase Medical Practice Profitability
Pay Suppliers on the Due Date
For practices that are struggling to maintain a positive bank account balance, paying suppliers ahead of time can be tricky. That's why it's ok to wait until the due date on the supplied invoice to pay. This gives practices enough time to pool together funds. If necessary, providers might be able to work out a late payment with approval from the vendors. However, this should never be done without asking first.
Reduce Supply Inventory
Often, doctor's offices accumulate a mass of unneeded supplies. Instead of stocking up for the next year, offices can buy only the supplies they know they'll need for upcoming visits. This eliminates wastes and keeps bills low. That being said, it's important to make sure all equipment is of high quality to prevent needing more in the long run.
Derek Kosiorek, CPHIT, CPEHR, principal consultant with Medical Group Management Association, recommends buying higher quality equipment because "they might last five years instead of two. You have to look at a long-term investment in equipment to better regulate your expenses.”
Bill Patients for Missed Appointments
Patients who miss their appointments waste a doctor's time and money. One way to counteract these losses is to automatically bill a patient for a missed appointment fee. By keeping a patient's credit card on file, it becomes easier to charge them fees when they don't inform an office that they'll miss an appointment. A good guideline is to allow patients to cancel their appointment up to 24 hours beforehand, after which they'll need to pay the fee.
Find a Cheaper Office Space
Many doctors are not real estate experts, meaning that they might be overpaying for their office locations. Practices should confer with a real estate professional when lease renewal approaches to ensure they're getting a good deal on their property. It might be necessary to find a new cost-effective space.
For more help finding ways to maximize cash flow, contact M-Scribe Technologies, LLC. For years, M-Scribe has provided medical claims billing, coding and auditing services. Call us at 770-666-0470 or email firstname.lastname@example.org for assistance.