Billing and collections are a very critical and crucial area for private practice owners. Cash flow is the lifeblood of the organization—without it, the business wouldn’t exist.
Perhaps you’re meeting referral goals, and no-show/cancellation rates are satisfactory, but without a sound billing and collections system, you can put your practice in serious jeopardy.
The biggest mistake business owners often make is saying, “Oh, that’s not my area of expertise… so-and-so can help you with that.” Managers have to commit to maintaining control of all processes in their practices.
Proper training and constant supervision in the billing aspect of a private practice will prevent mistakes from being made. Mistakes in the financial department will put stress on the entire organization very quickly. A manager reacting to mistakes cannot adequately manage the team.
Keep an open line of communication between you and your staff. In order to remain proactive, you must stay in the loop. A good manager will sense that a problem is coming and take the necessary steps to prevent the problem from arising.
Staff member(s) that handle billing and collections must understand that they are not just collecting payments, but they are also a part of the team that changes patient’s lives for the better. They must understand the importance of their job in retaining patients and handling past-due balances with great care.
Some patients have trouble making their payments. Before rushing to a collections agency, statements must be sent to the payer over three months. If you still can’t reach the patient, try calling them. It is also beneficial to document each attempt to reach the patient.
You don’t want to go to the collections agency until you have made every effort to contact the payer. Although sometimes it is necessary, collection agencies can be very expensive and cause the patient to feel negatively towards your practice. Also, you performed the service. Shouldn’t you be paid 100% for the service you provided? You don’t go to a restaurant, order food, eat, and then leave without paying, right? What is the difference?
Another method that prevents the need for collections is getting as much money as possible from the patient upfront. It is much easier to collect a copay or coinsurance at the window than to try after they walk out the door. In fact, there is an exact process on how to do this most effectively that will 1) make your patients feel comfortable and 2) substantially decrease your A/R. This process is covered at PT Revolution.
Overall, it is most important that your billing staff has a solid, set process for handling payment collection. Set goals and standards for the team and hold them accountable for their efforts. This consistent system will produce what you really want—money coming in.
Again, as a general manager, you can’t leave it up to someone else. Control is necessary for financial accuracy and success.
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