Track, understand and adjust your collections cycle

With billing software and collections policies in place, your practice can improve overall collections and minimize past-due bills.

Carefully planning your collections process will likely boost your office’s revenue and help your patients stay on track with payments.

Track your collections with practice management software

Some EHR systems already have billing and collections features such as reminders that prompt staff to request payment and automated billing.

Family healthcare practices are doing well if they are able to collect 50 to 80 percent of what they charge each month within 30 to 40 days, considering that insurance reimbursements may lag several weeks behind billing. If your office’s fee schedule is relatively high, your actual reimbursements will probably be lower and your collections represent a smaller percentage. Of your collections total, between 60 and 70 percent should cover your office’s expenses. ¹

Using your practice management software, you can usually track these numbers and look for month-to-month and seasonal changes. From there, using a spreadsheet or your software, maintain a chart with a breakdown of your collections data and use it to improve your office’s understanding of your revenue cycle. When you find sizable changes, look for possible explanations and adjust accordingly.¹

Adjust your patient collections process

Simple in-person reminders and collections policies can reduce the hassle of billing patients. Office staff can partner with patients to keep bills paid and up-to-date. Depending on the practice management software your office uses, some features may automate and simplify this process considerably.

Kareo Software’s Getting Paid  blog recommends four strategies to improve collections:²

• Bill upfront: Keeping the billing process close to the patient encounter will help reduce the effort of billing later.
• Verify patient information: At each visit, double-check the patient’s insurance status and eligibility. Even better, your practice management software may do this automatically. Verify their contact information as well, so paper bills and electronic bills are sent to the correct addresses.
• Offer payment plans: If you decide to offer payment plans, make sure the terms are very clear and in writing. Convenient plans may improve your collections rate while also providing a steady cash flow for your practice.
• Explain the patient’s financial responsibility: Give your patients every opportunity to ask billing questions. You may need to offer training in handling billing issues so that your employees feel confident discussing financial issues with patients.

While some patient accounts may be difficult to collect, you should avoid writing off patient co-pays. Over time, this loses considerable revenue and may cause some insurance carriers to believe that you are inaccurately representing your fee schedule.³

Overcome collections challenges and improve your revenue

As your office tracks revenue cycles, you will be better equipped to understand sudden changes in revenue and should begin to get a more accurate perspective of your practice’s financial health.

 

1. Borglum K. “’Vital Signs’ for Assessing Your Practice’s Financial Health.” Family Practice Management.

http://www.aafp.org/fpm/2009/1100/p25.html. Published November 2009. Accessed February 2016.

2. McCoy K. “Improving Your Medical Billing: Reduce Delinquencies and Increase Your Bottom Line with a Better Collections Process.” Getting Paid. http://gettingpaid.kareo.com/gettingpaid/2011/02/improving-your-medical-billing-reduce-delinquencies-and-increase-your-bottom-line-with-a-better-collections-process/. Published February 7, 2011. Accessed February 2016.

3. Jannenga H. “The Importance of Collections / Avoid Writing Off Copays.” WebPT. https://www.webpt.com/blog/post/importance-collections-avoid-writing-copays. Published March 25, 2013. Accessed February 2016.