Medical: Billing & Accounts Receivable

Medical: Billing & Accounts Receivable

With excellence of patient care the top priority in today's medical practices, a number of industry analysts point out that invoicing and accounts receivable practices don't get enough attention.

Billing and accounts receivable functions work hand in hand. To keep the receivable column lean, billing systems must be consistent and on the mark. The literature on this subject abounds, and the following strategies represent some of the best the experts have to offer.

Tame The Receivable Column

First, ascertain why patients are behind on payments. In some cases, they may have been unable to cover expensive one-time procedures, such as services rendered during hospital stays. A second factor is confusion around who owes what money. When insurance companies reject claims, for instance, staff sometimes transfers balances to patient accounts rather than deal with the insurance firm. Once you have cleared this up:

  • Be scrupulous in posting receipts. Record all transactions immediately, even if this means daily attention to the task. Check with responsible personnel frequently to insure all receivables are posted, including those that fall outside of patient revenues. If staffing is too tight to do this consistently, consider hiring someone to devote full time to the process.
  • Conduct regular in-depth reviews with accounting personnel. For example, it's smart to compare the practice's collection percentage and average collection period to established benchmarks, as well as to review ending A/R reports. This practice allows identification of positive and negative trends.
  • Purchase or update accounting software. Having the right programs to effectively track billing and receivables can make a world of difference in the bottom line. Investigate the many products on today's market that allow virtually any employee to keep accurate records. When implementing a new system, take advantage of any training or support the manufacturer offers.

Collect What's Owed

Timely collections begin with clear communications.Instruct personnel who man the check-out desk to explain payment terms to the patients before they leave the office. At that point:

  • Require immediate payment for services. This practice has become almost universal, for good reason. With the complexities of insurance reimbursement, co-pays and deductibles, delayed collection can spawn errors throughout the billing system.
  • Establish a consistent invoicing protocol. Bills should be complete, with all services dated and itemized. The format should be simple to understand, with clear due dates and payment terms. Include contact information so the patient can seek more information. Most important, send invoices the same day each month to keep the receivable flow steady.
  • When accounts are delinquent, attempt to work out solutions with the patients first. Because providing patient care is the mission of any practice, the majority of physicians prefer to arrange some sort of payment plan for delinquent accounts.

    One strategy consists of asking patients to sign a payment agreement, with for instance, a monthly payment of 10 or 15 percent of the original amount owed. All written and verbal communication concerning this sort of situation should be clear, friendly and non-threatening.

  • Fully document, track and back up telephone calls, correspondence and emails attempting to arrange payment on delinquent accounts. This includes a patient's promise - or refusal to pay.
  • After all else fails, get tough. Here's the scenario: A patient behind in payments has ignored telephone calls, polite letters and all attempts at a solution for three, maybe four months. Unfortunately, the practice may have no other alternative than to turn matters over to a collection agency.
  • The procedure for this unpleasant chore typically involves flagging offenders as "cash only" patients for subsequent visits, thus allowing them to continue care without further risk to the practice. If delinquency continues, the practice may give a notice period (10 days, for example) before discontinuing services. If the outstanding sum is significant, small claims court can be an option.

    If an individual is truly in need, however, practitioners may want to consider extending payment terms, especially when the patient is trying to meet demands.