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Are Providers in Need of a Line of Credit to Face Upcoming Challenges?

January 26, 2012

Collecting deductibles and co-pays once a patient leaves your office is time-consuming, costly and makes practice cash flow inconsistent and unpredictable. If you’re like most practices, during the latter half of a calendar year, many of your patients have met their deductibles and insurance covers the majority of their office visits and medical needs.  As we turn the calendar over on 2012, it’s a good time to remind your front desk team that a new benefit plan year has begun and reinforce your collection procedures.

A well-trained medical biller on your team is your best weapon in keeping your practice revenue flowing smoothly.  Proper use of CPT codes and knowledge of a variety of your local insurance companies and major health plans will help you establish a database of knowledge to employ in creating effective collection policies for your practice. Additionally, a few simple techniques will help you to begin 2012 with a strong collections process in place.

1. Develop and Communicate an Upfront Collections PolicyIt’s important to have current benefit plan information on file for each patient so that you can accurately calculate any co-pays or deductibles for your patients.  It’s a good policy to check your patients’ insurance coverage during their initial visits each new plan year.  If the patient has a co-pay or deductible, collecting it at the time service is rendered significantly reduces the number of potentially uncollectible accounts.  Review your new patient paperwork to ensure that any changes in policies or procedures have been accurately incorporated into these forms.  Data collection is half the battle in ensuring efficient claims processing for services.
2. Train Staff on Proper Collection TechniquesMake sure that your staff understands your collections policy and is comfortable enforcing it.  Use role-playing techniques until your front desk team members are confident in talking with patients about their financial responsibilities.
3. Educate Patients on Their Financial ResponsibilityIf you clearly communicate your payment policies and are consistent in enforcing them, then patients know what to expect when they visit your office. Give them multiple ways to pay their bill by offering cash, check and credit card options.
4. Offer Financial AssistanceWith the growing number of uninsured or underinsured patients in our country, it’s important to have a financial aid policy to assist patients in need.  You can also offer assistance to patients in finding community or government programs to help with medical expenses.  Lastly, low or no interest financing will allow patients in need to receive necessary medical treatment.

Another technique that’s on the rise is for medical practices to establish a line of credit from a financial institution to manage cash flow inconsistencies, particularly during the first quarter when deductibles must be met before insurance company payments begin.  As practices convert to the ICD-10 Version 5010 HIPAA transaction standards, which went into effect on January 1, 2012, some experts are advising that a line of credit will help to minimize cash flow disruptions that may result from this conversion.  Information about ICD-10 Version 5010 can be found on the Centers for Medicare & Medicaid Services website at https://www.cms.gov/ICD10/.

In summary, it’s important to understand the intricacies and complexities of insurance plans, medical billing, as well as government programs and regulations covering the payment of insurance claims.  With this knowledge in hand, you can create the business processes and policies to support the efficient operation of your medical practice and maintain a steady revenue stream.

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Related Articles:

1. Creating Practice Policies For Collecting Patient Payments
2. Working Accounts Receivable – Part Two
3. Working Accounts Receivable – Part One

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