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Outline Your Practice’s Financial Policies for Continued Growth

by Jim White on October 3, 2014

I recently attended the Leading Edge Alliance’s Healthcare Group meeting in Montreal. While there, some of the country’s leading independent CPA firms were able to collaborate regarding trends, strategies and challenges for our clients. I always return from this meeting with new ideas and a better understanding of what is trending in the healthcare profession in other parts of the country.

I had a great conversation with Jerrie Weith of Anders CPAs in St. Louis and asked her what she believes to be the biggest trend in healthcare. It came as no surprise that her answer was “the increased financial responsibility by consumers”. High deductible plans give patients a lower monthly premium in most cases, but that comes with a gamble that services won’t actually be needed, and the deductible won’t have to be met. This trend isn’t going away anytime soon. So what does that mean to healthcare providers, hospitals and physicians?

We should see a decrease in uninsured patients. Why? According to Timothy Jost in the recent HFM Journal, seven million new enrollees are now insured due to the impact of ACA. The downside is that now these same patients are responsible for many thousands of dollars in deductibles. So the bad debt risk has been elevated.

What can physician practices do? Several things can help you manage this shift and potentially avoid the bad debt component. They all start with strong processes such as:

  • Accurate demographic information at scheduling;
  • Insurance benefits verification before each visit;
  • Clearly outlined financial policies that are easy to communicate and reinforced at each visit;
  • Friendly and knowledgeable staff who can help patients understand their responsibilities;
  • Consistent time of service (TOS) collection procedures;
  • Effective use of using credit card information to charge current and future payments (be sure you are keeping this information secure based on new requirements);
  • Reasonable payment plans (it does no one any good to set up $10 monthly payments on a $5,000 debt);
  • And…not being timid when it is time to turn over accounts to a collection agency – and in a timely fashion!

According to Rich Daly in the September/October HFM Journal, nearly 59% of all hospitals have adopted at least a basic EHR, with another 26% having adopted a comprehensive one. That indicates significant strides in establishing key tools for tracking and improving patient health outcomes.

If you think “no shows” don’t impact your bottom line, do a quick calculation. Take the percentage of time patients are a no-show, multiplied by the average cash value of that visit. You will be surprised! Not only are you losing that money for the visit, but those leave holes in your schedule that could have been filled by another patient who really needs to see you.

If you need some help in identifying how to address this, let us know. Carol Crews and her healthcare consulting team here at LBA work with hospitals and medical practices all of the time on operational improvement areas just like this.

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