How to Evaluate the Effectiveness of your Patient Collection Process

August, 26 2016

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The financial health of a medical practice is every bit as important as the health of its patients. The financial managers of large practices, charged with ensuring profitability, have their work cut out for them. Between third-party payers, patient co-pays, deductibles and self-pay, conquering the revenue cycle requires focus and dedication if a practice is going to thrive. To ensure the business maintains the highest cash flow possible, periodic evaluations of patient collections will help uncover any disorganization infecting the process that results in more work for less return. 

What can the CFO do to avoid long collection periods and, ultimately, uncollectible write-offs?

[CHECKLIST] Optimize your collections process with our diagnostic tool

Does Scheduling Know What Information to Capture From the Outset?

The patients' point of entry sets the foundation for final collections. Is your front office gathering all pertinent information from the patient before any service is rendered? Knowing what information that providers, government programs and payer contracts require before they will reimburse will help in the design of correct intake forms. Training the staff to verify insurance, create copies of necessary documents and collect co-pays, deductibles and self-pay funds in advance prevents quagmires in the back office.  

Are Denied Claims Tracked?

Frequently denied claims are huge indicators that the system flows poorly. Discovering the patterns involved in denied claims will enable the solution. If providers return claims unpaid due to coding errors or miscoded billing efforts, the manager should drill down into the coding resources and staff training procedures. Since the array of provider contracts and coding procedures can make mud of an otherwise clear stream of billing practices, it pays to organize the coding structure under a dedicated team whose expertise can help solve coding issues from the beginning to the end of the process.

Do Coding Audits Occur Regularly?

The business manager should incorporate coding audits on a regular basis in order to monitor the ongoing discipline in proper claims submittals. Audits will help determine if the department updates in a timely manner when codes and modifiers change. If coding failure crops up too often, is the problem staff churn? Frequent turnover such that new employees suffer from inadequate training can cause major problems in the collection workflow. The root issues of employee dissatisfaction must be addressed before coding efficiencies can be permanently established.

Are Claims Transmitted Quickly?

Cash flow will certainly suffer from slow claims submissions. Even if the translations from services rendered to coded bills move swiftly, claim submittals could be taking too long. With electronic procedures for remittance  to payers, business managers more easily can track payment issues and determine the speed of payments received. Building in payer contracts and fee schedules makes for more swifter and more accurate payment posting. Zero, partial and low payments can be quickly identified and managed with automated systems.

Does Accounts Receivable Have a Dedicated Wrangler?

It's too easy to submit claims or bills to patients then forget about them. In the absence of a dedicated accounts receivable employee, aging bills can bog down the collections process and frustrate payers and patients alike. Benchmark tracking should be established to prevent bills from languishing past 30 days without attention, 60 days without a follow-up and 90 days without initiating an external collections effort. 

What Happens When Payers Stubbornly Deny Claims?

When all efforts to collect from providers or the government programs fail, how soon does the office notify the patient and arrange for patient pay? Notifying patients quickly often results in their involvement with the third party payer. The longer the notification process takes, the slower and more difficult the collection process becomes.

Our best tips on collecting quickly

What Happens When a Bill Goes to an External Collections Agency?

Once the office sends a patient bill to collections, it should be tracked to see how long it takes for the agency to produce results. If it seems the agency is unreasonably slow to collect, the business manager should consider contracting with a second company, compare the results and choose the most effective one.

After evaluating the effectiveness of the patient collection process, a smart CFO might determine that the patient billing process is as efficient as its ever going to be while handled entirely in-house. Depending upon the size and resources of a medical practice, hiring a professional third party revenue cycle management company could make plenty of fiscal sense. Whereas the internal patient collections process consumes significant physical space and sizeable chunks of the budget, a third party, with optimized software-as-a-service, experience collecting more effectively and offering  plus customizable solutions for your practice can often cost less and produce more over the life of a large practice. 

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