In a previous post, we explored the topic of account receivables financing in the healthcare industry. We pointed out that the healthcare industry, almost to the exclusion of any other, falls victim to the trap of accounts receivable because of the unique situation created by third party insurance companies as well as government healthcare programs.
When working with insurance companies, accounts receivable often go unpaid for 30 – 90 days because they reserve the right to fully inspect each claim before paying out. The same goes for government programs like Medicare and Medicaid, although they don’t tend to be subjected to the same level of scrutiny. Finally, there’s the problem of the uninsured (guaranteed to grow in numbers if the incoming presidential administration makes its planned changes to the Affordable Care Act) and the under-insured who may not be able to cover their high deductibles all at once. Although payment plans can typically provide a path to full compensation for these individuals, it doesn’t change the fact that your money is delayed.
Strategies For Managing & Avoiding Account Receivables
For the healthcare industry, account receivables are a reality that you can’t eliminate completely. However, there are strategies that can be employed to control their occurrence and facilitate payment as soon as possible. We’ve included some of our favorites below:
1. Analyze Your Accounts Receivable In Detail
Looking at a quickly growing pile of accounts receivable will only put you on the fast-track to feeling overwhelmed and confused. Instead, we recommend taking the time to analyze the types of ARs you’re seeing and what’s driving their creation. Doing so may reveal that front-desk processes or billing inefficiencies are at the root of the problem, both of which can be solved with fairly easy fixes.
2. Prioritize Insurance Verification
One way to avoid the creation of accounts receivable is to make verification of insurance coverage and eligibility a priority anytime a patient walks into the office. “Making sure we’re checking insurance eligibility well in advance of that patient presenting to the clinic is a strong indicator of AR,” Stephanie Davis, director of revenue cycle management for Halley Consulting Group, told Medical Economics. Again, this is a fairly easy front-desk process that can be changed with little investment but yield big results.
3. Collaborate With Outside Billers
Busy healthcare providers often have a million things to think about, and billing processes is probably at the bottom of the list. Thus, many healthcare providers opt to utilize the services of a third-party billing company to manage their revenue cycle. The problem with this is that billing companies will never be as invested in (or affected by) accounts receivable as the practice managers themselves. Thus, your relationship with billing companies needs to be a collaborative effort, making sure all parties are getting the information they need and performance is meeting expectations.
4. Focus On Coding
Billing insurance companies and creating invoices isn’t what doctors and nurses are good at, that’s why they tend to stay in the examination room while the real experts handle the revenue side of things. But it’s important to make sure your medical coding and billing department is earning its keep. “You would be amazed at the amount of billable services that are not captured by physician practices just because we don’t have processes implemented that will allow physicians to enter that charge capture,” Davis added.
5. Communicate With Patients
When it comes to patient AR, communication breakdown can be the culprit. It’s essential that front-desk staff as well as healthcare providers themselves are completely clear about their payment expectations early on in the process. While this starts by requiring patients to sign a notice about your payment policy or sending prompt reminders about balances, it’s continued by providing your patients with an easy way to make inquiries about their invoices and pay them conveniently. This is why many healthcare organizations have embraced online billing portals and communication tools in recent years.
Receivables Financing Solves The Problems That Healthcare ARs Create
If you read through this list and notice several areas in which your healthcare organization can improve its accounts receivable performance, congratulations! We hope you’ll be able to take steps to fine tune processes and communication so that payment delays are minimized in the future. If you need access to working capital while these changes are implemented, please don’t hesitate to contact The Commercial Finance Group in Burbank. Our receivables financing services have helped dozens of healthcare businesses across the country bridge the gap between where they are and where they want to be, and we’d be honored to do the same for you.
We have offices in the Southwest and Southeast U.S. but we’re capable of providing account receivables financing anywhere in the country. Please contact our offices to speak with a custom lending solutions provider who can evaluate your situation and recommend a plan of action.
