Patient encounters are the lifeblood of any practice, but there’s another side of every patient encounter that is equally impactful and may not get as much attention—the revenue cycle management that allows you to collect payment after each patient appointment. Medicine, unlike many other industries, has a complex web of payment processes, and if not managed properly, can lead to reduced collections and lower income.
There are many revenue cycle challenges that you may not be able to control, but here are some important parts that clinics can control and still often miss.
Reporting & Analytics
One of the most important things you can do to optimize your revenue cycle management is to know what’s happening with your clinic’s finance. Key reports and analytics can show you:
- Average collections as a percent of billed charges
- Average days in A/R
- Total accounts that are overdue (< 30 days, 31-60 days, 61-90 days, and 90+ days)
- Payer mix, and collection rates by payer
- Denied and rejected claims
This information can help you identify the areas where you need to make changes. For example, if you have an average days in A/R of 90 then you need to focus on speeding up collection efforts. If you have a high volume of denied or rejected claims, you need to check insurance eligibility upfront or address issues on your medical billing and coding team.
Prompt Patient Collections
An increasing number of patients either have no insurance or are covered by a high deductible health plan (HDHP), and total costs covered by patients has risen 30% since 2015. That means much of the cost burden for basic care is now on the patient instead of insurance payers. That makes it harder to collect and impacts cash flow.
As time passes, you are also less likely to collect on outstanding bills, and by some estimates, you may only recover 20 to 50% of outstanding bills that are more than 90 days overdue.
Sending out bills to patients immediately is essential but it’s even better if you can estimate the patient’s total due at the time of the appointment and collect it while they are in your clinic. Your practice management software plays a role in that by estimating total due and identifying patients with HDHPs who have not yet met their deductible.
Flexible Options for Payment
Medical bills can be high, and some patients simply choose not to pay because they can’t afford it all at once. Another option for clinics to be able to collect some—or all—of an outstanding bill is to offer payment plans that break up a larger bill into smaller, more manageable monthly amounts. You can set that up with a patient when they arrive, or have them set it up after their appointment, and automatically debit the amount from a specified account each month.
When it comes to revenue cycle management, small changes can make a big impact on your clinic’s financial position. Learn more about how AdvancedMD can help with our integrated suite of practice management software.