Healthcare practices are no different from any other business in that they need a fluid cashflow to survive. Money must flow into the practice in a timely manner so providers can pay staff, cover overhead costs, purchase new equipment, and more. For some, cashflow has always been a challenge.
For example, when providers don’t submit claims in a timely manner, or they submit error-prone claims, it will result in payment delays or denials. For other providers, cashflow wasn’t a major problem until the implementation of the Affordable Care Act (ACA), which drove higher deductibles and an increase in patient financial responsibility. Patients often don’t understand the concept that a lower monthly premium translates to higher out-of-pocket costs. They’re surprised when they receive a bill, and many aren’t prepared (or willing) to pay it.
Another more recent challenge? COVID-19. As patient volumes dwindled, cashflow did as well. Practices can improve cashflow by applying these five important strategies:
1. Dig deeper to find out whether patients have insurance
Some patients may have insurance coverage and not know it, or they may not know exactly what they have (e.g., if they recently lost their job or switched jobs). Others may know their primary insurance but forget they have secondary insurance as well.
It’s in every practice’s best interest to identity all coverage because it’s easier to collect from insurance companies than it is from the patient. Some state Medicaid websites show whether patients have Medicaid or other coverage, adding practices can also partner with an eligibility/coverage vendor to identify coverage.
2. Look for contractual variances, then appeal
Writing off a $.50 balance doesn't seem like much, but what if the practice does this 200 times a month? That equates to $1,200 a year. Why do variances occur? Payers don’t pay the contracted amount (e.g., due to an incorrect contract load), or there are discrepancies in terms of interpreting the contractual language.
"A practice’s best bet is to work with a zero-balance vendor that can review adjudicated claims as quickly as possible and appeal these variances before the patient receives an Explanation of Benefits statement and before the practice bills the patient". “Choose a vendor that submits, collects, and manage denials”.
3. Arm front-desk staff with information
Verify each patient’s benefits the day before their appointment. This includes copayment, total deductible, deductible amount met, total out-of-pocket, and out-of-pocket amount met. Print this information, and show it to patients upon their arrival. When trying to collect from patients up-front, use this or similar language: ‘You have a copayment of $25; however, I see that your deductible is only at 10%. This means the likelihood of the balance being billed to you is very high. I would suggest putting down a partial payment today so it’s less you need to pay when you receive the bill.
Front desk staff should also have access to each patient’s history of payments, for example, if they know it typically takes a patient 180 days to pay, they could inquire whether the patient could benefit from a loan program or whether they might be eligible for Medicaid. This is where they can spend an extra minute or two engaging the patient.
4. Consider alternative service lines
For example, adding a telehealth option opens up revenue and cashflow opportunities. Other examples include diabetes or nutrition classes, chronic care management, or ancillary services.
5. Perform documentation and coding audits
Does documentation support all coded services, or could the practice be vulnerable to denials and costly recoupments? An investment in risk management is an investment in your cashflow.
Another question to consider: Do physicians document and capture all relevant quality metrics for the Merit-based Incentive Payment System (MIPS)? MIPS bonus payments can greatly improve cashflow as well. Practices that implement all these strategies will likely see an immediate improvement in cashflow. However, even starting small can help. The key is to do something because poor cashflow won’t improve on its own, he adds.
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Reference: Kareo, our technology partner