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Still Sending Three Statements and Expecting That Patients will Pay?

Posted in Practice Management Solutions | Jan 2012 | Comments (0)

Tags: medical practice management tipsorthopaedic practice managementmedical billingmedical practice cost controlpatient communicationmedical practice revenue enhancementpractice managementcollections

If your practice is not yet taking steps to collect from your patients prior to or at the time of service, you are probably caught up in the seemingly never-ending cycle of sending one, two, three or more statements to patients, hoping that they will pay you for your services. You’re not alone.

According to the Medical Group Management Association (MGMA) Practice Perspectives on Patient Payments research published in April 2010, practices send an average of 3.3 billing statements before a patient’s outstanding balance is paid in full. Furthermore, just $15.77 for every $100 owed is recovered once a patient’s bad debt is turned over to collections.

Most practices find that outstanding patient balances – typically deductibles and co-insurance – end up as bad debt after insurance has paid its portion. Patients just don’t pay it. Yours is the last bill to be paid after the mortgage, utility bills and car loans. And if they do pay your bill, you’re waiting 60 to 120 days for the money, which is a major challenge to your staff in accounts receivable.

By the time you pay someone to track the account, send billing statements, make phone calls, refer the account to collections and pay those fees, you might as well have performed the work for free. The good news is that you can take several steps to break free from this inefficient revenue cycle:

  • Change your collections procedures
  • Implement new tools and technology that help you collect more from patients prior to or at the time of service
  • Develop a clear financial policy, train staff to enforce it and communicate it

While you may think that these recommendations represent a monumental task, consider the alternative. In the same April 2010 MGMA study, participating practices reported that over 23% of total patient services revenue is attributed to collections from patients. Respondents also reported that they wrote off an average of 11.3% of total accounts receivable from patients in the prior fiscal year. If a practice’s total revenues are $4 million annually, and 23% is attributed to patients, that’s equal to $920,000. At 11.3%, this practice would be writing off $104,000 a year. And this figure doesn’t even include the time and resources expended for billing and attempting to collect on the debt. How much is your practice writing off each year? Isn’t it important that you get paid for the work you do, in an efficient and timely manner?



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