Working to create a system for accelerating cash flow in your practice requires re-evaluating and updating your current processes to meet the demands of the modern patient. As patients become payers and out-of-pocket costs increase, developing a process for more effective patient collections will empower your collections team, help your practice avoid bad debt, and improve up-front collections.
Deploying Collection Initiatives
Before developing any new processes it’s a good idea to spend time cleaning up your current open accounts receivable so you can implement changes with a fresh start. This includes looking for ways to collect on open accounts instead of writing them off, as well as reviewing your current policies to ensure that all patients are being treated fairly.
Clean up of A/R
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Balance Corrections:
Review patient accounts (particularly ones that may have a guarantor) to see if there are any opportunities to match a patient credit to a patient debit in order to allocate cash appropriately and clear balances.
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Aged Accounts:
Consider offering patients with an aged balance a one-time patient prompt-pay discount. For instance, “If you can pay today in full, you’ll get this discount.” This will help clear balances while avoiding the bad debt process. Additionally, you could establish a standard payment plan on aged balances. For instance, for patients who aren’t incentivized to pay, try offering a payment plan to save their account from going to collections as a last effort to keep the balance active.
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Foundational Progress:
Work to align with practice stakeholders on financial policies including payment plan duration, interest bearing, balance thresholds, etc. Then, review your financial assistance policies together and ensure there is no ambiguity. Lastly, work together to develop an up-front financial transparency goal for your practice.
Know What You Can/Cannot Do
Prior to reworking your communication/collections strategy, it’s a good idea to be aware of the best practices around patient communication. We recommend familiarizing yourself with the following regulations to ensure your systems are compliant:
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The Fair Debit Collections Practices Act
This act regulates when, where and how you can collect as well as how aggressive you can be.
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Telephone Consumer Protection Act
This act regulates contact by phone, including the ability to be excluded from SMS/text.
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HIPAA
HIPAA regulates balance and patient adequate collection efforts along with the protection of data.
Evaluate Your Collection Process
The ways you communicate with your patients matter, especially when it comes to collections. A good place to start is to ask yourself the following questions and determine whether your current communication strategies are effective:
- When and how are you communicating with your patients?
- What is the frequency of the touchpoints?
Once you have evaluated these questions, the next step is to work to empower your collections team to redesign the parts of the process that could be stronger. Once those areas have been identified, a new policy can be developed and documented, and the collections team can be trained to have the necessary difficult financial conversations.
Design an Effective Process
When working to design a new, more effective process in a landscape where the patient is becoming the payer, it is necessary to create opportunities to communicate more effectively, using a normal statement cadence but supplementing them with modern follow-up actions. Consider opportunities to connect beyond traditional notices, such as text, phone calls, email, and using self-serve payment options to collect.
Collection Diagnostics
As you are putting your new processes in place, the following are a couple common metrics you can use as a diagnostic tool to better evaluate your patient collections:
- Total patient A/R (self pay vs. self pay after insurance)
- Patient A/R over 90 days
- Dormant payment accounts (no payment in over 60 days)
- Patient cash collected up front
- Bad debt/write offs
This is an excerpt from the webinar "Accelerating Cashflow Through Up-front Collection". Watch the full webinar here.
Read also:
Accelerating Cashflow Through Up-front Collection
Delivering an Up-front Patient Experience
