30
Mar 2016

How to Wipe Out Patient AR

by Billed Right Admin


You may think that your practice is doing financially well, you may be right. But, if you are amongst the majority of the nation’s doctors, you may be missing out on about 1/3 of your revenue and you don’t even know it. To put things in perspective, the Medical Group Management Association (MGMA) had a study done in regard to this issue. According to the MGMA’s findings, the current national average of unpaid charges within the last 120 days due to patient responsibility is a staggering $53,000.

How does $53,000 go uncollected?
There are several ways that patients can accumulate debt:

  • Patients are unable to pay off a large one-time expense. Expenses like these may come from emergency procedures, unexpected illnesses, hospital stays, etc.
  • Patients are being asked to pay for services that should be paid for by their insurance companies. You might ask, why don’t they pay for patients visits?
  • Nowadays with the 100s of plans available, patients may fail to pay their monthly premium, causing insurances to either reject claims or even take money back from you!
  • Patients may not meet their very high deductibles, which means the insurance does not pay you, just yet. Or, it may be sent to patient as a statement and you know what happens next. Not much.
  • Your practice may have a large group of patients who use a low-cost HMO. Most of those patients probably have substantial co-insurance or deductibles. They may be making their low monthly payments while receiving frequent medical care from your practice, but eventually when you perform an uncovered procedure or they have a brand new deductible in the New Year, their balance sky rockets past their monthly fee. Now those patients are in a hole with their balances growing faster than their payments can handle.

Once these holes and well understood in your practice, we can integrate several strategies to solve the growing problem and collect funds owed to you.

Collecting payments before procedures
  • This is probably the most efficient way to cut down on patient balances. Approximately 2-3 days before seeing a patient, Billed Right contacts insurance company to determine what portion of the bill is the patients’ responsibility. That is, copay, deductibles and coinsurances.
  • Subsequently, the patient should pay that portion before being seen.
  • Collecting a payment before a procedure will cover any balance as well as inform the patient that there is a portion of the bill that they are required to pay. As efficient as this approach may be, it does have its setbacks. During a procedure or surgery, there can be complications that directly affect the bill at the end of the day. Also, deductibles or insurance policies can change throughout the continued care of many patients.

Make insurance companies pay what they owe
This is more of a compliance issue than anything. It is vital that clean claims are being sent to insurance companies. The slightest detail can get a claim kicked back and have the balance wrongfully transferred to a patient. When a patient receives a bill for something they know is covered under their insurance policy, they can become very upset. The easiest way to overcome this ordeal is for our team to quality check all claims being sent out. Also, when a claim is denied, our team knows that it’s best to investigate why it has been kicked back as opposed to simply transferring to the patient. These simple steps can keep patients from receiving an unwarranted bill and also save your practice much valued time and money in the long run.

Ask for what you are owed
Although the previously mentioned solutions will help, there will still be patients who owe you money. At this point it’s best to collect the full amount as quickly as possible. Medical facilities do not work like credit card companies. You don’t earn an interest on any revolving balance, on the contrary, you’re losing revenue owed to you. Our team will always request the full amount owed in statements sent to patients. A simple step to take is to glance at patient balance prior to them checking in and ask them to pay a portion of their outstanding. No threats needed, only to inform the patient you are willing to work with them and any financial hardship they face.

Revise payment agreements
At the end of the day, no matter what, there will be several patients that cannot afford to make one large payment. So if you are like most doctors, you come up with a payment plan so that medical care becomes affordable to the patient while you still get what is owed to you. However, over time certain balances will grow faster than what the payment plan is taking care of. What should’ve taken maybe about a year to pay off, now will take up to 5 years because of the growing balance. To prevent this from happening, you should always make a statement in your agreement with the patient that “upon added services, the agreed upon payment plan will be revised to suit the growing balance.” A friendly letter that states that a patient’s payment plan needs to be revised can be sent to current patients that need a revision.

End of year results
Now that you are equipped with the knowledge of how important it is to collect patient balances, you should see a significant spike in your end of year reports. All that needs to be done is a bit of tweaking and implementing on our end. You can rest assured that these implementations will take your practice into a brighter year and an even brighter future!