Creating Strong Financial Structure For Your Practice

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Creating Strong Financial Structure For Your
Practice
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Creating Strong Financial Structure For Your
Practice
With competition is increasing, and
reimbursements are decreasing, every dollar
counts for most medical practices. Yet many
practice owners have fallen into bad business
habits that are costing them money. Patients and
insurance carriers have changed their payment
expectations, and practices are lagging behind,
relying on outdated systems and processes to
collect money. Practice budgets lack essential
details needed for planning which leads to cash
crunches at inopportune times. In this article,
we shared some basic tips which will help in
creating a strong financial structure for your
practice. Forecast Practice Collection The first
step to improving a practices cash flow is
making sure a system exists to track and manage
it. Its the most common mistake that providers
do not have a cash flow management system at all.
Also, make sure your staff is well aware of this
system and medical billing process flow.
Practices need a thorough understanding of whats
going to happen in the practice in the next year,
including when people get paid, whether its
salary or bonuses and if investments in medical
equipment are needed, as well as all the regular
costs that need to be accounted for. Its not the
same as the PL forecast because its the actual
cash you need out the door that youre going to
need to make. The forecast needs to also consider
expected patient volumes. For example, are you
going to have a lot more patient visits during
flu season? Its just understanding all those
nuances of your practice that is really key for
any kind of forecasting ability.
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Creating Strong Financial Structure For Your
Practice
Manage Cost The quickest way to boost cash flow
is to cut costs, but for medical practices, most
costs are usually salaries. Practices need to
understand the costs of physicians, nurses, and
office staff and be willing to make adjustments
based on forecasts. A common mistake is having
the same staffing all year when the volume is
cyclical. In the down months, hours should be
reduced. Whether to lease or buy equipment is
another consideration. Likewise, buying an office
space for the practice instead of leasing may
make sense in some cases. Understand Payer
Contracts Practices need to spend time
understanding their payer contracts because the
reimbursements are where the revenue cycle
starts. Having copies of the contracts with
reimbursement rates allows practices to project
revenue based on past patient volume and current
procedural terminology codes and to double-check
those actual reimbursements match with the
contracted rates. Practices should track key
metrics for each payer. For example, if certain
procedures are being denied but then paid on
appeal 90 percent of the time, thats something
that can be discussed at the next negotiation.
Eliminating denials will boost cash flow by
speeding reimbursement from the payer and freeing
staff time for other activities.
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Creating Strong Financial Structure For Your
Practice
Collect Patient Responsibility The system needs
to also include a commitment to communicating
with patients what their financial
responsibilities are before the appointment and
then collecting the money due while they are in
the office. And more important than that, you
also set up the outstanding balances from
previous visits. Most offices send letters about
balances due to patients but dont always realize
that the same patient might be coming in for a
visit that week. One of the things that most
organizations do not do well is they dont have a
firm policy and standards on how to set the plan
up for the front office staff. To make sure
patients can pay the practice, offer financing
options. More patients are relying on
high-deductible plans, putting more of the burden
for payment on them rather than a payer. Be
careful not to focus exclusively on the largest
bills when trying to collect. It might be more
expedient to offer a patient a settlement with a
15 -20 percent discount just to get cash into the
practice rather than spending months trying to
collect the full amount. Improving cash flow
doesnt have to be complicated, but creating a
strong financial structure can be the difference
between success and failure. While you are
creating a viable financial policy, we can assist
you in collecting insurance and patient
reimbursements. Medisys Data Solutions is a
leading medical billing company providing
complete medical billing services for your
practice. We can handle the biggest challenge of
your RCM i.e., accurate collection of insurance
and patient reimbursements. To know more about
how we handle medical billing challenges, contact
us at info_at_medisysdata.com/ 302-261-9187
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