“A physician’s office is akin to the hotel service,” says Marchelle Cagle with
Cagle Medical Consulting. “We’re a service industry, and you want to set your patients at ease and build a good relationship, so they’ll return.”
But with uncollected medical bills running as high as 50 percent nationwide, collections must also be made priority at the time of visit. “But patients don’t want to talk about money at the time of the visit, because they’re often ill, scared or feeling vulnerable anyway. So put good collection processes in place to make the most of the interaction,” Cagle says.
Cardiology PC, the practice Cagle manages, began handing out financial policies that patients must sign on their initial visit. “They know right off what’s expected of them and how we can help, if needed, during hardship,” Cagle says.
That one shift in process dropped Cardiology PC collections by over 40 percent. “It cut out a lot of confusion and reduced the majority of our calls to being about balance amounts, rather than statement questions,” Cagle says.
Another strategy that often results in a sharp drop in balances due is to have the practice collect the copay before the patient sees the doctor. “And if they don’t have insurance, they also need to pay a certain amount before seeing the physician,” says Tracy Powell, business manager at Physicians Resource Network.
“If they don’t have any money with them, tell them where the nearest ATM is or give them a prepaid postage envelope, and ask them to please drop a check in the mail when they get home,” says Judy Campodonico, director of operations at MRG Management Services.
Just collecting money at the time of service isn’t enough, though. One practice collected a straight three dollars from every patient, no matter the actual copay amount. “You may think you’re keeping cash flow going with that process, but you’re costing the practice money,” Cagle says. With statements costing the practice up to five dollars in labor and materials, an outstanding balance on a copay gets eaten away quickly in collection costs.”
Cagle adds that the front office should also be trained to ask for past balances along with the copay. “When we started taking past balances due and doing more discussions with patients in private, we increased our cash flow by over 20 percent.”
Private discussions with patients have proven to be a potent tool in collections. “But your front office staff should be bubbly and happy personalities, and you don’t want that person confronting someone with nonpayment,” Campodonico says. “That should be the practice manager.”
Cagle says to give patients options when they fall on hard times to help raise collections. “For instance, give them discounts for paying the majority of their bill by credit card over the telephone. Or give them a payment plan, and if they agree to pay the minimum amount each month, you’ll reduce the total bill.”
To create consistency and fairness in evaluating patients in need, Cagle suggests using the Alabama poverty scale and federal recommendations. “Once we did this, and worked with them, patients that never made payments starting making payments,” Cagle says.
“Our staff didn’t realize so many people were telling them stories and not really in need. It was a real shocker when the first lady turned in her W2 along with her income and utilities statements, and she had $2,500 coming to her each month from a very nice retirement plan. This has taught my staff what indigent really means,” Cagle says.
But the woman paid her bill. “Because we gave her an audience, and we were professional,” Cagle says. "This has improved our relationships with patients. They felt finally someone listened to them and sympathized when they couldn’t pay the whole amount.”
Campodonico says that utilizing the cycle billing feature on the management software can generate a great revenue boost. Rather than sending out statements only one day each month, send statements out weekly.
The cycle billing feature allows practices to bill weekly and collect monies throughout the month while ensuring patients are billed only once every 30 days. “Otherwise you have charges sitting there for weeks without even a chance of being collected, because you only bill on the second Tuesday of every month,” Campodonico says.
Weekly billing keeps the revenue stream coming in more steadily. “And the calls and questions to our billing department don’t just come in a surge during that one time each month. This keeps it all even throughout the month,” Campodonico says.
She warns that collections can also become waylaid within the office itself and not get billed immediately. “Sometimes the chart gets pulled for the nurses to make calls or set tests, and then it doesn’t get to billing. So verify the super bills against the schedule every day, so you know all charges have been captured,” Campodonico says.
The most vital money saver, says everyone, is accurate patient information. “Train the front office, because the receptionist is the most important person in collections,” Powell says. “They have the chance to review and correct insurance and personal information at the time of service with the patient. Face-to-face. Otherwise it’s your billing office spending resources trying to get in contact with the patient for that information. So train that person well, and it pays off.”