Dear Dangerously in Love With Your Finances,
We are a 3 year-old, insurance-based naturopathic family medicine practice located in Oregon. Our staff includes an office manager, a medical assistant, and me. We also have an outside medical billing service taking care of our billing. We have quite a large dollar amount of billing – in my opinion – that are over 90 days due. I am concerned about how much of this amount may be uncollectible revenue.
~ Concerned about My Revenue
Dear Concerned about My Revenue,
I am so happy that you are reading your receivable reports. May I ask: how often are you reading them? Monthly is the standard practice. However, I advise to obtain, read, and question weekly.
It usually takes insurance companies 30-45 days to pay a claim, if submitted claims are perfect.
Before you start writing claims off as uncollectible revenue, I recommend the following for claims outstanding for 60, 90 or more days:
- Have a conversation with the billing company and have them explain the reason behind the outstanding claims.
- Develop a complete understanding of the billing company’s process and how their process integrates with your office procedures.
My questions to you:
- How involved is the office manager with collecting payments before and after each doctor’s visit? Is this task part of his/her job description? If not, it should be.
- Is the medical billing service also checking the patient’s health insurance? If so, is there communication with your office to know what the patient needs to pay or owe a balance?
- Is your office manager comfortable with discussing finances with patients?
Having quite a large balance that is 90 days overdue can be quite concerning for such a small medical practice. I suggest that you try your best to work on getting these receivables down. Develop and implement a plan with your billing agency and your office manager to make calls to collect as much money as possible. Make sure you have your credit card machine available to collect the outstanding balance via a credit card. This method ensures immediate payment.
Developing a financial plan for your business is key to growth and success. Here’s an older blog I wrote with some basic steps to creating your financial goals.
Lastly, communication is key between your staff, your billing agency, and your patients.
Please let me know if you do need assistance in calculating the amount that can be deemed as uncollectible revenue.
Good Luck! As always, stay dangerously in love with your finances.