How Can You Manage Accounts Receivable?
With current economic instability and looming decreases in payer reimbursement, your practice needs to retain the maximum amount of each dollar earned. But because the struggling economy is also affecting your patients, collecting payments has likely become an expensive and frustrating burden.
Patient bad debt is becoming a serious threat to profitability for healthcare providers nationwide, representing an estimated $65 billion in uncollected revenues in 2010i. While self-pay patients do account for some of this debt, insured patients who neglect to pay post-insurance balances represents the fastest growing segment of individuals with outstanding medical bills. In a 2009 McKinsey survey of retail healthcare consumers, more than 74% of insured consumers are both willing and able to pay their out-of-pocket medical expenses for liabilities of less than $1,000 a year. Yet collection rates lag well behind these levels, even for lesser charges.
On average, a staggering 50% of every dollar billed to patients goes uncollected, even after sending as many as three billing statements; a costly process to any practice that yields little in return.
What steps can your practice take to increase patient collections in light of these changing dynamics?
Managing accounts receivable begins with:
- Good financial controls, including written financial policies and a process for holding staff accountable
- Using systems that support best practices
- Adoption of payment strategies and technology geared toward increasing patient collections at the point of care and minimizing the time and expense associated with capturing outstanding balances
- Effective patient communication that maintains positive relations with patients.