My Receivables Are Growing: Time for a New Billing Service?

Laurie Morgan May 15th, 2012

7 Comments Latest by COMMENTOR NAME

When receivables balloon, that could be a sign that your billing service is not as on top of things as it should be. But it's not the only possibility

We’ve received several calls recently from physicians looking for referrals for new billing services.  The reason?  “Our receivables are out of control.  Our billing service just isn’t doing a good job.”

When receivables balloon, that could be a sign that your biller is not as on top of things as he or she should be.  But, that’s not the only possibility.  If you jump the gun and replace your in-house biller or billing service without understanding all of the drivers of higher receivables, you could end up worse off than you started.  Some other potential causes for growing receivables that you should investigate:

  • Are you collecting deductibles – or billing for them?  Funny how these “I need a new biller!” calls tend to come more frequently in the beginning of the year – when patients’ deductibles are reset, and patients will be responsible for your entire allowed revenue in many cases.  Too often, practices just get into the habit of billing for these amounts, instead of collecting at time of service – usually because “that’s how we’ve always done it.”  Once you decide to bill the amount instead of collecting it, you’ve significantly reduced the likelihood it will be paid promptly – and introduced the possibility you won’t get paid at all.
  • Are patients prepped for payment at visit time?  Patients who arrive at the practice without being forewarned about what they’ll be expected to pay are much more likely to request that they be billed – and then to be angry or confused when they receive the bill so many weeks later.  Work with payers to determine patient responsibility before the patient’s appointment, and then let patients know what they’ll be expected to pay when you make their reminder call – including clearing of past-due balances, if any.
  • Are you making it easy for patients to pay?  If a patient has a high deductible or large balance, or is about to undergo an expensive procedure, paying in full by check at the time of service may be impossible.  Be sure you accept all major credit cards to make it easy for patients to pay when cash is short (this way, they’ll make their payments to their credit card company – and your staff won’t have to become collectors).  Investigate specialty lending options for patients for significant expenses like elective surgeries.
  • Are your office staff members aware that billing starts with them? Too often, compartmentalized job responsibilities obscure the contribution everyone in the practice should be making to bringing revenue in the door.  With about a third of most practices’ total revenue now due from patients, today’s revenue cycle is about more than just third-party billing.  Make sure your front desk staff, in particular, understands that the practice is entitled to be paid for its services – asking for payment at the time-of-service is nothing to feel awkward or embarrassed about.  A weekly audit of superbills can be a great tool to assess front-desk consistency in collecting from patients – if they’re not doing so close to 100% of the time, corrective action is needed.
  • For insurance-side receivables, are you seeing patterns?  If reimbursement revenue is slowing, it’s helpful to analyze whether it’s happening across the board – or if a single payer is causing the bulk of the problem.  If repeated denials and appeals are to blame, is a repeated coding or documentation error occurring?  And if a payer is becoming increasingly difficult, your biller may need to request a new support contact at the payer – and, if the relationship and reimbursement reliability can’t be improved, you may eventually need to consider whether to renew your contract with a difficult payer.

Laurie Morgan is a management consultant with Capko & Company. She specializes in marketing, management and technology for medical practices and blogs about practice management issues at www.capko.com/blog. Laurie has a BA in Economics from Brown University and an MBA from Stanford. Laurie recently wrote for Getting Paid on Hidden Ways Medical Billing Shortcomings Hurt Your Practice and Keeping Tabs on Payer Contracts – Good for Your Practice and Your Patients, Too.

7 Comments »

    Alicia said:

    This is a great article in regards to collecting deductibles up front. Many billers and practices are not aware that they can do this and many times wait till it is met by the patient.

    Tuesday, May 15, 2012 - 1:42 pm

    Kathy McCoy, MBA said:

    Alicia, thanks and glad you liked the post. We agree–it’s something billers and practices need to consider now that the patient responsibility is averaging 30% of practice revenue. That makes collecting up front essential.

    Tuesday, May 15, 2012 - 4:58 pm

    Leah said:

    Very good article. As a biller with 22 years experience, 8 of it as a billing service owner, I can tell you that collections problems are so frequently because someone on the front lines dropped the ball – not anyone in the billing office.

    Wednesday, May 16, 2012 - 7:13 am

    Kathy McCoy, MBA said:

    Leah, thanks for your comments. We agree–it’s best to analyze the causes to avoid prematurely assigning blame. There are many steps between the encounter and sending the claim, and it’s best to make sure the entire process is working the way it should.

    Wednesday, May 16, 2012 - 9:10 am

    Kathy, said:

    With almost 30 years experience in billing, I believe the front desk is the first line of defense in collecting payment. Most patients will make payment if asked. And those that won’t probably won’t pay later either. Secondly, providers should not get involved in discussing financial issues with patients. They should refer the patient to the billing office/person. That allows the provider to focus on healthcare and not become involved in “negotiations” over patient responsibility.

    Tuesday, June 5, 2012 - 7:16 am

    Kathy McCoy, MBA said:

    Excellent points, Kathy! We especially agree that providers should not get involved in discussing financial issues with patients. That’s for the office staff to handle, so that providers can focus on caring for patients. Thanks for your comments!

    Tuesday, June 5, 2012 - 1:22 pm

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