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Working Hard for the A.R. Money

[By Staff Writers]  

Just as location is a critical element in locating a medical practice, collecting your ARs is an important critical element in maintaining the financial health of your medical practice. Your practice is not a bank and an effective billing system should be complemented by an efficient collection system.  

Policy Setting 

A policy that is too conservative may results in poor collection rates while an aggressive policy may be counterproductive and increase liability.  Have collectors call early and often. Waiting only encourages patients to pay late.

Use the 80/20 rule and concentrate on your biggest accounts first.  Get non-performing receivables off the books. Accounts over about 120 day should be turned over to third party agents. Out-sourcing to collection agencies vary significantly in terms of quality and results.  Most charge from 30 to 50% of what they collect.

Collection Agency Selection Criteria 

According to John Broderick, an executive staffing consultant from New York, the following should be considered when selecting a collection agency or using in-house personnel: 

• Assertiveness and Analytical Skills: Collectors should be able to break a billing problem into component parts and aggressively pursue each part without being unduly tactless.
• Creativeness and Curiosity: Collectors should keep abreast of new computer and software technology and pursue innovative philosophies related to the billing process.
• Empathy and Communicativeness: Collectors should be able to communicate with both patients and doctors, yet still be able to put themselves in others’ shoes to view problems from each perspective.
• Perspective and Stability:  Collectors should be able to see the patients entire economic picture and maintain an emotionally objective and neutral attitude toward the collection process.
• Integrity and Tenacity: Collectors should have steadfast attitude and still earn the trust of clients, relative and the doctor employer. Collections should be in immediately since waiting 
• Salary: An entry level full time office billing collector should be familiar with all States laws regarding the collection process and be paid in the mid 20-Ks per annum.  If not, after some time he or she may take their experience and training to another office for considerably more compensation.

Claims Court 

Remember, small claims court is the last avenue for payment. Often a decision has to be made whether to forgive or “write off” a patient’s balance if indemnity insurance coverage is maintained and this decision is best made on an individual basis.  

Unfortunately, malpractice claims have resulted by pursing past due accounts too aggressively.  This is especially true with surgical patients and it is best to pursue payment diplomatically, gently and often forgivingly.

Assessment

You could be losing money if your practice is still using a traditional checking account for its daily cash activities.

One way to make your cash work more effectively is to open a cash management account with a brokerage firm. This will ensure that your practice’s money is earning a much higher rate of interest. 

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OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

• PRACTICES: www.BusinessofMedicalPractice.com
• HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
• CLINICS: http://www.crcpress.com/product/isbn/9781439879900
• ADVISORS: www.CertifiedMedicalPlanner.org
• FINANCE: Financial Planning for Physicians and Advisors
• INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
• Dictionary of Health Economics and Finance
• Dictionary of Health Information Technology and Security
• Dictionary of Health Insurance and Managed Care

Filed under: Practice Management |