The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants

Forewarned is Forearmed

Dr. David E. Marcinko MBA CMP™

By Dr. Gary L. Bode; MSA, CPA, CMP™

http://www.CertifiedMedicalPlanner.org

All hospitals, medical clinics, healthcare entities, and doctors are aware that accounts receivable (ARs) represent money that is owed to them, usually by a patient, insurance company, health maintenance organization (HMO), Medicare, Medicaid, or other third party payor. In the reimbursement climate that exists today, it is not unusual for ARs to represent 75% of a hospital’s investments in current assets. And, a medical practice may have ARs in the range of several hundred thousand dollars. ARs are a major source of cash flow, and cash flow is the life-blood of any healthcare entity. It pays bills, meets office payroll, and satisfies operational obligations.

Avoidance Management

The best way to manage AR problems is to avoid them in the first place by implementing a good system of AR control. Answering the following questions may help upgrade a system of AR control:

• Is an AR policy in place for the collection of self-pay accounts (de minimus and maximus amounts, annual percentage rate (APR), terms, penalties, etc.)?
• Do employees receive proper AR, bad debt, and follow-up training within legal guidelines?
• Are AR exceptions approved by the doctor, office manager, or accounting department, or require individual scrutiny?
• Are AR policies in place for dealing with hardship cases, pro bono work, co-pay waivers, discounts, or no-charges?
• Are collection procedures within legal guidelines?
• Are AR policies in place for dealing with past due notices, telephone calls, dunning messages, collection agencies, small claims court, and other collection methods?
• Are guidelines in place for handling hospital, clinic, or medical practice consultations, unpaid claims, refilling of claims, and appealing claims?
• Are office AR policies periodically revised and reviewed, with employee input?
• Does the doctor, hospital, or clinic agree with and support the guidelines?

Assessment

It is  typical that poor control occurs because the doctor and/or hospital is too busy treating patients, or the front office or administrative staff does not have, or follow a good system of AR control.

www.MedicalBusinessAdvisors.com

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

Subscribe Now: Did you like this Medical Executive-Post, or find it helpful, interesting and informative? Want to get the latest ME-Ps delivered to your email box each morning? Just subscribe using the link below. You can unsubscribe at any time. Security is assured.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Sponsors Welcomed

And, credible sponsors and like-minded advertisers are always welcomed.

Link: https://healthcarefinancials.wordpress.com/2007/11/11/advertise

***

Filed under: "Doctors Only", Accounting, Glossary Terms, Healthcare Finance, iMBA, Inc., Practice Management, Recommended Books | Tagged: Accounting, accounts payable, accounts receivable, APR, APs, ARs, co-payments, david marcinko, Gary Bode, healthcare accounting, HMO, MCO, medical accounting, medical billing, medical invoices, www.certifiedmedicalplanner.com, www.healthcarefinancials.com, www.healthdictionaryseries.com, www.medicalbusinessadvisors.com | 2 Comments »