Physicians Practice Pearls: You Earned It, Now Collect It

I was recently brought in by a practice to conduct a billing and reimbursement audit. As part of the process, I asked the receptionists about over-the-counter bill collection. Each responded: “I do my best.”

The billing department, however, told a much different, less complimentary story. Which one was reality?

To find out, I pulled encounter forms from the previous week and discovered that although the receptionists collected the majority of co-pays, they only collected on previous balances 20 percent of the time, and didn’t collect anything for non-covered elective services.

One unfortunate outcome of today’s labyrinthine insurance infrastructure is more complex billing statements, which cause confusion among patients and the receptionists who collect the bills.

Nevertheless, it’s time for medical practices to become more proactive when it comes to getting paid - before a patient even shows up at your office.

Get a head start

Thanks to the Internet, you should know a patient’s insurance status before he arrives for an appointment. Train staffers to do this, and hold them accountable for payment at the time of service (called over-the-counter, or OTC, payments).

Inform the patient of your financial policies when scheduling an appointment. Post the policy on your Web site, your wall, and your patient statements to reinforce these expectations.

To help the practice set up an action plan, we developed a script for the receptionists to help them collect payments. The receptionists learned to research patient accounts so they could help patients understand what they owed. We redesigned the statement so patients could easily understand outstanding balances.

The receptionists now remind patients when confirming appointments of any existing balance, and instruct patients to bring payment to settle their bills. Physicians direct patients to the staff if payment questions arise during an exam. We also established OTC collection goals for the receptionists. When certain targets were hit, each receptionist earned four free movie tickets.

Within 60 days, the accounts receivable for aging accounts decreased dramatically. Within 90 days, the majority of patients arrived prepared, checkbook or credit card in hand. Time devoted to collecting on old account balances shrank from 15 hours a week to 10 hours a month.

Initially, some staff and physicians were concerned that the new policies would alienate patients, but in the end, patients were happier. Patient communication became better than ever. Patients paid for services when the care was fresh in their minds, greatly lessening frustrated questions about outstanding balances brought on by fading memories.

OTC payments became a win-win for this practice. It can work for you too.

Judy Capko, the founder of Capko & Company (www.capko.com), is a healthcare consultant with more than 20 years of experience. The author of “Secrets of the Best-Run Practices,” she has received national recognition in her field, working with both small and large practices, as well as major academic faculty practices. She can be reached at
805 499 9203, judy@capko.com, or via editor@physicianspractice.com.

This article originally appeared in the June 2007 issue of Physicians Practice.