by Cindy Nyberg
When goods and services cost more, everyone is affected. However, the low-income households, those on fixed incomes and people in other social economic strata will be faced with harder choices that affect their health and wellbeing. While most people know it is important to have routine screening visits, these populations may defer essential care if there is not enough money in the budget to afford their co-pays. Patients with chronic care conditions may also be forced to make impossible trade-offs such as whether to give up some meals each week to pay for insulin or other maintenance medications. And for parents of children living close to the edge, these choices are even more gut wrenching.
These real-life scenarios show up in your accounts receivable or A/R. Regular monitoring in your RCM analytics platform will notice these trends in their earliest stages, giving you time to produce strategies to mitigate their effects on financial performance. When looking at your A/R data, here are some questions to ask to consider.
With the increased popularity of high-deductible health plans, patients are assuming more financial responsibility than ever before. A few years ago, patient payments averaged about 17% of my practice revenue. Today, that number is much closer to 25%. As a practice manager, I often tell staff that the patients pay your paychecks” since patient payments comprise around 25% of gross revenue (Less patient refunds.) Co-pay amounts are increasing too, and they become more expensive as settings of care become more acute.
At the most fundamental level, A/R is most highly influenced by two things:
1) Your ability to communicate financial responsibility.
2) Your ability to collect prior to or at the time of visit.
Are you a passive collector?
If you area passive collector, there may be a nice fat opportunity to improve A/R performance with some well-orchestrated data analysis and acting on the findings. Your organization sends out three statements, followed up by a notice for collections. Do you have a lot of hard copy statements that are mailed by USPS that are returned or being delivered slowly? What are your digital open rates? How do they compare to your peers? Are they too low? You are just a bit too eager to write off unpaid bills. If any of these statements describe current processes, you may be a passive collector. Even if only one of these is apt to you, there are likely some opportunities to enhance and accelerate your A/R.
Accounts Receivable is the lifeblood of healthcare organizations. You need to always be vigilantly monitoring A/R to ensure trends are picked up as soon as possible, allowing you the most advantageous position for responding. For example, is A/R trending downward? How does patient A/R compare with insurance A/R? What percentage of A/R is comprised by write-offs? Which component of A/R needs to be prioritized? What comes in second? And what are you going to do about it?
To status the health of your A/R and understand how important trends are progressing, you need fresh, readily available data. One-off and cobbled together Excel spreadsheets or custom reports gathered from a large EHR make it infinitely harder to spot opportunities as they begin to occur rather. These “home grown” and behemoth solutions may only give partial understanding. Because AI cannot be applied to spreadsheets to identify emerging patterns, you may not discover new trends for some time –putting you in reactive mode after A/R has already been affected.
About Cindy Nyberg
Cindy Nyberg owns Amaryllis, LLC, a medical practice management consultancy. Previously, Cindy served as CFO of Fulcrum Strategies and spent more than 6 years as CFO of one of the largest neurology practices in the country. In addition to her CPA credential, she also maintains her CPME and is an active member of MGMA.
Contact: cnyberg@amaryllisllc.com
2424 North Federal Highway, Suite 205
Boca Raton, FL 33431
