Tag Archives: billing

Best Practices For Billing and Collections

16 Nov

Collections should not be thought of as something that only happens on the back end of the billing process. It should start by properly conveying your policies and expectations in advance to both patients and staff. Here are some tips you can implement in your practice to improve your patient collections at little or no cost.

Office Visits – Front Desk Responsibilities

1) Patients need to understand and acknowledge in writing that they are personally responsible for any charges not covered by insurance. They should be required to sign your financial policy at every visit, not just the first visit in order to remind them of their obligations. This should reduce the number of patients who have the attitude that their insurance made a mistake and it’s therefore not their problem.

2) Of course you always want to collect co-pays at the time of visit, but what does your staff do when a patient says they didn’t bring any form of payment? Turning the patient away is costly both in terms of a wasted appointment slot as well as the potential loss of that patient’s future revenue. Instead, train your staff to introduce themselves by first name to make a connection and then hand the patient a pre-addressed envelope to remit funds when they get home. For example, “My name is Karen and I’ve written my name on this envelope along with our address. As soon as you get home today, please put your check in this envelope and mail it back to my attention as I will be keeping an eye out for it.”

What to include and not include on your billing statements

3) Is your phone # on your bills? This may seem obvious, but some bills do not show a phone # and that delays payment by making it more difficult for a patient to call if they want to set up a payment plan or ask a question about their bill. Now they have to take the time to look up your phone # and they may put that off until later.

4) Is there a due date on your bill or do you just show the date the bill was generated? Many bills do not show a specific due date which implies that payment is due whenever the patient feels like paying.

5) Are penalties specified for violating terms? Is there any consequence to paying late? Why not include a late charge in order to give your bill priority over other bills which don’t incur penalties? A flat late fee is much easier to manage than a percentage of balance.

6) Do you show aging boxes on your statements? The use of aging boxes on statements which show 30, 60, 90, etc balances conveys exactly the opposite of what you want. It shows that you expect your patients’ balances to age and you’ve even made a provision for that right on your statements when you really want to convey an expectation of getting paid as soon as the bill is received. Aging boxes also train patients to only pay the portion of the balance that is the oldest rather than paying off the balance in full.

7) The use of colored paper for late reminders is helpful in getting patients’ attention as they stand out among the pile of white paper in a patient’s stack of bills.

Establishing Internal Collections Policies

8) Just like other aspects of your employee handbook, your collections policies should be in writing. This makes it easier when training new employees and demonstrates the importance placed on collections. Include performance benchmarks ($ collected or # calls made during a specific time period or establish a maximum % of AR over 60 days). Review and update your collections policy as needed while keeping it clear and simple. Determine how returned mail should be handled.

9) Define “past-due” and include the next steps for handling a past-due account. How many written contacts will be sent? How many phone calls will be made? When will this follow up occur and at what intervals? Evidence shows it is best to vary the form of follow up at regular intervals of 7-14 days.

A recommended process would be 2 mailed bills + 1 phone call + 1 warning letter and this should all occur within 90 days or less. If a patient has been asked to pay 4x in 90 days and you’ve gotten no response, they’re sending you a message and need to be in the hands of a third party agency because continued first party efforts at that point will not generate a good ROI.

Making Collections calls

10) Be careful when leaving voice messages so as not to “advertise” a debt owed to your practice when your message might be heard by others in the household.  Ensure that your staff is fully compliant with all Federal, State and Local Regulations regarding first party collections and telephone calls, or utilize a service to make these calls for you who is compliant.

11) Try to make a connection with the debtor by speaking clearly and enthusiastically. And stay firm by using phrases such as “It’s my policy that….”

12) Make the call with the mental attitude that you will get payment in full on one call, not that you’re going through a list and making calls just to get it over with. Your mental attitude affects what comes out of your mouth, so expect success!

13) If a patient says they don’t have enough money to pay their balance, ask, “How much are you short?” rather than, “How much can you pay?” This small change in language conveys an expectation that the majority of the funds are available and that you’ll be working out a payment plan for the smaller remaining balance.

14) Never make “idle threats”. It is a violation of collections laws to threaten to send a patient to collections unless using a collection agency is a normal practice for you.

15) Train your collector to take good notes so that if they have subsequent conversations with the patient, you can refer back to their notes and if that staff member leaves, it will be a good starting point for someone else to pick up their work.

Avoid Costly Violations

Use only an employee or a licensed 3rd party agency/attorney to collect for you, never an unlicensed 3rd party.  Only use 3rd parties who are committed to full compliance to all Federal, State and Local regulations regarding both first and third party collections.  Only use a 3rd party who provides you with a “hold harmless”” agreement as a matter of course.

Do not share information about a balance due with parties other than the debtor or their spouse. For example, if you call the debtor’s office and someone else answers the phone, do not leave a message about a balance due, only a message to return your call. 



Prior to discussing any patient A/R information with anyone outside your practice, make sure that you have a HIPAA Business Associate Agreement signed and on file with the individual or agency.

Collection Myths

All of these items are things to consider when establishing your practice’s individual collection policy, but they are not legal requirements.

  • There is no law that says you have to warn a patient that you’re going to send them to collections before you do.
  • There is no law that says you have to wait a certain number of days before sending a patient to collections.
  • There is no law that says that if a patient is paying $5/month that you can’t send them to collections.

Contact Me Directly

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Call me directly at 770-224-8504 or 888-780-1333
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Email me at David.wiener@cashflowstrategies.us

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First-Party vs. Third-Party Accounts Receivable

30 Nov

You know that understanding the details of how your accounts receivable department works is vital to the long-term success of your business. Without diligent attention, it can become one of the biggest financial headaches within your company.

Accounts receivable can be handled in one of two ways: first-party and third-party management. This may seem self-explanatory; first-party means your company manages AR in-house, while third-party means you’ve outsourced to an outside company. This is true on the surface, but there is a secondary way to look at the issue. First-party accounts receivable management can also mean that a separate company handles your AR.

To understand how this is possible, it’s important to look at the process of collecting on outstanding accounts, and at which stage first- and third-party management are best utilized.

 

Identifying Which Collection Strategy Is Best For You

In the business world, it is inevitable that some of your customers will fail to settle their account in a timely manner. Some may need a gentle reminder or two, while others may need to implement a repayment plan to meet their obligation. Others will simply not pay at all. You know that the longer your company goes without recouping those funds, the harder it is for your cash flow to remain healthy.

If your company is looking for a streamlined approach to collecting on overdue accounts, you can enlist the help of an outside company to handle both first-party and third-party management.

 

Early Stages – First-Party Management

When the account is only slightly overdue, first-party management is recommended. This is when all communication with the customer appears to come directly from your company, even if a separate company is handling it. First-party management is about trying to cure an account or prevent a loss, so early intervention is crucial. The treatment of accounts worked first-party and in a pre-charge off situation, is often the same.

At TSI, our goal is to become an extension of your back-end operations, streamlining the first-party collection process for you. Your branding and communication guidelines are strictly followed. Reminder letters and calls are common during this stage. We strive to maintain a relationship with the customer and help everybody reach a workable solution.

 

Later Stages – Third-Party Management

The decision to move to third-party management is usually due to the failure of a customer to respond to earlier messages. People commonly refer to this stage as ‘being in collections;’ communications are now coming directly from a separate company. The third-party is still acting on behalf of your business. Post-charge off work would also fall under this stage.

With third-party management, other tactics can now be used to locate the customer and bring the account up-to-date, aiming to instill a sense of urgency in the debtor. Third-party management is often more regulated than first-party and is always covered under the FDCPA (Fair Debt Collection Practices Act).

Ultimately, third-party management is about liquidating the total balance written off, and TSI can help. Our diplomatic process is designed to maintain a positive relationship with the customer while encouraging them to settle their account quickly. We utilize our proprietary data analytics platform and collection tactics including skip tracing, credit bureau reporting, and bankruptcy monitoring to increase your liquidity rates and develop more accurate revenue forecasting.

But the real value of our operations is in our people. You can rely on our seasoned collection experts to work diligently on your behalf, backed by extensive training and support.

 

Reach Your Goals With A Trusted Partner

Working together with a partner from the early stages can benefit both you and your customers. It allows the partner to become familiar with an account in receivables right from the beginning, so they can better judge if and when to move an account from first-party to third-party status.

It also relieves the burden from your in-house staff of having to chase down overdue accounts. Your team can focus on other areas of the company to keep operations running smoothly, knowing that a trusted partner is acting on your behalf to bring your accounts receivables up to date.

Finally, you can develop a customized approach to give your customers an integrated experience, which could result in a higher percentage of accounts being settled during the early stages.

TSI is committed to providing personalized services to your customers, maintaining and enhancing relationships while helping you recoup lost revenue. Our integrated collections platform combines best-in-class technologies with data-driven workflows to facilitate effective and compliant operations for our clients. Contact me today to explore your options.

Source: TSI

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Statistics That Will Shake Up Your Accounts Receivable

31 Oct

If you sell products or services on credit, then chances are that the words “accounts receivable” are enough to give you a headache.

Nevertheless, successfully managing your collections department is critical to your growth as a business. Recent numbers suggest that uncollected receivables could cost your company into the hundreds of thousands of dollars. Plus, surveys show that most businesses aren’t that great at staying on top of them.

Let’s take a closer look at how much your collections are costing your business, and what you can do to fix it.

Numbers Don’t Lie

Figures from Inside Account Receivables Management clearly illustrate how receivables lose significant value over time. By the time they are 90 days overdue or more, they could be worth only 20% of their original value:

Not only is value lost on the money owed, but overburdened AR departments can cost your company in other ways. Increased workload, reduced productivity and resorting to bank debt to maintain cash flow are all symptoms of poor collections practices.

A payment practices study in 2016 proving that even though it’s costing them money, many American companies have room for improvement when managing their collections:

  • On average, companies write off 1.5% of their receivables as bad debt.
  • 93% of businesses experience late payments from customers.
  • 47% of credit sales are paid late.
  • Average payment terms are 27 days, but actual payment period averages 34 days.
  • Survey participants see maintaining cash flow levels as a key challenge that is critical to business profitability.

 

Clearly, your accounts receivables could be costing your business a sizeable sum. However, there are a few best practices that you can implement today that will help to tighten up your collections department and allow you to put money back into your business.

Do The Math

The first step is to calculate your average collection period. This will give you a clear idea of the number of days on average it takes for your business to see receivables turn into cash.

A very informative post on The Balance outlines exactly how to perform this calculation. It requires some basic financial information about your business:

Days in Period x Average Accounts Receivable / Net Credit Sales = Average Days to Collection

Let’s break that formula down to its basic elements:

Days in Period — This can vary; it could be 365 days or 90 days; whatever works best within your business. The key is that however long this period is, all other parts of the formula must span the same number of days.

Average Accounts Receivable — Using the period of time established above, total the accounts receivable both at the beginning and at the end of the period. Then divide it by 2.

Net Credit Sales — This is the total of your gross sales minus the total of all returns during the set period.

For example, Company XYZ sees that their outstanding account receivables sit at $30,000 at the beginning of the year. By the end of the same year, they have risen to $36,000. Net credit sales came to $100,000 by the end of the year.

Using this example, the formula looks like this:

365 x 33,000 / 100,000 = 120.45

According to the math, it takes an average of 120 days for Company XYZ to see their account receivables resolved and translated into all-important cash flow.

Next Steps

Now that you have an idea of how long it takes credit customers to pay you, you can implement strategies to improve. For instance:

  • Narrow your credit requirements to cut down on credit-consumers
  • Train staff to clearly illustrate credit payment policies
  • Be prepared to enforce your credit policies
  • Incentivize early payment
  • Consider enlisting outside help to manage accounts receivable

We are dedicated to helping companies collect their accounts receivable while maintaining customer service excellence. Our years of experience can help you streamline the process of debt collection, now and for the future, while optimizing cash flow and increasing productivity in all areas of your business. Contact me today to learn more.

Source: TSI

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Top 10 Reasons Why Dentists Should Carry Their Own Dental Coverage

8 Jun

CFS DENTAL OFFICE

If you have a dental practice, you should seriously consider setting up your own self-administered dental plan.  Here’s why:

  • Dental insurance covers less and costs more every year for patients
  • Dental insurance pays the dental office less and less every year
  • You can customize a dental coverage plan to meet the specific needs of your practice
  • Patients and staff always know how much is covered and what remains
  • Far easier to administer than conventional insurance plans
  • Makes dental care more affordable to the patient, resulting in more treatment plan acceptance
  • Provides treatment to patient immediately
  • The dentist earns a greater portion of service than paid by insurance companies
  • Patients will stay in the practice longer
  • Patients will get treatment they would otherwise neglect.

The purpose of the Private Dental Plan program is to help the patient receive immediate and personalized service through a dental service plan and allow the dentist to keep more money for their services.  This self-administered dental service plan allows dental offices to offer access to dental coverage for those who would not normally be able to afford it.

Through my new affiliation with Dental Practice Services, Inc., I am now able to assist practices in getting set up with such a plan.  Please contact me for more information about how your practice can benefit from a personalized self-administered dental plan.

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INSURANCE MONEY WON’T PAY YOUR BILLS ANYMORE, DOC!

16 Jun

I was told today by a doctor that he refrains from pushing too hard to collect from a patient who owes him money, because of all the money he makes on the patient from insurance companies.  He is willing to write off patient balances, to keep making insurance money from the patient visits, and doesn’t want to offend the patient into leaving the practice by insisting he pay his bill.

This is the general attitude many doctors had 25-30 years ago.  It may have had some validity back them but times have changed!  Insurance money alone will not keep your doors open and your lights on any more doc.  You are putting your practice in jeopardy by not seeing what is happening around you!

High deductible health plans are the norm these days, and co-insurance is rising all the time.  Despite what the government tells us, there are more and more patients who do not have insurance, or have adequate insurance.  Self pay is now the highest payer in the medical world behind Medicare and Medicaid, and it is catching up fast.  According to recent statistics, patient balances now represent over 35% of a doctors income and soon, if major changes aren’t made, will be over 50%.

You can’t wish it away, or ignore it away.  You MUST find a way to motivate patients to pay you, and pay you faster than before.

Medicine, whether you like or not, or understand it or not, is a business.  You are trading a service for money, and the patient knows it.  They also know when you are leaving them alone about their bill so that you can continue to collect insurance money. Not only do they know, but guess who they tell?  EVERYBODY!!!  And guess what happens?  You get all the patients who don’t want to pay their bills.  Great!  Until, that is, until you watch your patient A/R go through the roof.  By the time you see this happen, you are already in trouble.

Don’t waste time.  There are automated tools to help your practice both maintain your good relationships with your patients, AND get them to pay you their portion of the bill sooner.  Call me today at 888-780-1333 and I will tell you about them.  Isn’t it worth 20-30 minutes of your time to keep the lights on in your practice over the long haul?

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Is It Time To Dismount?

5 May

My father was a wise man. He used to tell me, “If you find out that your horse has died, it is a good idea to dismount.”

I’ve found, in my experience, that many medical and dental practices are riding a dead horse, and it is definitely time to dismount.

How many things in your practice are being done the same way they were 20 years ago? 10 years? 5 years? If you are like most practices, your answer will be “nothing!” But, if you think about it, the one thing that is being done the same way it has been for a long time is the way you collect money from patients and insurance companies that owe you money.

Sending a monthly statement, and calling (when you get the time to do so) does not work any more to motivate your slow pay and delinquent patients to pay your bill. Calling, waiting on hold, and nagging insurance companies doesn’t get you paid on time either. And do you have any idea how much having employees on hold that long will cost you in a month?

Over the years, we have determined that there are four distinct types of patient payers. Each one requires a different approach to motivate them to pay you, and it is a mistake to treat all of them the same. It is hard, if not impossible, for you to determine which is which quickly and inexpensively in-house.

We have also found a much more economical and effective way to motivate the insurance companies who are dragging their feet, making excuses, and ignoring your calls to get you paid faster.

Transworld Systems can help you update and automate your A/R processes for both insurance and patients. The cost will normally be less than what you are paying now to do what you do in-house, and the results will be MUCH better than riding a “dead horse.”

Contact David Wiener at 888-780-1333 or email me at david.wiener@transworldsystems.com

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Medical and Dental Practices: Is insurance follow-up eating up your staff time?

11 Feb

Insurance companies have a vested interest in paying your practice as slowly as possible. They will delay, deny, and “on-hold” you to death just to keep your money a few days longer and earn interest on that money.

 

Living “on-hold” with insurance companies seems to be a way of life for some of your office staff, as clerks search forever for claim information. Sitting and waiting while they look up claims is costing you big time, not just in employee salaries, but also in lost productive time.

 

What if there was a highly effective, inexpensive way to motivate insurance companies to contact you regarding those claims? What if you didn’t have to waste the time of your employees “on-hold?” What if you could get an answer or your money more quickly?

 

Transworld Systems, a sponsored program with the AMA, a Preferred Vendor with the MGMA, and the largest collector of medical debt in the US, has a unique Insurance Resolution service that you can use to make these things a reality. For a low flat fee per claim, you can have them contact the insurance companies for you. When the insurance companies are contacted by a third party such as Transworld Systems, they will treat the inquiry with much higher priority than they will when they are contacted by your practice or a hospital. When receiving a third party inquiry, they are required to escalate the inquiry to a supervisor, and then have the supervisor contact your practice to resolve the claim.

It’s quick, it’s inexpensive, and it’s easy. And best of all, you can have your “on-hold” person spend their time on something less frustrating and more profitable for your practice.

It is just one of a whole suite of services that Transworld Systems can provide for your practice to help you get paid faster by both patients and insurance companies. Contact me for a free 30 minute demonstration of their services and a no-obligation analysis of your Accounts Receivable. Call me at 888-780-1333, or email me at davidhwiener@gmail.com.

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Tools To Help You Get Paid Faster

6 Sep

acceleratorinfographic

 

Are you having a hard time finding the time to contact your customers or patients regarding payments?  Let Transworld Systems help you Accelerate your payments and improve your cash flow with Accelerator.

The below infographic illustrates the benefits of Accelerator and how we can help you get paid faster!  Don’t wait until 60, 90 or 120 days for you outstanding invoices.  The sooner you react, the sooner you can get paid the money you are owed!

Call me, David, directly at 888-780-1333 for a free overview of the tools that can help you motivate your customers and patients to pay you sooner, while maintaining your good relationship with them.

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Top 10 Tips To Improve Collections (Part 2)

7 May

It’s a problem faced by virtually every business and medical practice – how to deal with customers / patients who pay their bill late, or not at all.  While customers and patients expect prompt and professional service, they don’t always meet the same standard when it comes to paying their bill.

Accounts not paid promptly can severely impact the cash flow of a business or practice.  A clearly defined and carefully communicated, yet diplomatic payment policy, may help avoid difficult collections situations.

Tip #2

INVOICE PROMPTLY AND SEND STATEMENTS REGULARLY

If your business/practice doesn’t systematically invoice and bill, start now.  Many times bills aren’t paid simply because the customer/patient hasn’t been billed or reminded in a timely manner.  Monthly statements aren’t enough anymore.  Each customer/patient should be reminded at the least every two weeks.  The lack of accomplishing this often occurs in smaller or newer businesses or practices where there isn’t enough staff to handle the invoicing and billing properly.  If staffing or the cost of regular systematic, frequent follow-up is an issue in your case, help is available to get it done in a economical manner.  With our economy today, there is no replacement for getting this done one way or another.

Contact me if you would like information on ways to get this accomplished in your own situation.  The consultation is free.

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