The medical revenue cycle begins at patient registration. Up to 70% of the data a practice needs for billing is giving at this moment. It’s no wonder then, that with the consistent increase in patient payment responsibilities, and rising amounts of bad debt, providers in the healthcare industry are finding it more and more important to collect balances and copays at the point of service.
These point of service collections (POS collections) are critical to your revenue cycle management. A strong POS collection strategy can give your cash flow a boost and reduce back-end office work.
(Learn how Charge Lag affects your revenue cycle management.)
Why POS Collections Are Important
Patient responsibilities, such as copays and deductibles, continue to increase, year after year. At MEREM Health, a medical billing service company, we believe these responsibilities will only continue to increase.
According to the Medical Group Managers Association (MGMA), deductibles have increased by almost 700% since 2005. Additionally, deductibles once accounted for 4% of provider collections. Today, they estimate almost 21% of the dollars providers collect. With those kinds of calculations, poor POS collections are likely to cause a practice’s overall revenue to plummet.
What Happens With Poor POS Collection Management
If a practice fails to take care of co-pays and deductibles at the point of service, many things can go wrong. As a medical billing service company, we often see one of three major points of failure occur:
- The practice may become six times less likely to collect that money at any time in the future.
- A practice’s back office and billing staff may have to take on the heavy workload of appealing claims, answering patient questions, and credentialing. These are all superfluous tasks that take time and waste money and can be avoided with the right strategy
- A practice might see a shift in patients and payors based on their lax approach toward the point of service collections, which results in increasing bad debt.
Just one of these scenarios would be harmful to a practice’s revenue cycle, but all three would be completely destructive. Without the proper amount of working capital, a practice would simply have to shut down.
Push POS Collections or Hire A Medical Billing Service Company
Overall, it’s hard for many physicians to push their patients for payments. That is because the focus is, and should be, on patient care. However, physicians shouldn’t look at enforcing POS collections as a strategy that is negative to their patients.
Think of it this way: the last time you went to get your oil changed, your mechanic didn’t provide you that service for free, and your oil was changed perfectly. Asking for an upfront payment does not reflect on the type of healthcare you will provide a patient, it simply ensures your practice can continue running smoothly.
Set patient expectations. Patients are more likely to pay at the point of service if they knew they were going to have to ahead of time. Make sure your staff and billing departments are on the same page. Everyone must understand the importance of POS collections for a difference to be made. No one can be lax.
Create a daily monitoring process that your employees can refer to in order to best manage point of service collections. Determine what patients have significant outstanding balances, and develop a strategy to call them prior to their appointment and discuss how to pay or to get a payment plan in place.
All of this should really help boost productivity, and your bottom line, but getting on track with POS collections can be difficult, especially if you were once a very forgiving practice. The best way to ensure your POS collections don’t make a negative impact on your revenue cycle is to hire a medical billing service company.
Interested in getting the help you need? Contact MEREM Healthcare Solutions Today.