Cash crisis control
Simon Brignall discusses some of the key billing and collection issues every doctor’s private practice can learn from the pandemic.
The impact of Covid-19 was the dominant theme of 2020 for all of us working in the private healthcare sector.
We are now in our third national lockdown, but thankfully we are seeing the roll-out of vaccines and we can begin to see the light at the end of the tunnel.
I was looking back at the articles I wrote last year as we entered the first lockdown and thinking about the many inquiries I have received to determine the key areas of concern and how they could be effectively managed.
The issues that practices faced were broken down into the following key areas:
Cash flow;
Fluctuations in activity;
Staffing.
I thought, with the benefit of hindsight, it would be useful to discuss each of these issues and the steps you can take to address them.
Cash flow
Private practice is like any other business, which means cash flow is king. Problems around cash flow can cause even successful practices problems with paying staff and suppliers, let alone generating necessary income for the consultant.
It is important to understand the key areas that can impact your cash flow.
Delays in invoicing
It is vital that your work is invoiced promptly, as this will ensure you have a reliable cash flow and allow you to keep debt to a minimum.
Raising invoices in a timely manner enables billing issues to be picked up earlier and boosts the likelihood they can be resolved quickly.
Bear in mind that the raising of an invoice is the first link in the billing chain, therefore problems at the start can cause delays in the whole process.
This is important, as some private medical insurers have rules around time limits on sending them your invoices, which means that they can sometimes deny payment, leading to lost income for the practice.
At Medical Billing & Collection (MBC), we invoice the main insurers electronically, which ensures we have a dispatch record that can be referenced to resolve any dispute.
Last year, I received many calls from concerned consultants whose secretary had fallen behind on the billing for a range of reasons, resulting in the practice either losing income or experiencing cash flow difficulties.
Reconciliation and invoicing of outstanding payments
The most common inquiry was from doctors who felt that while there was not a problem with their billing, they did have concerns around the chasing process.
Quite often they did not have visibility on what was outstanding for the practice or the data they had access to was not up to date.
It is important to ensure you have accurate information on what money is owed to the practice, as only then can you implement a robust chase process.
This can only be achieved if payments are allocated to the relevant invoice in a timely fashion. This will allow any outstanding balances to be identified and, where a patient is liable, an invoice to be raised accordingly.
Chasing process
Having identified which invoices are outstanding, it is important to have a chase process that is not only robust but routinely applied.
This will ensure that issues around problem payers are highlighted and where there is a discrepancy with the invoice, you can seek to rectify the problem.
By making the payment process as simple as possible and providing a range of payment options you minimise the delay in the invoice being settled.
At MBC, patients can pay their invoice at a time that is convenient to them via our online 24-hour payment portal, which improves our collection rate.
We average bad debts of less than 0.5%.
Our experience from last year indicates that most practices experienced fluctuations in the revenue side of the business, which is why it is important to ensure that there is a constant focus in this area to minimise the impact to the practice.
Fluctuations in activity
We partner with over 1,500 consultants and we saw a range of impacts to their practices. Some specialties which easily accommodated the move to remote consultations were less impacted, such as mental health.
Other specialties where remote consultations were also an option but relied on access to hospital facilities for their procedures built up waiting lists.
These patients were then accommodated as access to theatres and hospital facilities became available later in the year when we saw a return to pre-Covid volume levels.
For many practices, we implemented billing solutions where the switch to remote consultations meant they then wished to invoice self-pay patients electronically who previously paid on site.
We also had practices that were continuing to see patients face to face, but, due to social distancing requirements, preferred to not have patients congregate at the front desk while paying their bill.
We know that the pandemic has caused many patients to defer accessing healthcare for other issues and there is a pent-up demand for these services.
I have received many calls from consultants who were facing unpredictable revenues and were concerned about their cost structure. They wanted to ensure their costs were correlated against their received income, but they did not want to diminish their capacity to benefit from the recovery when it occurred.
However, our costs are calculated against received income, which means they easily adapt to changing circumstances, yet the practice still benefits from our capacity when its volumes recovers.
Staffing
As you would imagine, many calls I received in earlier lockdowns were from consultants facing problems to do with their medical secretary. They either had limited or no access to this key member of the team due to any of the following reasons:
- Health issues;
- Issues around managing childcare;
- Difficulties around working remotely;
- Early retirement.
They were aware that this was causing the practice to be impacted by some of the issues I have highlighted here, such as delays in invoicing and chasing and the accumulation of bad debts.
In larger organisations, you can ensure that any key member of staff is supported through cross- training; however, for many practices, the secretary is responsible for all aspects of the practice and often without any back-up.
The secretary is the shop window to your practice, dealing with patient engagement, diary management, medical letters and booking theatres and tests on top of the billing and chasing.
So it is easy to see that when they are unavailable, it is often the practice finances that suffers.
A simple yet effective solution to staffing issues may be to outsource the billing to a medical billing company who will then partner with the practice. The billing company will ensure you have service continuity around the business side of the practice.
Although the problems I have highlighted in this article can be addressed by the practice, it is often the simplest solution to partner with a medical billing company and see your business benefit from its experience.
This leaves you free to focus on your private practice and the delivery of care to your patients.
Simon Brignall (right) is director of business development at Medical Billing and Collection