What does a billing firm do for me?
With outstanding invoices nudging the £1m mark in some clinics, Simon Brignall answers the most common questions he is asked by consultants when they finally act to get their money back.
Consultants have many questions for me when I meet up with them to discuss their payment problems.
But some occur again and again – so I thought I would share them and answer them here.
Outstanding debt
It will come as no surprise that many of the questions I am asked are about outstanding debt. These regularly include:
What is the most you have ever been given to chase?
How far can you go back?
What is your collection success rate?
Should I pass you all of my outstanding invoices?
We have been asked to assist practices with over £300,000 in outstanding invoices a few times. In two cases with clinics, it was close to £1m. We got nearly all of it back.
Legally, you can go back six years to try and recover unpaid debts.
Medical Billing and Collection (MBC) maintains bad debts across the life of the company of less than 0.5% when we have been responsible for the entire billing cycle.
The collection of outstanding debt depends on many factors, but it is quite common for us to collect over 90% of the backlog. We ensure that anything we are unable to collect is identified so that consultants can obtain the appropriate tax relief.
I always recommend doctors use the transition to MBC as something of a spring clean, as it makes sense to pass us everything so we can run it through our chase process.
This is managed sensitively, as we explain to patients that we have recently taken on the billing role for the practice.
How can I grow my practice?
Without a doubt, this is one of the most frequently asked questions and it is not confined to those consultants who are new to private practice.
Of course, this a massive question and it has no simple answer. Your practice growth can be the result of many factors, such as location, specialty, experience and patient mix.
But one thing is universal: the most successful private practices take the time to review their activity and finances.
They make decisions based on data and not what they think they know about their practice.
It is easy to make assumptions, based on historical data and information, that do not reflect the current situation. To conduct a comprehensive review, a practice needs to access up-to-date accurate information about its business.
This should include:
1. How much the practice has invoiced.
This should be broken down into a range of criteria including location, patient type – for example, self-pay, private medical insured and medico-legal – specific payment company, type of activity carried out and where patients are coming from.
2. How much is outstanding from the work you have carried out.
It is obviously vital for you to be paid for the work you are doing.
MBC provides consultants with 24/7 access to its reporting platform, which includes an array of reports which can be used to analyse their practice data.
We use this information as part of a review process to see the patient mix at each hospital where the consultant does private practice or to analyse practice activity and how that compares to what was previously carried out.
This allows the practice to review how it markets its services to its patients, through its website and hospital consultants page, as well as its referral network of GPs and colleagues.
Even established consultants can benefit from taking the time to update their referral network with information about any new treatment they are offering.
We are able to input a referring doctor’s name or other marketing source to monitor where patients are coming from.
I am often asked to provide activity data to assist consultants when they carry out an annual review of their fees.
It is important that a consultant’s fee schedule should remain competitive and reflect both their expertise and the demand for their services.
Having activity data broken down by patient payment type enables a practice to calculate the impact of any fee changes it implements and ensure that these are targeted where they will derive the most benefit.
3. My medical secretary does the billing, so why do I need a billing company?
Probably the most important, and often overlooked, benefit from using a medical billing company is that it ensures your medical secretary can maintain a clinical relationship with the patient, unhampered by the business side of the practice.
Outsourcing allows this relationship to remain warm and engaging by compartmentalising the two sides of the practice, leaving the billing company to focus on the business side and those difficult conversations about money.
This improves the patient experience and benefits the practice, as the secretary can focus on responding to new and existing patient inquiries.
Often the medical secretary is responsible for many tasks, including patient engagement, diary management, medical letters and booking theatres and tests on top of the billing and chasing.
There are not many individuals who have the combined skill set required to complete all these tasks perfectly, as well as find the time to fit them all into a busy working week.
The explosion in email and other digital methods of communication from patients means they are often just running to keep up.
Impossible task
It is an almost impossible task for one person to cope with, especially as the practice continues to grow.
In our experience, once the practice reaches a certain size, the secretary is so busy dealing with the patients and the medical side of the practice that the billing and collection is the area that often gets neglected, leading to problems with cash flow and aged debt.
Not all medical secretaries enjoy chasing outstanding debt, but for those that do, there is an associated opportunity cost.
Managing patient inquiries is a more productive use of their time instead of being stuck on hold with an insurance company. We often see practice revenues rising after they join us because they can focus more on the clinical side of their work, leaving the finances to us.
A billing company can also add functionality that may not be available through your current medical secretary. We offer our clients the ability to:
Invoice both patients and private medical insurers electronically;
Take payments 24/7 through our online payment portal;
Collect payment up front when required;
Access their practice financial data on a 24/7 basis;
Ability to settle multiple outstanding invoices at the same time.
Outsourcing to a medical billing and collection company also means that any issues around staffing no longer impact the practice finances.
Simon Brignall (right) is director of business development at Medical Billing and Collection
