As Medical Billing & Collection (MBC) celebrates its 30th year of partnering with consultants in private practice, Simon Brignall marks its pearl anniversary milestone by sharing some pearls of wisdom gathered over the last three decades.
Split the two sides of a practice
An often overlooked but important benefit from outsourcing medical billing is fewer conversations with patients that involve the mixing of two subjects: medicine and money.
So split the two sides of private practice. There are real benefits to be gained if you do.
Dividing the payment pathway from the patients’ clinical journey allows your medical secretary to maintain a warm and engaging relationship with them because they no longer have to have those difficult conversations about outstanding invoices.
Many medical secretaries find these discussions challenging and I have noticed that this is one of the reasons the money bit is often deferred.
Split things up and it also makes the role of the billing company simpler because they are only required to have a focused dialogue about the bill with a patient.
If the patient wishes to then discuss any clinical matters, they are politely passed back to the practice. That improves the patient experience and benefits the practice because the secretary can focus on responding to new and existing patient inquiries.
Once the two aspects of the practice have been split, the consultant is free to be able to make decisions about future needs for staffing or the practice management software without this impacting the practice’s cash flow.
Be able to adapt to the changing landscape of private healthcare
The private healthcare sector is unrecognisable from where it was when MBC started and this has meant practices have had to adapt to often difficult and disruptive change.
New consultants entering private practice today face challenges and opportunities their more established colleagues never did.
Some of the major changes we have seen over the past ten years include:
A large reduction in fee schedules and consultation fees from the private medical insurers (PMIs). This has resulted in the average invoice value we raise dropping by 25%. So the practice must see many more patients to generate the same amount of revenue.
The introduction of raising invoices electronically to insurance companies – resulting in the need to have internal systems in the practice to facilitate this.
The sector has also seen a consolidation in the PMI sector resulting in the adoption of the acquisition companies’ fee schedules and coding principles. This has led to more downward pressure on fees.
The incredible rise of the self-pay market has driven the need for a range of payment pathway options to facilitate these patients, such as the ability to take card payments 24/7 and collect money up front. The impact of the pandemic on NHS waiting lists has only re-inforced this demand.
The Competition and Markets Authority investigation into private healthcare was a game-changer for the sector, with the reverberations still being felt today.
One of the main results of this is increased regulatory control through bodies such as the Private Healthcare Information Network, leading to practices having to provide greater transparency around the fees they charge.
We have provided advice and guidance to the practices we partner, alongside ever-increasing functionality to meet their needs. Some of the functions we have introduced include:
E-billing of patients and insurance companies;
24/7 payment collection;
Text message chasing of outstanding invoices;
Multi-payment pathways for self-pay patients;
24/7 access to your financial data;
Website payment links.
The rate of change over this period has increased, which has predominantly been driven by the increased adoption of new technology.
It is important to be aware of the impact or opportunities these developments will have and that you adjust accordingly. Partnering with an outsourced billing company ensures your practice is future proofed for what comes next.
Some common Q&As
From many conversations with consultants over the years, the two most common areas for discussion are about problems with their aged debt and how they can grow their practice.
1. How can I grow my practice?
This is a common topic, and it is not confined to consultants who are new to private practice. It does not have one simple answer, as your practice growth can be the result of many factors, such as location, specialty, experience and patient mix.
One thing is universal, however: the most successful practices take the time to review their activity and finances and make decisions based on data and not what they think they know about their practice.
It is very easy to make assumptions based on what was historically the case but which do not reflect the current situation.
To carry out a comprehensive review, a practice needs access to up-to-date accurate information. This should include the following:
- How much the practice has invoiced broken down by a range of criteria, including location, patient type (self-pay, insured, medico-legal), payment company (such as Bupa), the type of activity carried out and where their patients are coming from.
- How much is outstanding from the work you have carried out, as it is vital that you are being paid for the work you are doing.
Our consultants have the advantage of 24/7 access to our reporting platform, which includes an array of reports to interrogate their practice data.
We use this information as part of the review process to see if it is appropriate to add another location to attract a different patient mix or to analyse the type of activity the practice is conducting and how that compares to what was previously carried out.
This allows the practice to review how it markets its services to both its patients, through its website and hospital consultant page, as well as its referral network including GPs and colleagues.
Even established consultants can benefit from taking the time to update their referral network that they offer a new popular treatment.
I am often asked to provide activity data to assist a consultant who is carrying 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 these are targeted where they will derive the most benefit.
2. Problems with aged debt
It comes as no surprise that many of the questions I am asked are about outstanding debt. Common examples are:
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 give you everything?
We have been asked to assist practices with over £300,000 in outstanding invoices many times, including a couple of amounts around £1m from clinics. Legally, we can go back six years in relation to unpaid debts.
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.
Experience with outstanding debts depends on many factors, but we commonly collect over 90% of the backlog. For anything we are unable to collect, we ensure bad debts are written off against tax, because we provide end-of-year tax reports to consultants’ accountants.
My recommendation to new clients is to do a spring clean, because 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 clinic.
Hopefully, these pearls of wisdom will be useful for you as we look forward to continuing helping consultants for many more years to come.
Simon Brignall (right) is director of business development at Medical Billing and Collection