Posted by Ashley Jones, Global Payments Integrated
The healthcare space is rapidly changing. It is an industry that has not been immune from the need for digital transformation, especially as telehealth options have become more prevalent.
Given these changes, improving cash flow is at the top of the priority list for many medical practices. Not only is cash flow critical to a practice’s success, but it should also be efficiently managed. Most practices struggle in this area. They are bound to the capabilities of their practice management software, and if that system is lacking effective payments, AR, billing, and collections functionality, they are dead in the water.
There are many different factors that can impact cash flow:
- Whether or not patients pay on time
- Delinquent account depreciation/disintegrating value of A/R
- How efficient cash flow/AR solutions are
- Health of billing and collections processes
Medical practices should look to their practice management software to see if they are actively addressing these challenges. Let us see how some of these hurdles impact medical practices and how integrated payments within practice management software meet these important needs.
On-Time Payments
A TransUnion Healthcare analysis reported that patients saw an 11% increase in average out-of-pocket costs in 2017 — increasing from $1,630 in Q4 2016 to $1,813 in Q4 2017. That analysis pointed out that while nearly half (49%) of out-of-pocket costs were under $500 in 2017, 39% were between $501 and $1,000, and 12% were over $1,000.
This shift of financial burden away from payers and onto patients means that practices must be more cognizant of cash flow than ever. The reality is that patients are less reliable than insurers when it comes to making payments, and some patients simply cannot pay the entire bill. A new report from the Centers for Disease Control and Prevention shows that roughly 1 in 7 people say their families struggle to pay medical bills.
This ripple effect can be felt by medical practices, especially at the beginning of the year when deductibles reset and patients find themselves responsible for the bulk of the payment burden.
Delinquent Accounts
A 2014 report by the Consumer Financial Protection Bureau found that nearly 43 million Americans have unpaid medical debt hanging over their heads. In fact, half of all overdue debt reported on Americans' credit reports comes from medical expenses. This can happen for several reasons, ranging from a misunderstanding of which doctors are in-network, surprise medical bills, hospital stays, or ambulance rides.
The issue of delinquent medical bills is complex for the healthcare industry, which faces more scrutiny than traditional commercial businesses when it comes to collection practices. Most consumers face an onslaught of texts, phone calls, and letters from cell phone companies and other commercial businesses when a bill is past due. Medical practices often send just one statement and only resort to following up by phone after 90 days.
Integrated Payments Increase Collections for Practices
One of the most effective things a practice can do to increase collections is to make it as easy as possible for patients to pay. This means accepting a wide range of payment methods so that patients can pay using whichever method they have available at the time of the visit.
This means practices should be accepting credit and debit cards (via swipe or chip), cash, digital wallet, or check. Practices must keep a finger on the pulse of what patients’ insurance covers and what the copay total will be.
The ability for practices to keep credit card information on file (and facilitating the agreement for the patient to sign, allowing the practice to use it for billing) is also important. This also requires adherence to PCI requirements, which the right practice management software can make simple for practices. The ability to set up recurring payments goes hand-in-hand here to allow practices to automatically process patient payments.
All payments, regardless of how they are taken, should post automatically to the patient’s ledger, offering clarity and transparency into a practice’s accounts receivable.
Wrapping Value Around Payments
The payments piece is an important component for any practice management software, but the best ones will take it a step further to help practice customers streamline things from start to finish.
Meditab has a payments partnership with Global Payments Integrated, which more than removes friction from the payments experience. Their tools and services can help your practice drive engagement, drive commerce, improve customer experience — and ultimately, improve cash flow.
Discover how integrated payment processing can help your practice reduce churn, no-shows, and revenue cycle management, and improve cash flow today.
Ashley Jones is the Marketing Content Coordinator at Global Payments Integrated, where she is responsible for digital content strategy, development, and analysis.
This post was originally published on globalpaymentsintegrated.com.