How To Improve Cash flow For Your Private Health Practice?

Cash flow can be an essential indicator of the health and success of your healthcare practice. It can indicate where your practice needs improvement.

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Why is cash flow important in healthcare?

Why is cash flow important in healthcare?

As well as cash flow being an essential indicator of the health and success of your healthcare practice, it can influence business strategies and any decisions as to where your practice needs improvement. If used well, cash flow analysis can be a better tool to understand your finances and your business’s future direction. It can be a great asset to your healthcare practice, and employing it right can put your business in good standing. 

However, this isn’t as easy as it sounds. Collecting owed money is a process that has become increasingly difficult in healthcare. For instance, in the last two months, FICO has de-emphasized medical debt on credit scores, meaning that money that patients owe to hospitals and healthcare professionals does not influence credit ratings as they used to. They have become less significant, with around 30% of Americans also having inactive account collections, contributing to this pressure. 

Healthcare practices should now be prepared to compete for collectible money, which previously was not a significant priority nor concern. This means staying on top of patient accounts with delayed pay and employing new tools to ensure cash flow efficiency with your accounts receivable sitting at a reasonable to a high number. All financial concerns, such as medical coding and billing, must also be continually monitored at a high level.

Practical tips for maximizing cash flow in your private practice

To make the most of your healthcare practice, there are various tools you can employ to increase and maximize your cash flow. Mastering these skills and techniques will have immeasurable value for your business. This way, you can also ensure high-quality healthcare billing and coding processes:

  • Patient payment and billing -With the de-emphasization of medical debt, providers must follow up with payers. Posting payments can be burdensome for patients who frequently use bank bill pay services, as they don’t usually have the correct information. This can cause delay by the bill pay company, which slows down your cash flow. Electronic lockbox or e-bill solutions can resolve this issue to ensure that you are paid promptly. Third-party payment portals can help with online payments for those who do not make checks and other point-of-sale card options. As for patient billing, ensuring that all medical services and equipment are coded for can also increase cash flow, with correct claims submitted to the clearinghouse. 
  • Using a lockbox - Establishing a lockbox with a trusted provider can minimize any confusion with changing financial, regulatory, and technological changes in the healthcare environment. Using a lockbox will provide you with quick access to your finances and receivables and speed up the collection cycle. All of your digital data becomes searchable, as well as it being hosted on a HIPAA compliant platform. Lockbox services allow you to account for all cash effectively, and the organizational approach is likely to strengthen relationships with patients due to its ease of use. 
  • Optical Character Recognition (OCR) - In conjunction with lockbox use, OCR means paper EOBs (Explanation of Benefits) can digitalize information by producing an electronic 835. This means that once data is translated into an electronic format, it can be compared to payment data and integrated into the management system.
  • Payment re-association and posting - Re-association takes 835 electronic remittance data, either collected from the patient or payer or created by the lockbox from an EOB. This is then compared to payment data within the current bank account. Adhering to detailed criteria means cash can be matched to payers, with any missing money identified. This then creates a posting file, which is then integrated back into the management system. 

If this all sounds overwhelming, some healthcare businesses provide software to guide you along this process and help increase your cash flow. For instance, Carepatron offers medical billing services for optimizing cash flow by providing resources that incorporate high-quality guidelines to ensure your information is accurate in the payment process. These advanced services can significantly elevate the quality of your services and prioritize patient needs while supplying stability in the cash flow process.

Practical tips for maximizing cash flow in your private practice
Why is patient payment an important part of a healthy cash flow?

Why is patient payment an important part of a healthy cash flow?

Patient payment is a large part of the cash flow process, as they contribute to your healthcare’s revenue and overall finances. As a result, any lapses in this stream can cause various issues, especially down the line. Patient payments must be made on time, including any out-of-pocket fees, because as these accumulate over time, your practice may need to rely more on credit to meet payroll. This is in addition to operating at a functional level with sufficient supplies, which can be difficult when credit is needed to meet revenue goals. 

Billing and coding errors can also be concerning, as incorrect codes can lead to inaccurate bills that need to be amended or resubmitted. This causes delay on the patient’s end, but also on the practitioner’s end for needing to assign the correct codes and going through the claims processing cycle once more. Medical insurance needs to have the correct billing and coding, so this can cause further delay on their end in terms of reimbursements. While some services, such as Carepatron, provide medical billing and coding services to reduce the likelihood of such mistakes occurring, healthcare businesses must understand that patient payment is a significant aspect of cash flow. For it to run smoothly, patient payment must be up to date and by the proper billing and coding techniques.

Private medical practice billing tips and guidelines

To ensure you are providing the best quality service that optimizes cash flow through good certified medical billing and coding, we have compiled some tips and guidelines to follow:

  • Consider outsourcing - Outsourcing can increase cash flow for your business by employing professionals who have experience and are skilled in the area of medical billing. This means your claims are less likely to be denied or rejected, and your practice can have faster reimbursement rates. This also eliminates the need for costs for bringing on another employee, such as salary. If you are a specialized healthcare company, employing specialists in a particular field can be immensely beneficial. 
  • EHR systems - EHR systems can code for information immediately following appointments with patients, vastly reducing coding errors. They also allow for more effective communication between practitioners and patients.
  • Confirm patient eligibility - Verify patients’ benefits when an appointment has been created to speed up the process and reduce denied claims.
  • Use key performance indicators - Use critical metrics to track accounts receivable to ensure you are on target and succeeding financially as a business.
  • Staff training - With the proper knowledge, your staff can become more productive and achieve business goals. For example, you can ensure that a minimum of 90% of co-pays is paid promptly to improve cash flow. 

Final thoughts

Improving your cash flow should be a top priority for your business to ensure success and stability for your finances. There are various ways you can do so. However, the most efficient methods are implementing easy patient payment processes and developing and mastering medical billing and coding practices. Ensuring that you have the correct billing and coding guidelines set means you can have a fast and easy claims submission process, eliminating time and money in re-editing. 

Many healthcare business practices incorporate advanced software to guide you in the right direction, including Carepatron. Carepatron provides medical billing and coding services to help solidify your understanding and make sure you assign the correct codes promptly with reduced errors. Considering patient payment will significantly elevate the quality of your practice, the sooner you master the skill, the sooner your practice can reap the benefits in your cash flow. 

Further reading:

Private medical practice billing tips and guidelines

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