Many medical practices are crying the blues in this tough economy. At the same time, collecting from patients has gotten more challenging with more financial responsibility for healthcare services being placed on the patient. It doesn’t matter if you or your patients think it’s right or wrong; it’s time for the medical world to get serious about getting paid better for what you do.

It is not just a matter of billing the payer and tracking claims, it’s a matter of understanding payer and patient performance and accountability! Who in the practice is responsible for what in each piece of the collection process? Follow these steps and you are bound to see an improvement in collections and your financial picture.

1. Identify who is accountable and hold them to the task.

Begin with staff. Each staff member needs to understand his or her role in collections. This starts with collecting information about the patient and their insurance coverage. Next is making sure all services provided are documented on the routing slip or electronic record, and coded properly. The collection process starts when the charge is posted, but isn’t complete until the balance is paid by both the third party payer and the patient. Be clear on which staff members are responsible for each component of these processes.

2. Recognize that effective collections begin before the patient visit.

Your ability to collect more begins before the patient comes into the office. With new patients it’s a matter of checking eligibility and benefits and communicating your expectations. The perfect time to do this is when you confirm the appointment one or two days prior to the patient visit. If the patient has insurance with a plan you don’t accept, let them know how you expect to get paid.

For established patients, train schedulers to review the patient’s balance and inform patients of what they will be expected to pay at the appointment time. Then remind the patient when confirming the appointment. With new patients, eligibility and benefits need to be verified in advance. Then you can let the patient know what you expect from her (including collecting a balance that is on the books) before she arrives at the office. This is good communication and reinforces expectations. Then the patient should be prepared to make payment when they arrive for their appointment.

The reception staff will get on board and become more motivated if you set a standard they can relate to. Start by establishing concrete collection goals that outperform past results. For example, if you explore past trends and discover staff typically collects 50% of what could be collected for patients on a given day, set an over the counter (OTC) goal of 60% the first month, 70% the second and so on until the hit the optimal goal, which is probably 95%. Then celebrate their success with a pizza party, getting a half day off or even a small bonus. It adds to the excitement and motivates people to keep up the good work. Of course, if you expect staff to raise the bar from past performance, be sure you provide the training, tools and support they need to do a better job. One of those tools is establishing financial policies

3. Develop rock-solid financial policies.

Adjust those financial policies to reflect both the practice culture and the shift to more economic responsibility being placed on the patient. The goal is to ensure the practice gets paid for what it does and patients understand their responsibility. Physicians need to understand and agree on what they expect from patients and let the staff do their job to enforce the policy.

Include the entire staff in development and implementation of the policies; then staff will be more likely to buy-in to the process, which is necessary for a successful outcome. When policies and procedure are written, they can be used for training and to hold staff accountable. After that it’s a matter of monitor, monitor and monitor. The results will be worth it!

Financial policies unify the practice and improve consistency in the steps taken to collect revenue. To be effective, physicians and managers must define their expectations and clarify the procedures necessary to get the accounts paid. If physicians make special arrangements with patients, the staff will be frustrated and have little ability to enforce policy.

4. Implementing the policy.

Clarify collection follow-up procedures for third party payers and patients by answering these questions:

• When will follow-up begin?

• At what point is an account considered delinquent?

• What dispute actions will be taken?

• When is it appropriate to write-off a balance?

• When will an account be turned over to a collection agency?

• What is the responsibility of each person in the office and what happens when they don’t comply?

Once the written financial policy is adopted, an office meeting should be dedicated to discussing this and making sure everyone understands it, knows their specific role and feels empowered to enforce the policy – including the physicians. This may require some role-playing on how to ask the patient to pay. The billing department is often a good source for providing this training for the reception team.

Keep patients informed of the policy before you implement a change.

• Post it on the practice’s website;

• Prepare a 4×5 card to give patients when they arrive in the office;

• Announce the policy on the patient statements for several cycles; and

• Inform patients when they schedule.

5. Analyze payer performance.

Taking control of what you get paid is tied to payer performance, so analyze the insurance plans that represent the biggest share of the financial pie. Run a six month report of your top five or so payers based on utilization by CPT code. This will give you the most utilized codes and how much you were paid over the past six months. Now it’s a matter of dividing the dollars by the number of times the CPT code was used and you will get your average reimbursement.

Next, develop a grid that lists all the payers’ performance on those codes. Then it’s time to compare the payers not only to each other, but to what it cost you to see a patient. This number is relatively easy to look at. Take the costs to run your practice for last year, add in the profit you need to pay physicians’ salary and taxes. Then divide this number by the number of encounters performed for the same period. Bingo – you have your average costs to see a patient.

When analyzing the grid you’ll want to look at not only what each payer is paying, but also what percentage of patients it represents. If Low Ball Insurance represents 20% of your business, you’ll need to have a strategy before you think about pulling the plug. Will you:

• Attempt to negotiate for a higher rate;

• Continue seeing patients out of network – informing them of this in advance;

• Continue seeing existing patients but let the plan know you will be closing your panel to their enrollees; or

• Will you do one of the above, but start marketing to the better paying patients?

• And, how will you handle this plan’s referring physicians?

6. Get the payers on your side.

Now, for those better paying insurance plans. Look for ways to increase the patient census. Take a look at what employers in your area are represented by these plans. Develop marketing strategies to reach them and offer services to their employees. Write a letter to the existing patients and letting them know you welcome other family members or reminding them when they are do for follow-up care, screening tests or other preventive services that protect their future health. Also, remind referring physicians that you welcome their patients with Best Friend Insurance.

Insurance companies want medical practices to do their best when it comes to preventing illness and reducing the potential for complications with the plan’s patients. You play an integral role in helping accomplish this.

Look at what you (with the help of your practice management system) can do to prevent diseases and get patients better quicker. It’s one more reason physicians need to have an electronic health record system. It is the key to better disease management and controlling healthcare costs. It is also the key to getting paid more.

Part II of Getting Paid

Part II of this series will focus on reducing labor intensive processes; retaining top-notch staff and staying ahead of the curve with healthcare reform and other challenges that affect your future.

Judy Capko is the founder of Capko & Company and author of the popular book "Secrets of the Best-Run Practices," Greenbranch Publishing, September 2005. Judy has specialized in medical practice operations and marketing for more than 20 years, and is a certified risk management specialist.