R8m in patient co-payments still not collected 7 days after consultation
Low claim-volume medical practices had R8 million of patient co-payment amounts still not collected 7 days after the consultation, compared to “only” R900 000 for high claim-volume practices. That’s a difference of nearly nine times as much. This emerged from a review of GP data* that looked at the claim sending behaviour of low-claim-volume practices (practices that send between 50 and 100 electronic claims per month) and high-claim-volume practices (practices that send over 200 electronic claims per month).
Theproblem with not sending the claim promptly is that practices won’t even know how much their patients owe, so they can’t even begin to estimate the potential risk of bad debt. For low-volume practices, we have calculated the risk to be R8 million which translates into an annual average risk of R66 000 per practice.
The longer you wait to invoice a patient, the longer they take to pay. The longer a patient takes to pay, the higher the risk of bad debt.
This is supported by a study carried out by David Evans (21 June 2013; Free Agent) who found that invoices sent within a week of the work being finished were paid on average within five days. However, when the invoice was sent just one week later, payment time doubled to about ten days. Closer to home, we also conducted a pilot study of our own. This study showed that the sooner a practice invoiced the patient, the more likely they were to get paid.
It’s not all doom and gloom – a practice CAN reduce their risk of bad debt
By checking a patient’s benefits before the consultation, or by sending a claim immediately afterward, you will be able to inform patients of any payments before they leave your practice.
What does this mean for your practice?
Collect sooner, and you’ll lower your risk of bad debt. The money you save can be better spent in the practice on staff, salaries or improved admin technology. Or it can just go towards improved cashflow.
Here are some tips for low-claim-volume practices looking to improve their billing cycle:
Evaluate your practice’s routines to see where processes could be adapted or improved. It’s easy to get caught up with other processes, and forget to allocate time to sending claims while the patient is still at the practice.
2. Physical practice set-up:
Your existing set-up might not lend itself to sending claims while the patient is still at the practice, and might be worth reviewing.
3. Staff capacity:
Review your staffing levels, as there may be too few admin staff on hand to do all the necessary work. In fact, there is often only one staff member on duty to receive patients, check benefits, send claims and do the reconciling.
A final remark
Clearly, there are numerous opportunities to optimise your workflow processes and ensure that claims are processed while the patient is still at the practice. Make use of these opportunities, and you’ll find that co-payments due by patients can be settled much sooner – preferably before the patient leaves, but absolutely within 7 days of the consultation.
*Data reviewed 121 low-volume practices and 805 high-volume practices.