BILLING AND COLLECTIONAre you ready for what comes next?
Ensure your practice is in the best position to take advantage of the big release from lockdown. Simon Brignall has some useful advice to keep the cash flowing
THE IMPACT of Covid-19 is causing everyone in business to review how they operate from both a financial and staffing perspective – and private practice is no different.
Most consultants have either been seconded to the NHS fulltime to support the efforts on the front line or have adapted and changed their current practice to work remotely with patients.
The remaining specialists have had to close their private practice, as there is nowhere to practise and no patients to treat. But, unfortunately, the bills have not disappeared and this has left a whole host of financial problems for them to deal with.
I have received numerous calls from practice managers and consultants who are naturally worried about the impact of the crisis on the practice and how to deal with those issues in the weeks and months ahead.
The two main topics that keep surfacing for every practice are around staffing the practice and cash flow problems due to large amounts of outstanding debt.
Consultants have contacted me who are worried that their secretary is no longer available due to various reasons:
- Childcare issues ;
- Problems with the internet connection where they live;
- Being unable to adapt to the changes needed to work from home.
I have also had one doctor who, up until the pandemic, managed the medical billing themselves, but has now indicated that they want to prioritise seeing patients as soon as this is an option.
Practices have been in touch to say they have always had problems with aged debt, but now realise they can no longer afford to ignore this issue.
Many of these consultants are owed tens of thousands of pounds, and one practice had well over £100,000 outstanding. The amount of bad debt being experienced has risen as a percentage of income due to Covid-19.
I thought it would be beneficial to explore these issues in more detail and to suggest some strategies to put in place so that your practice is in the best position to benefit as things recover.
There are important lessons to be learned that are applicable not only to the current situation but also for whatever lies ahead when things get back to ‘new normal’.
One thing that is clear from the calls I have received is how much consultants rely on their secretary.
This is not surprising when you think how many tasks they are responsible for in a modern practice, especially when you consider that they must ensure the patient comes first.
Secretaries manage a wide variety of tasks on a daily basis and, in my experience, consultants often underestimate the sheer volume of activity the secretary has to deal with.
They need to provide a swift response to all patients either by phone or email and in the modern world that often involves followup calls and emails.
A secretary’s duties also include diary management, liaising with the hospital to book tests and theatres on top of typing up letters and notes.
This all needs to be actioned before they get an opportunity to tackle the all-important invoicing, reconciliation and chasing processes. When you consider their workload, it is not surprising that these areas often get neglected and experience problems.
A private practice, like any business, is reliant on its cash flow and this is especially the case in times of crisis.
Difficulties around cash flow can cause even successful practices problems with paying staff and suppliers, let alone generating necessary income for the consultant.
In extreme circumstances, this can translate into tax issues with HM Revenue and Customs. It is important to understand the key areas that can impact a practice’s cash flow.
Delays in invoicing
It is vital that your work is invoiced in a timely manner, as this will ensure you have reliable cash flow and will assist with your debt reduction.
This will mean that any billing issues are picked up more quickly and increases the likelihood they can be resolved swiftly.
It is important to note that as the raising of an invoice is the first link in the billing chain, problems at this early stage can negatively affect all the other steps in the process.
Remember, some private medical insurers have rules around time limits on sending them your invoices. Should these deadlines be missed, then they will deny payment, leading to lost income for the practice.
At MBC, we always invoice the main insurers electronically when possible. This means that, should there be any issues with the postal service, this vital area will not be impacted. We also benefit, as we have a dispatch record that can be referred to resolve any dispute.
Reconciliation and chasing of payments
You need to ensure you have accurate information on what money is owed to the practice.
“One thing that is clear from the calls I have received is how much consultants rely on their secretary”
Only then can you identify problems and take suitable action to address this.
That can only be achieved if payments are allocated to the appropriate invoice as they are made. This will allow any outstanding balances to be identified and, where a patient is liable, an invoice to be raised accordingly.
Remember, these shortfalls and excesses occur when an insurer fails to settle the invoice in full. As this is the area that most practices struggle with at the best of times, we can expect this will lead to increases in aged debt for many consultants.
Once you have identified what it is outstanding, it is important to have a systematic chasing process. This will allow you to not only identify problem payers, but where there is a discrepancy with an invoice, you can swiftly seek to rectify the issue.
It is important that you make the payment process as simple as possible so as not delay the invoice from being settled.
At MBC, patients can make card payments 24 hours a day via our online payment portal that allows patients to pay at a time that is more convenient to them, which improves the collection rate.
As many of you will be experiencing a decline in the revenue side of the business, it is important to ensure that there is a focus on what the practice is owed, as this will help alleviate any financial pressures.
The current crisis has highlighted many practices who have found this to be challenging. A good idea would be to review your practice by asking yourself the questions in the box above.
If you have concerns about the answers to these questions, you should take steps to resolve this.
- Is the billing for the practice up to date?
- Have all payments been reconciled?
- How much is currently owed to the practice through outstanding invoices and when were they last chased?
- Does my secretary have enough time to do everything that is required?
- Would my secretary deliver a better service to my patients if they had more time?
- Would my practice benefit from better cash flow?
In talking to consultants, it would appear many are confident that there is a large pent-up demand for their services and the main reasons they are calling is that they want to ensure their practice is best positioned to capitalise on this and recoup some of the lost revenue experienced over the past months.
It became clear in my many discussions that the best way to do this for many practices was to have the secretary focus primarily on the patients and the clinical side of the practice, while outsourcing the financial billing and collection to experts
Simon Brignall is the director of business development at Medical Billing and Collection, who have provided medical billing services to the independent healthcare sector since 1992
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