Do you find that your medical operations company never seems to have enough cash on hand to cover operational expenses such as payroll and overhead ? If you have to decide every month what expenses to pay first while anxiously awaiting expected receivables to hit your account, it’s time you address certain issues that might be impacting your cash flow.
Many companies in the medical operations industry that struggle to make ends meet often experience delayed payments from their two major medical revenue sources: insurance payments and patient out-of-pocket payments. Delays in either income stream can result in frustrating cash flow shortages.
The most common delay medical providers experience is waiting up to 60 days for insurance companies to make a payment on the claims they submit. Unfortunately, a challenge like this may be beyond your control, but there are things you can do to minimize further delays.
On top of the 60-day wait for reimbursement, billing errors can be a major cause of payment delay from insurance companies. Often, delays happen when there is a clerical error in the billing code, misunderstood provider note, or simply incorrect or missing patient information. Although claim denials can be resubmitted, it causes long delays in payment, thus decreasing your cash flow. By proactively implementing billing checklists and processes to verify claims before they are submitted, you will increase claim approval rates and allow you to receive faster payments in your medical operation.
Another barrier impacting timely revenue for medical operations companies are low-cost healthcare plans. These plans require low up-front costs with higher deductibles which seem appealing to low-income individuals at the time of purchase. These plans, however, require higher out of pocket expenses for patients, often delaying payments because patients simply cannot afford their costly medical bills.
The more patients know and understand their financial responsibility, the more likely they are to make timely payments. Be sure to equip your staff with the proper knowledge of the insurance billing process so that they can properly communicate that to your patients BEFORE treatment. This will minimize any confusion after treatment is given, which can reduce delays in collection. Giving your team the authority to offer payment plans for higher bills and incorporate automated payment systems will allow for timely cash-flow. Investing in internal resources dedicated to patient payment collection can be very successful in speeding up the collection process.
You might think that cutting back on equipment and supplies might help solve cash flow issues, but holding off on purchasing everyday supplies and overhead required can affect your team’s ability to do their job efficiently and successfully. This can lead to poor performance and bad morale. Focusing on the above processes will help reduce cash flow delays while maintaining high quality service.
If you have been experiencing these challenges in your medical operations business and have not been successful at implementing solutions to address your cash flow issues, we can help. Whether it’s putting the right processes in place, training your team to implement the processes you’ve created or simply getting access to credit to fill the cash gaps as you work through these challenges, we have a solution. Contact us today to get started.