The longer you wait to invoice a patient, the longer it will take for the patient to pay. This statement is supported by a study carried out by David Evans (21 June 2013; Free Agent). He found that invoices sent within a week of the work being completed were paid – on average – within five days. Waiting two weeks to send out an invoice however, doubled the payment time to about ten days.
No big deal? Not exactly. Waiting to collect from patients increases your risk of cash flow problems, bad debt, & the cost of collecting outstanding invoices.
We analysed our data to understand how quickly practices were collecting from patients by speciality & assessed the Rand value risk*. How are you performing against your peers? Find your speciality below to see how you are performing against the average.
As you can see, for the average GP practice, almost half of patient liable amounts are not being collected at time of service. If you’re not submitting claims in real-time and asking for payment before the patient leaves your practice, an average of R30K or 20% of the revenue earned in that period that is still not collected between the 91 -120-day mark.
For the average Specialist practice, almost 50% of liable amounts are not being collected at time of service either. At 91 – 120 days, an average of R42K is still not collected. This may not seem like a significant amount, but it adds up over time and it’s then that it can make a difference. How does your practice fare against the average? Are you waiting 10 days to submit invoices and claims?
In the case of the average Allied practice, over 50% of liable amounts are not being collected at time of service. Allied practices also have the longest wait between consultation and invoicing. As a result, an average of R17K is still not collected between the 91 -120-day mark. Are you at risk of accumulating bad debt?
What does this mean for your practice?
If you are taking longer than the average practice to collect, you are putting your practice in unnecessary financial risk. It means carefully looking at your billing cycle & implementing changes where there are bottlenecks. One of the basic guiding principles to improve your practice’s averages, is to make it easy for patients & medical aids to pay you. We’ve broken down the steps to ensuring that your average debtors’ days are kept to a minimum.
Top 5 tips to improve your medical practice’s billing cycle:
1. Verify patients at the time of making an appointment
Waiting until a patient is in the practice to verify their medical aid information is often too late. Patients are more likely to dodge making payment if they didn’t expect to have to make a payment.
Ensure that your admin staff have complete, accurate patient & medical aid information when the patient makes the appointment. You can do this by performing a Family Check using your practice management software. Family Checks validate medical aid membership for all dependents in real-time so you have the most current & correct information if you need to discuss payment or co-payment with the patient.
2. Communicate shortfalls with the patient
We touched on it above, but it’s important to bear in mind that anyone would be unpleasantly surprised to discover that they are liable for an invoice they weren’t prepared for. Help them avoid any unexpected expenses by notifying them of any potential shortfalls in their cover.
Get an estimate of patient liabilities by performing a Benefit Check to know what funds are available. Sophisticated practice management systems run automated benefit checks when the appointment is scheduled, & again a couple of hours prior to the appointment. Patients who are informed prior to their appointment about shortfalls are more likely to pay then & there.
3. Collect payment before patients leave your rooms
Patients who are billed immediately are more likely to pay before leaving – we can’t stress this enough. So why wait for the patient to leave the practice to email them and invoice retrospectively?
For insured patients, use your practice management system to send claims to medical aids in real-time. You will know within seconds what to bill the patient & can generate an invoice immediately to collect what’s owed.
4. Consider payment plans
There are times when patients will genuinely struggle to pay their bills. You don’t want to make life harder for them, but you want to be paid for your services. Strike a balance between the two by offering payment options. Click here for more about the kind of payment options you can offer.
There are also patients who simply forget about outstanding invoices – particularly if it’s not part of their typical monthly budget. Sometimes all it takes to collect from a patient is a reminder. Send SMS payment reminders quickly & easily from your practice management system as often as necessary.
5. Offer cashless billing & payment technologies
Going back to one of the guiding principles we mentioned earlier, make it easy for patients to pay their bills. You should, at minimum, be offering traditional card & EFT payment options as well as cardless digital payment channels.
Opt for practice management software that has negotiated favourable rates with digital payment companies such as SnapScan to offer your patients more of their preferred payment method.
For an in-depth look into how you can improve your patient collection process, click here.
A final remark
There are the five tangible ways you can both streamline processes and ensure that you collect for your services. By implementing some or all of these, your practice is likely to perform well above the average when it comes to debtor days & outstanding payments. Benchmark your practice’s average days to collect & then set the target of getting paid within 7 days of the consultation for a marked improvement on cash flow and revenue.
For more about how Healthbridge can help you run your best practice, click here.
*Based on sample data. These figures may vary by location & practice setup type.
* Healthbridge analysed the time it took for an average practice by speciality to collect from patients between August 2021 & August 2022.
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