8 Keys for Dental Practice Cash-Flow Optimization

Transcription

1 8 Keys for Dental Practice Cash-Flow Optimization Introducing Today s Cash-Flow Trainer... RF Melanie Reed Larry Wally Riley Schmader 4 years experience as a cash-flow expert Trainer, Consultant & Speaker Based in St. Louis, Missouri 20+ years experience as a Dental cash-flow expert Based in St. Louis, Missouri If your dental practice is doing billing, follow-up, and collections the same way you did five years ago, you need to strongly consider making some changes. RF Tracy Spears, Healthcare Cash-Flow Expert 1

2 Here is Today s Agenda: In 90 minutes you will be informed, motivated & prepared Here are the 8 Keys for Practice Cash-Flow Optimization RF The Importance of Practice Cash-Flow Understanding What You Are Up Against Identifying the Four Debtor Types Committing to The Cash-Flow Basics Improving Internal Collection Practices Understanding Your Biggest Cash-Flow Threat Working with a Collection Agency 8 Considering New Cash-Flow Solutions Let s agree on a few things before we begin The Healthcare Creditor s Bill of Rights All dentists should expect to be paid on time Extending credit is a courtesy and should not bring financial or regulatory risk to a practice Practices should be able to focus on their specialty, free from the burden of collections Unpaid bills negatively impact everyone Late-paying patients should be held accountable to their obligations in a dignified and respectful manner The Importance of Cash-Flow A-R is the single biggest financial asset in most practices Your cash-flow is the best indicator of your overall efficiency Practice cash-flow can be influenced in many different ways #1 Sponsored by: 2

3 Understanding What You Are Up Against Businesses are Good at Getting Paid You Need a Progressive Approach Be Prepared to Compete Commercial businesses employ a variety of aggressive tactics to get paid. Their collection practices are not scrutinized the way that healthcare practices are. You are trying to collect from the same people they are. To make matters worse, debtors often de-prioritize healthcare obligations. Dental collections are getting more complicated every year. Many of the collections strategies used in the past simply do not work anymore. Practices are not using all of the resources available to manage their cash-flow. Good advice can be hard to find. Dental practices must be be very active in follow-up on slow-paying accounts. Early identification and intervention are crucial. Dental practices must leverage the newest tools, technologies and techniques to compete with commercial businesses for collectable dollars. #2 Increasing Patient Responsibility Free HDHP Starbucks card Increasing with consultation Patient patient responsibility represented 12% of total revenue. In 2012, the percent of patient responsibility rose to over 30% Responsibility Self Pay has become the number three payer behind Medicare and Medicaid High Deductible Historically Insurance Reimbursements represented 80-95% of the revenue. Health Plan HDHP (High Deductible Health Plans) and increased self-pay portions is placing Now over 30% huge importance on putting systems in place to collect Self Pay Balances Soon to near 40-50% of contracted rates Source - Article McKinsey Quarterly The Next Wave of Change for US Healthcare Payments What are the biggest challenges of running a dental practice? Dealing with rising operating costs Preparing for reimbursement models that place a greater share of the financial risk on the practice Implementation of ICD-10 Managing finances with the uncertainty of Medicare reimbursement rates Collecting from selfpay, high deductible, and/or Health Savings Account patients Maintaining a good patient experience to retain patients Managing multiple personality types within an organization Growing the Practice by attracting new patients 3

4 Learning to Identify the Four Payer Types I am the type of payer that pays on time every time. You send me one statement, and that payment is always immediately paid It s not a matter of whether or not I know I owe you money, it s that I need a real consequence before I m going to pay you. Disrespectful payers usually have received multiple contacts. It s not that I can t pay you; it s that I have to be reminded to pay you - before I m going to pay you. Unfortunately, a lot of businesses have to spend a lot of money following up and reminding these types of payers to pay I know the industry, I know how to w ork the system, I usually bounce around from doctor to doctor, to w hichever doctor is less proactive in their follow up on self pay responsibility. The reality is that there is still some money to be collected from these payers, it s just going to take a much more professional conversation before you re ever going to get paid. Every practice What Makes deals with Them all four Pay types. Learning Reliable to identify each Statement is crucial to a progressive A-R strategy. Distracted Reminders They all require different strategies, yet it Disrespectful it common to treat Third them Party all the Impact same. Deliberate Professional Collectors #3 Being Committed to the Cash-Flow Basics Have a defined credit policy for your dental practice Make all decisions based on your aging report, not your feelings. Invoice promptly & send statements regularly Know & follow the State & Federal collection laws #4 Make sure your staff is trained Admit & correct any mistakes on your part Improving Internal Collection Practices Do s & Dont s Do have a collection policy for your entire dental practice, not one for each physician. Do have a fixed credit policy that covers: -Broken appointment charges -Interest charged on late payers -Acceptable payment terms Don t put aging on bottom of statements like this Don t have amount enclosed box on your invoice or statement #5 How to Talk to Patients When asking for payments: You should not say: How much can you pay? When can you pay? Can you pay something? You should say: How much are you short? Will you be in today or tomorrow Will you be paying by cash, check or credit card? Empathize with patient s situation Remind them of their obligation Get a commitment for payment Collection Myths Using a collection agency makes the dentist a Bad Guy Active collections can scare patients away from a practice Practices will get fewer complaints if they are passive about collections It is allowable to add collection agency charges to patient balances The cost of collections is the percentage the agency charges 4

5 Often Collections Problems Can Be Avoided Is your patient financial policy clearly written including patient s responsibility if their insurance doesn t pay? Are payment terms spelled out? Are penalties specified for violating terms? Do you include what the patient should do if they need a payment plan? Do statements have due dates? Is your phone # on your statements? Do you show aging on your statements? Improving Internal Collection Practices Do s & Dont s DO have written Collection policies for your staff Easier when training new employees Demonstrates importance placed on collections Establishes performance benchmarks ($ collected, # calls made, % over 60) Review and update as needed Keep it clear and simple Defining a Collection Policy Define past-due Define acceptable payment arrangements How many written notices? How many phone calls? How is returned mail handled? Evidence shows it is best to vary the form of follow up at regular intervals of days. Recommended: Get accurate patient information 2 mailed bills + 1 phone call + 1 warning letter. But only if you can get all this done within 90 days. Colored paper helpful. Be careful when leaving voice messages Follow up Early Be the Squeaky Wheel Written request for payment including due date and acceptable payment types Remind and thank them for earlier commitment Attach copy of previous commitment Phone Calls When to start calling Goal: Payment in full with 1 call Track days/times of calls Set goals of # of calls Mental Attitude expect success Ask for payment TODAY Tips to Increase Recoveries Asking for the Money is a Three Step Process 1. Empathize: (shows compassion) Acknowledge what you just heard. "I know how you feel, that happens sometimes." (This will diffuse any possible anger and catch them off guard) 2. Remind the debtor of their obligation: (when the money was due), "Mrs. Smith we provided services for you on date. (This can possibly cause a little guilt on their behalf and have them realize you are right in asking for the money.) You Need a Progressive Approach 3. Ask them for the money: Mrs. Smith, your balance of $500. is due now, we accept credit cards and I can take that over the phone Pause and wait for the answer If they say they can not pay, say: How much are you short? Break the balance into a timeframe of 2 or 3 payments and if they can t meet those then ask: How much time do you think you need? Note: If they can t meet your payment guide, then you can not help them. I m sorry, I m not able to help you. Bridging Techniques One of the most effective techniques that collectors use to help retain control of a call is bridging. A bridging statement is a statement that acknowledges the human need and moves the consumer into the business need. 5

6 Bridging Techniques This statement can include an empathy statement and/or paraphrasing what the consumer told you. Verbal bridges allow the collector to: Steer a debtor back to relevant topics if he or she loses focus or seems off on an unimportant tangent Move away from controversial, uncomfortable or unflattering topics and back on to key messages End every answer to every question with a prepared, strategic message Bridging Techniques Examples of bridging statements: What s most important is that we get you into a payment plan that keeps you out of collections without jeopardizing the needs of your family. The real issue here is money; not so much an insurance issue, correct? Let me answer you by saying that it is frustrating to get calls from a collection company. Now I m willing to work with you on a payment plan that will work for both you and our office. Another thing to remember is that we re willing to work with you during this difficult time. Depreciation is the Biggest Threat to Your Practice s Cash-Flow #6 This is what all practices must understand. Time is not on your side. Early intervention is crucial. 6

7 Working With A Collection Agency 100% - Submitted to the agency What to Watch Out For with Collection Agencies What to Look for in a Collection Agency Skimming Unless your balances average well over $1,000, they are going to get skimmed by contingency (%) agencies and attorneys. Here are the numbers: Over-Charging Most of the money collected by agencies and attorneys is collected through the mail. Industry sources say it may be as much as 88% of all collected money. Make sure you are not paying a full contingency fee for letter collections. Good Money After Bad Be wary of attorneys and agencies that have add-on fees for skip-tracing, court costs, attorneys fees, credit checks, etc. Your collection fees should cover all of these expenses. Compliance It is hard to be a collection agency. There is a jungle of regulations and laws that dictate nearly every move an agency makes to collect your money. Hiring a non-compliant agency or attorney puts a practice at significant financial risk. Do your homework before hiring an agency. Tiered Pricing Some progressive agencies have a la carte pricing schedules. If an account can be collected with a reminder, or a simple written collection demand, they do not charge a full contingency percentage. Diplomatic Approach Find an agency that will give you options on their approach. If you know the agency has a softer option, you may feel more comfortable placing a sensitive account. Robust Reporting A competitive agency should be able to tell you your recovery rate, your net collections, your total assignments, etc. On-Line Interface If you are using a collection agency that 25% requires - Accounts you to fax paperwork actively or worked provide copies of account information, it is time to say goodbye. It is A Heathcare Speciality Your practice should use an agency with a proven approach for healthcare collections. They 5-10% should - Amount be able to provide collected reports and testimonials that demonstrate that expertise. 30% - Collection fee #7 The Collection Agency Test There are over 4,000 collection agencies in the U.S. Only a few can pass this test Do you have custom tailored services? Questions to ask your Collection Agency Is your company compliant with TCPA, HIPAA and familiar with state laws regarding compliancy? This is not a yes/no question, they should be able to provide additional information including how often their collectors are re-tested for compliance and how their performance is monitored for compliance. Does your company perform background checks on collectors in required states? How are cell-phone calls handled? If they don t maintain a separate policy for handling cell phone calls, that should be a red flag to you to find another vendor. 7

8 Questions to ask your Collection Agency Do you know what PHI is and what steps do you take to ensure its security during storage as well as communication with our office? Ask how they receive data from their clients (do they accept secure electronic encrypted data or do they expect you to fax or mail patient files which are more easily compromised?) Do they provide you with a secure website to view collections status and if not, do they at least have the ability to encrypt s when attaching a list of status updates which include PHI. Is your company licensed to collect in all states? Even if your patients are primarily local to your office, sometimes they move out of state and your agency will have to be compliant with the laws that govern the patient s new residence. Are you bonded and insured? Ask for copies of the documents proving bonding and insurance to make sure your money won t disappear if your agency goes out of business, either as a result of poor performance or as a result of a fatal class action suit. Choose an agency that is recommended by the top National Medical Associations Account Resolution Snapshot for a Progressive Practice Initial Client Statement 1st Party Reminders 3rd Party Collection Demands Professional Collections Uncollectable Accounts 8

9 Be Open to Progressive Cash-Flow Solutions Early-Out Strategies A Multi-Step A-R Process 1 st Party Services Fixed-Fee Collections Insurance Claim Prompting An Automated Collection Interface Full Array of Patient Payment Options #8 RF Let s Review Today s Content: We reviewed the crucial importance of cash-flow We described the challenges of driving cash-flow We learned to identify the four debtor types We recommitted ourselves to the cash-flow basics We discussed how depreciation hurts cash-flow We reviewed collections agency attributes We talked through internal collection best practices 8 We described some new cash-flow solutions Transworld Systems 9

10 We hope you have benefited from this cash-flow information. Feel free to pass this information along to other dental practices that could benefit from these progressive ideas THANK YOU! Kindly forward all comments to: