A glazed over blank stare or a stammering of excuses is what we get from physicians when asked about their projections for this month’s cash flow. Imagine how an employee would feel if they did not know how their next paycheck was going to be for. How would they be able to plan their budget for expenses? They wouldn’t know if they were going to be able to provide for their family, or if their mortgage was going to be paid. Then why is that so many physicians and practice owners fail to estimate how much inflow they are expecting in coming month.
It has sort of become standard practice within industry that the people in charge of tracking money coming simply just roll the dice and leave it to their luck to get paid from insurance companies. They feel that there is nothing that they can do and give up. They become complacent and trust that they will be paid. There is another way that is much better way that will help practice owners.
Inflow projection is quite simple. The number of working days in the month and your current daily inflow is the basis for the projection. Below are some areas that need to address on priority to make sure that you get your money at the earliest.
Make sure bill claims out every day. It feels like a hassle but it’s really only minutes of work per day. It will be easier for you to stay on-point with your budget when you have constant flow of income in your bank account. You should not only try to send claims out on a daily basis but also go ahead the extra mile and bill claims out the same day the patient was soon. It’s definitely lucrative.
If your staff has the habit of completing their notes over the weekend instead of the day the patient visited then this needs to be changed immediately. Similar to DSO it is critical that staff complete all of their notes that will be charged out the same day the patient was seen. It will make it much more accurate to predict your monthly inflow and will decrease the number of days out that you will be paid.
Keep your A/R in check by posting monies coming in the same day they are received. This will also enable you to understand better the paying habits of your payers. This is important because Medicare has 14 days from the time they receive the claim to pay it. If you have any Medicare A/R over thirty days, that’s a problem for you, look into why that’s happening. Blue Cross, Aetna, and sometimes Blue Shield pay within a week. Healthnet and Cigna will pay within about ten days. All of this is important so that you can customise your follow-up process based upon payer and know if they are paying on time.
You will need to compute your average inflow per day and multiple that by the number of working days in the month. Based upon how much money is posted on a daily basis, this number will change and this is why it’s so vital to send out claims every day and post on a daily basis. But once you have a better idea of what you’ll be bringing in for the month, you’ll be able to better plan your expenses.