COLUMNIST BUSINESS TALK Delicate art of patient billing I Guide to spending, collecting and saving money (part 3) BY ANTHONY LOMBARDI n 2005, I was seeing 150 patients per week but my ac-counts receivable ballooned to over $60,000. I had no protocol for collecting payment from my patients. Some patients were billed directly through their extended insurance, others were auto injury insurance patients, and others had arrangements to pay every month or at the end of the entire treatment trial. Referrals continued to pour in and I began seeing over 160 patients per week. But when I crunched the numbers, I realized I was only getting paid for 100 of the 160 visits. Back then I had no business experience. My main focus was to provide a quality product and outstanding clinical results. I felt if I did that, everything else would take care of itself. In reality, I was getting paid for only 63 per cent of the patients I saw. I decided it was time to get organized. As a temporary measure, I no longer provided direct billing. Then I reviewed how often billing was being done for auto insurance and workers’ compensation patients. Lastly, I elim-inated special payment options, which some patients were used to. After one month of implementing these changes, I was seeing 105 patients per week and being paid for 100 per cent of the visits. Naturally, this was just part of my solution. I needed a system that would allow me to return to direct billing to reap the rewards of seeing 160 patients per week. As I was pondering how to fix my problem, I made a trip to the supermarket. While at the checkout counter I realized grocery stores insisted everyone pay upfront and in full before using their products. With this in mind, I developed a system to forever eliminate accounts receivable. the treatment experience, I use this time to cash out patients at the front desk. This way, I could “bury” that memory somewhere between the primacy and recency of their visit. This way the last thing they remember from their visit is how good they feel as they leave my office. Here today, billed tomorrow I designated and trained my staff to bill extended/auto in-surance companies, and I insisted that billing be done the day of or day after the patient’s visit. This approach allows for better tracking of outstanding balances. My staff moni-tors this on a weekly basis and discusses this with me during our mandatory, weekly, 10-minute meetings, where we discuss billing, outstanding balances and what we are doing to secure our money as soon as possible. In addition, I assess a billing surcharge of $1 to $2 per visit – on top of the treatment price – for direct billing to cover the extraneous costs of labour, stationary, electricity, postage and interest charges which are incurred at my expense. Remember, you are running a business, so your policies must be consistent with running a viable organization, not a charity. Bridging the lapse Paid on arrival The first thing I did was not only to make sure every chiro-practic, physiotherapy and massage patient paid the same day of the treatment – I made sure they paid before every treatment. This was done not only to ensure I received pay-ment, but also to enhance the patient experience. The primacy and recency effect is a psychological phe-nomenon used to explain how our brains process informa-tion. The human brain is more likely to remember the first bit of information (primacy) and the last bit of information (recency) during an isolated experience. I found that most patients arrived an average of ten minutes early for their appointment. Since paying is the most undesirable part of ANTHONY LOMBARDI, DC, is consultant to athletes in the NFL, CFL and NHL, and founder of the Hamilton Back Clinic in Hamilton, Ont. He teaches his fundamental EXSTORE Assessment System and conducts practice-building workshops to health professionals. Visit www.exstore.ca for information. 16 Canadian Chiropractor June 2014 When we direct bill insurance companies there is tradition-ally a significant lapse in getting paid from the time the treatment is first administered. The problem here is that if your clinic is direct billing $10,000 per month and it takes three to four weeks for the funds to reach you, then you are always $10,000 behind in terms of cash flow. I can suggest two solutions to this problem. Telus Health Portal is a free tool which allows chiroprac-tic clinics to download a billing program that works with 31 extended insurance companies and hundreds of health plans. This allows me to bill the patients’ insurance electron-ically, which allows the funds to be deposited into my ac-count within 24 to 48 hours. This eliminates the long wait times standing next to the mailbox waiting for the cheque to arrive. Most importantly, it restores the lifeblood of your business – cash flow. A second option is securing a business line of credit from a bank. In this solution you borrow $10,000 from a line of credit so that you are never “behind” and cash flow is always intact. The interest charges are paid for with part of the proceeds generated from the billing surcharges. Be a pal and square up As time evolves, so does technology – and so should your practice. www.canadianchiropractor.ca
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