Small Facility Cash Flow Recommendations

According to a Medical Group Management Association (MGMA) report, on average, physician practices and groups surveyed reported a 55% decrease in revenue and a 60% decrease in patient volume since the onset of the COVID-19 pandemic. According to a report published by the American Hospital Association (AHA), hospitals nationwide will lose an estimated $54 billion in net income over the course of the year, even taking into account federal CARES Act funding. During this continued significant financial hit, cash flow is key for facility survival. Cash flow is generated from several key sources. Time of service copay collection, outstanding A/R collection and reduced A/P balances are all examples. The productivity and efficiency of financial performance starts with strong cash flow.

How can cash flow automation help your facility?

Today's consumers increasingly utilize online payment for purchases. Healthcare providers can easily increase cash flow by offering similar online functionality to patients. Doing so can reduce the number of staff required to post billing and payments manually. Decreased staff translates to cost savings and lowered outstanding A/R. In a more consumer-driven industry, physician practices need to embrace the "time is money" mentality.

How can smaller facilities catch up with the increased demand for A/R automation? Where should they start?

• Allow patient credit card payment at registration and/or checkout for copay collection and possibly after insurance balances.
  
  
• Provide patients and vendors patient portal functionality to pay bills/invoices online with credit card payment or link to an external bank account.
  
  
• Provide a discount program for self-pay patients, if their balance is paid in full on the date of service.
  
  
• Provide automated payment plans for outstanding patient balance collection. Allow similar functionality for vendors for carry over balances. This removes the need for the patient or vendor to initiate the transaction. It also reduces internal staff follow-up time for payment collection.
  
  
• Focus on rejected claims first since these are typically the easiest to collect – often caused by invalid coding or missing documentation. Reduce time spent on A/R follow-up and manual edits by integrating an automated coding tool and scrub claims with strategic oversight.

How does A/R automation impact patient care?

Some patients will not follow through and obtain advised care due to cost anxiety and embarrassment over their own level of financial need. By holding financial discussions for balance responsibility in a supportive and understanding environment, this fear can be removed. Patients are relieved when they feel the support and acknowledgement that practices will work with them on outstanding financial responsibilities. This collaborative spirit cements a deep provider-patient relationship. More than ever, due to today's high deductible health plans, patients and practices must work together to lower financial barriers that can restrict patient care.

Stay tuned for additional hospital revenue cycle management and business office transformation tips.