Ways To Maximize Your Medical Practice Cash flow
Cash flow is the primary aspect of any medical practice. It checks if a practice can pay bills, buy new technology, pay staff, and stay open to help patients.
Unfortunately, many practices have financial difficulties because of reduced payments, changes in payer policies, patient debt, and work-related problems. This made it mandatory to have a regular cash flow system that allows the practice to run smoothly.
This blog post will delve into the ways you can opt to increase cash flow of your practice. Keep reading!
Defining Cash Flow in a Medical Practice
Cash flow is the flow of funds inside and outside a medical practice. It calculates the difference between money received from patients and insurance payments. It also calculates the money spent on staff wages, medical supplies, and building expenses.
Positive cash flow indicates that the practice earns more outstanding sums than it spends. Negative cash flow occurs when more money leaves the practice than comes in, putting the practice’s finances at risk.
Maintaining positive cash flow ensures a practice can cover its financial obligations and invest in its future.
The Value of Cash Flow in Medical Practices
The management of cash flow affects every aspect of a successful medical practice. Here are some of the critical reasons why cash flow management matters,
- Supports Daily Operations
Positive cash flow ensures a practice can keep the lights on and meet daily financial needs like payroll, rent, supplies, etc.
- Enables Growth
With positive cash flow, a practice can invest in new technologies, equipment, facilities, and staff to serve more patients. Negative cash flow limits opportunities for growth.
- Maintains Financial Stability
More money coming in than going out helps businesses deal with economic changes or reimbursement challenges, says LinkedIn.
- Avoids Costly Loans
Good cash flow reduces the need for loans or lines of credit that accrue interest costs. It provides financial flexibility.
Maximizing cash flow helps medical practices succeed and focus on providing excellent patient care.
Ways to Maximize Your Medical Practice Cash Flow
There are several proven strategies medical practices can employ to improve cash flow management. These include,
- Build a Strong Collections Process
The foundation of healthy cash flow is the efficient collection of patient payments and insurance reimbursements. Practices should implement a clearly defined collections process and train staff on best practices like,
- Collecting co-pays and past-due balances at the time of service
- Verifying insurance eligibility and patient coverage
- Obtaining pre-authorizations for procedures and tests
- Promptly sending claims with proper coding to payers
- Having a timeline for sending statements and following up on unpaid claims
Staff can maximize received payments by training and following a good collections process.
- Outsource Medical Billing
Many practices now outsource medical billing and RCM services to boost cash flow. The benefits include,
- Access to specialized expertise like EHR systems, billing, and coding
- Reducing overwhelmed in-house billing staff
- Letting staff focus on patient care instead of claims
- Leveraging advanced technologies to expedite reimbursements
Experienced RCM providers manage claims, leading to more money collected from submissions and payments.
- Track and Collect on Old Claims
Uncollected or claims denials 90 days old are much less likely to get paid. Practices must watch old unpaid bills and collect late payments to avoid losing money. Critical steps of denial management include,
- Calling patients
- Requesting payment from payers
- Resubmitting corrected claims.
- Put In Chronic Care Management
CCM services help practices make money and support patients outside of visits. The staff allows patients with chronic health conditions to organize care, ensure medication adherence, and address other needs. Practices can bill for services with CCM codes. A good CCM program improves patient outcomes and cash flow.
- Bill Patients Accurately and Promptly
Mistakes or delays in medical billing quickly accumulate as lost revenue. Practices should ensure they,
- Verify accurate patient insurance coverage before a patient visit.
- Bill for all services provided, including those a payer may not cover
- Send initial claims within 1 week and secondary claims promptly
- Follow up quickly on unpaid or denied claims
Accurate, timely billing and persistence in correcting claims issues maximize legitimate payments.
- Optimize Staffing for Billing Needs
Having skilled staff for billing, coding, and collections is crucial for cash flow. Understaffing leads to billing delays, errors, and reduced revenue. Practices should ensure staffing levels match patients and claim volume to see the most significant cash flow gains. You can manage it best by hiring a virtual medical assistant.
- Offer Patient Payment Plans
Practices should allow payment plans for patients with big unpaid bills, even if they prefer upfront payment. Practices can help people who owe money by offering more extended payment methods, interest-free loans, or discounts for those in need. The key is having a formal policy on payment plans patients can be aware of.
By following all these ways you can build a strong foundation of your medical practice with enhanced medical care.
Are You Set to Increase the Cash Flow in Your Practice?
Get in touch with us for custom medical billing services and boost your income!CONTACT US
The Final Words
Cash flow is the backbone of a thriving medical practice, and optimizing its management is crucial. Medical practices can boost cash flow by collecting payments, outsourcing medical billing, tracking claims, getting maximum reimbursements, and offering payment plans.
These efforts lead to a healthier financial picture and a more remarkable ability to deliver excellent care. Strategic medical practices can be profitable and serve communities well.