The front desk representative handed me a stack of forms to fill-out as soon as I announced I had an appointment with the specialist. It was the beginning of the year. Everything had to be updated. We all know the drill.
While the front desk clerk was making copies of my insurance card (why do we still make copies?), I reached into my pocket to pull out the money to pay for the copay. When she got back to her chair I extended my hand with the money. She said, “We’ll bill you. Don’t worry about it. We just changed computer systems and everything is crazy.”
The PM in me wanted to ask for the administrator of the practice and tell that person, in a polite manner, ARE YOU CRAZY? Have you considered the financial impact of co-payment collections in your practice?
The manager wasn’t around, but since you’ve read this far, let me tell you the financial impact of not collecting a copayment.
Let it slide
Say the front office lets one co-payment “slide” each morning and afternoon, how much money are we talking about? Let’s do simple math:
2 x $25 x 5 days per week x 52 weeks = $13,000!
$13,000 over the course of a year if we assume each co-payment is $25 each.
If each copayment is $35, the number jumps to $18,200
But that is not the end of it. By not collecting at the time of service, the practice then incurs a cost to collect the money owed. That is not the end of it either. Chances the practice will collect 100% of those missed copayments is unlikely. Certainly not impossible, but unlikely.
A practice that isn’t very good at collecting copayments up-front is probably not very good at collecting for patient balances after the fact. Is that a safe assumption? I think so.
We’re talking about the practice’s margin
There was a time when copayments and patient balances did not command a large percentage of a practice’s revenue. But things have changed. Now, copayments and balances account of upwards of 30% of a practice’s revenue.
Analysts say the percentage is increasing as insurance companies continue to shift the risk to their customers (did I hear somebody say high deductible plans?). And by customers they really mean health providers because we are the ones stuck with the responsibility to collect for patient balances.
First things first
My advice to the administrator of that specialist practice? Join SOAPM and thank me later.
My second piece of advice: train, empower and support your front office staff to take the necessary steps to collect co-payments (and patient balances) while the patients is in the office.
It is your best chance (sometimes your only chance) to get paid for your doctors’ work.