8 Strategies to Boost Your Medical Practice's Cash Flow
A steady cash flow keeps organizations in business for years. In healthcare, numerous factors might affect providers' revenue, including denials and insurance verification. Moreover, if you are not keeping up with the standards, you might face legal action or suffer financial losses.
Improving cash flow for medical practices is no secret - there are multiple ways you can increase revenue. In this article, we'll discover the ways you can improve your medical practice’s cash flow and provide quality care.
Eight strategies to boost medical practice cash flow
Efficient cash flow is crucial for medical practices, ensuring seamless operations, timely patient care, and sustained financial health. Here are ways to maximize healthcare practice cash flow.
Timely submission of claims
Timely claim submission is essential for a steady cash flow. However, healthcare organizations often struggle with timely claims submission for various reasons, such as inefficient billing systems, staff shortages, or complex regulations. Moreover, inaccurate documentation and changes in payer requirements add up to the delay.
Physicians should leverage automation or outsource their RCM activities to overcome this issue. Accurate and timely submitted claims can result in lower revenue loss, expedited payments, and enhanced provider-payer relationships.
Well-managed accounts receivable
A straightforward collections process ensures medical practices meet their revenue targets.
A well-managed accounts receivable process ensures the business has enough liquidity to meet short-term obligations. Any delay in collecting receivables can strain the company's cash reserves.
According to AAFP, days in A/R should be below 50, and healthcare providers should aim for at least 30-40 days. Medical practices must manage A/R to ensure bad debt reduction, cash flow consistency, and operational efficiency. To maximize collections, organizations must define a payment collection mechanism for patients.
Automatic eligibility verification
Patient eligibility and benefits verification is one of the earlier stages in the healthcare revenue cycle. Unfortunately, it is also one of the primary places where most inefficiencies and inaccuracies occur, leading to claims denials.
Healthcare providers must have robust practice management software in place that allows seamless integration with billing software. This integration allows automatic eligibility verification and also ensures patients are covered for the care provided.
Automatic verification ensures that all necessary details are captured accurately, reducing the risk of claims denials. Moreover, the system can validate insurance details, policy limits, and authorization requirements.
If patients are found not eligible for the care provided, healthcare practices should inform them about the same. However, alternatives to the payment or treatment options can also be provided, maintaining billing transparency.
Optimized denial management
Claim denial is the most significant cause of revenue leakage and reduced cash flow. According to MGMA, about 20% of all claims get denied. Healthcare providers must promptly identify the trends and ensure claims get through on the first attempt.
Incorporating effective denial management strategies, such as accurate documentation and physician engagement, proactive claims scrubbing, regular staff training, and integrating advanced technologies, can streamline the revenue cycle, minimize denials, and optimize practices' overall financial health.
Collect patient payments promptly
Every medical practice needs an effective payment collection system in place to ensure a healthy revenue cycle. Healthcare practices can increase their collections with a thorough approach to the collection process by evaluating and adjusting existing systems, clear communication, using technology, and effective staff training.
Collecting patient payments at the time of service reduces the need to follow up on payments later, thereby streamlining cash flow.
Moreover, billing patients in advance can enhance transparency and reduce payment delays.
Offer multiple payment plans or choices
Whether you are an established firm or a small startup, knowing the impact of payment flexibility can be a pivotal phase in your business journey.
Medical practices should offer multiple payment options to their patients to optimize cash flow. Moreover, using technology to send reminders and follow-ups can significantly enhance payment collection.
Keep track of old claims
After multiple denials or delays in claims processing, healthcare providers might overlook the pending payments. This makes it crucial to keep track of old claims and follow up regularly to collect dues promptly.
Outsource RCM services
Outsourcing RCM to a reputed vendor can significantly increase cash flow. Typically, outsourcing your RCM services is a more cost-effective approach than maintaining an in-house team. Outsourcing reduced the overhead costs of recruiting, training, and maintaining an RCM staff.
Moreover, outsourcing providers render a team of experts to manage your extensive billing responsibilities, freeing up your time to focus on providing quality care.
Conclusion
Steady cash flow is the lifeblood of any organization. By implementing the above strategies, you can optimize your revenue streams. If you want to learn more about improving your cash flow, read our detailed blog “8 Ways to Improve Medical Practice Cash Flow”.
PCH Health is a trusted RCM provider that has been serving medical practices for over 30 years, streamlining cash flow and ensuring compliance. Talk to our RCM experts today to learn more about the above tailored RCM services.