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Opinion: 3 ways to improve cash flow at medical practices

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If your medical practice is like most, your business model is built on credit. You provide patients services with the expectation they’ll pay you later.

Most patients count on their insurance company to help with payment. With the sometimes complex and confusing procedures required by insurance companies, denials, underpayments and lost or ignored claims can occur.

Any one of these delays in receiving your payment can create significant cash flow problems even for the most successful practices.

Electronic claim filing and remittance can do some of the leg work, but these three tips can help clear the blockages in your practice’s cash flow pipeline and increase operational efficiency.

  1. Invoice patients more quickly. Faced with rising costs, many health plans have increased deductibles, making patients responsible for a larger portion of their routine health care expenses. Unable to accurately predict these out-of-pocket costs, medical practices typically wait to bill patients until after receiving their insurance reimbursement. The process gets drawn out further when patients delay paying those invoices, unconvinced they are truly “final.”

There is a better way. By tapping into payers’ systems, medical practices can assess the status of a patient’s deductible and accurately predict out-of-pocket expenses at the time of their visit. With this knowledge, they can discuss electronic payment methods and even obtain authorization to charge a patient’s credit card once the insurance claim is settled.

  1. Streamline deposits. Many banks now offer solutions that enable medical practices to speed the time it takes to get payments into their bank accounts. In addition to improving cash flow, these technologies also enhance staff productivity and greatly reduce the threat of fraud.
  • Lockbox services allow a practice to have incoming payments collected at a secure post office box and transported to a bank for processing and deposit,eliminating the need for employees to handle incoming checks. Funds processed through a lockbox will be deposited more quickly and securely.
  • Remote deposit enables a practice to deposit checks into a bank account from their office by scanning a digital image of a check onto a computer and thentransmitting the image to the bank.
  • A merchant services program from a reputable bank should allow you to have next-day funding for your deposits.
  1. Simplify the database. Once funds are deposited into your account, medical staff must still take time to post them manually into their practice’s accounts receivable database. The claims and the explanation of benefits associated with these reimbursements, meanwhile, are tracked in their own separate databases.

It is now possible to combine all three functions in a common database using new solutions available through some financial institutions. New technologies enable banks to receive both payments and copies of patient claims from insurers, and from these they can create electronic EOBs, also known as 835s, customized to meet a practice’s needs.

An interface allows the information in this single electronic database to post simultaneously in accounts receivable, thus automating a typically manual and time-consuming process.

These, and other emerging solutions, do more than improve cash flow. They reduce the demands on administrators and improve accuracy as well. That means more time can be spent doing what medical practices do best: providing excellent patient care.

Dana Ausburn is vice president of Commerce Bank. She can be reached at


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