For the previous article in this series, see 12 Things Chiropractors Have to Change in 2012 (Part 1)
5) Be on the A/R Alert. As predicted, the latest statistical surveys on the economics of medicine (including chiropractic) have indicated that small physician and hospital Accounts Receivable are growing and “aging” across the board. Translation: it’s taking longer to get your money and you have more money hanging out there in the void. According to most reports, the obvious cause is the economy; people have less disposable cash and unfortunately, we as health care providers are low on the totem pole of priorities for bills to be paid. The also obvious consequences that no one likes to mention are (a) impending cash flow crunches and/or (b) the potential inability to collect what’s due. Either result is bad. The lesson? Watch that A/R! It’s fairly easy for a practice with a decent volume to get in a zone only to suddenly look up and notice that their A/R has formed a small mountain whilst their nose was busily pushing the grindstone. What’s reasonable for A/R? It’s tough to give a rule of thumb that would apply to everyone, but the most basic benchmark would be that “healthy” A/R represents approximately 1.5x gross monthly collections and “unhealthy A/R” begins when you go over 2x gross collections. But these formulas can vary widely depending on your practice and payer type. Suffice it to say, no matter how the numbers balance out, most folks have a good inkling that their A/R has changed for the worse and/or when their A/R has become dangerous to the cash flow.
6) Take Tighter Reigns on Deadbeats. A natural consequence of focusing on the A/R as described above is the fact that you will begin to notice flakes, not of the dandruff variety, but financial flakes. You know the type: they hobble in but dart out the front door before you can collect their co-pay. They remember the fact that you were 2 minutes late for their appointment 6 years ago, but always seem to forget their wallet. They setup payment arrangements but never manage to inform their bank or checkbook of the same. When times are flush, sloppy offices tend to not notice these folks falling through the cracks until revenue is less vigorous than anticipated or until they get frustrated with the fact that they are essentially working for free. Either way, the solutions are the same: tighten up your financial policies, begin to outsource the deadbeats to collections “alternatives” (I generally don’t recommend traditional collections agencies) and/or quit being such a softie and giving away your hard-earned work. See my Chiropractic Collections and Financing Secrets program for more detailed strategies in this regard.
7) Beware the Rise of the Non-Insured, Insured. It does not matter where you practice or who your major insurance payers are – I consistently hear reports that $5000 and $10,000 deductibles are becoming more commonplace. For many DC’s this means that this patient, who believes they have insurance coverage, will essentially be considered a “cash” patient or someone without coverage. Proactive strategies to deal with these patients and communicate to them effectively are necessary because they are not the same as dealing with a patient who understands they have zero insurance. These people believe they have insurance and are sometimes shocked to find out how poor their coverage is. I have seen and heard umpteen offices botch this and force these patients to leave by making them feel unwanted or unworthy. Since this patient will become more common, you should have set strategies that are well-rehearsed for all your team members to handle these patients tactfully, respectfully and successfully. Surprises are bad for the patient and your staff, who isn’t quite sure how to handle this. The Collections Secrets program and the Chiropractic Office Protocol Book are good places to start, if you need strategies in this regard.
8.) Let Go Of Your Dead Wood. Face it, the reimbursement from many payers doesn’t appear to be getting spectacularly better anytime soon. Now is the time to seriously analyze which payers are at the bottom of your barrel and let them go. Why continue to struggle with payers who reimburse pitifully, require mountains of paperwork and make you, your staff and your patients jump through a series of endless hoops to continue or justify care? The beginning of the year is the best time to analyze this, once you receive your 1099s. For more info on the exact how to’s, see my article previously published in Dynamic Chiropractic entitled “How to Drop an Insurance Company.”
That’s it for Part 2 – check back in a few days for Part 3 and more things to keep tabs on in 2012!