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BLOG: Tightening revenue cycle management, part 2
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Last time, in the first of three installments, I discussed how some doctors and managers rarely dig deeper than the subjective generalities of their billing department’s performance. The conversation is like talking to your teen and doesn’t move past: “How’s it going?” “Fine.”
Now imagine a very different doctor-manager conversation:
Dr. Witherholt: So, how are we doing on collections, Susan?
Susan: Just great, doctor! It’s all in my report to the board, but I can tell you that in the last 6 months our accounts receivable ratio (the month-ending total A/R divided by average monthly charges) has fallen from 2.2 to 1.3. Our over-90-day receivables have dropped below 12% of our total A/R, which was the maximum threshold we set as a department policy. You’ll recall that we had a resubmission rate of 18%; that has now dropped to about 5% in a typical month because the front desk crew is better at entering the patient demographics right the first time. Although we haven’t changed our charge levels or service mix, our gross collection ratio has climbed in the last year from 56% to 67%. Now that we’ve worked through the old receivables backlog, the labor costs in my department are coming down, too. We’re now collecting an annualized $1.1 million per full-time-equivalent staff member on our team — that’s up 25% from when I took over the department.
Wow! Some difference, huh? Which of these two very different conversations go on in your practice today? From these two extremely contrasting examples, you can begin to see how important the numbers are.
And what really helps is to put these numeric trends in their historic context with simple graphs. I’ll show you a couple in the third and last installment of this series.
John B. Pinto is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm established in 1979. John is the country’s most-published author on ophthalmology management topics. He is the author of John Pinto’s Little Green Book of Ophthalmology, Turnaround: 21 Weeks to Ophthalmic Practice Survival and Permanent Improvement, Cashflow: The Practical Art of Earning More From Your Ophthalmology Practice, The Efficient Ophthalmologist, The Women of Ophthalmology, Legal Issues in Ophthalmology, Ophthalmic Leadership: A Practical Guide for Physicians, Administrators and Teams and a new book, Simple: The Inner Game of Ophthalmic Practice Success. He can be reached at pintoinc@aol.com; website: www.pintoinc.com.