As physicians and practice executives we face tough times in managing cash flow. The insurance carriers are continuing to demand more while reimbursing less. The adjudication process takes longer and requires expensive practice management software. The time it takes from service to time of insurance carrier payment also continues to increase. This time lapse between treatment and payment makes managing cash-flow more difficult.As changes have continued to sweep the medical care landscape, a few trends are undeniable.
1. Health insurance providers and other payers are decreasing reimbursement rates while increasing the time for payment to providers and ASCs.
2. Medical facilities and providers are seeing costs increase as technology, compliance and employee-related costs continue to rise.
3. As more and more clinicians enter the field, competition for each patient increases.
Research shows that without new revenue sources, ambulatory surgery centers (ASC) and providers may soon face a cash crunch unlike anything they have experienced before. Did you know that about half of practices demonstrating increasing annual net-revenue year-over-year are cash pay at Point-of-Service (POS) practices? These facilities are experiencing the benefit of being paid upfront, as opposed to delayed reimbursement.
Solutions to increase revenue and decrease time between service and payment are needed. The obvious option for facilities is to market for more self-pay and POS patients. Unfortunately, this is often not very effective based on geography / demographics of the practice. With our current economy, cash pay patients are rare and valuable. Competition for them is high.
Fortunately, there is another sub-group of patients who are not as heavily coveted but can yield the same cash flow benefits through the help of lien finance/servicing companies. This sub-group is made up of Third Party Litigation (TPL) patients; Personal Injury (PI) and Workman’s Compensation (WC).
Let's consider both Cash Pay and TPL (PI and WC) patient groups:
Increasing marketing to the general public can be expensive with an often limited response. Many facilities are using advertising through commercials, radio and newspapers as a mechanism to reach the volume necessary to recruit cash pay patients.
Subsequently, in-house collection efforts or hiring a collection agency to pursue payment becomes essential. Overtime, account receivables (AR) build up as does the delay in payment. This is not a bad option, simply one with an expensive entry fee (marketing) and some potential long term collection issues.
An option to consider is opening your doors to personal injury (PI) and or workers compensation (WC) patients. In this market segment, you can develop a steady flow of patients with relative ease. The reason you may not already be treating these patients is that many of them do not have health insurance or the health insurance carrier has denied subrogating the claim. In other words, the insurance does not want to pay for care when the patient's automobile insurance is going to pay for it later. In order to be paid promptly on these patients, consider working with a lien financing / servicing company.
Marketing for these TPL patients is relatively simple. Begin by letting the physicians you currently work with know that they can bring their PI and WC patients who are uninsured or underinsured to your facility. Many orthopedic surgeons and pain management physicians are already treating or being approached by attorneys to treat these injured patients. Also, you can notify your local personal injury attorney's offices or local litigation groups who legally represent potential patients of your willingness to accept their clients on a lien or letter of protection (LOP).
A lien or LOP is a legal agreement signed by the patient at the time of treatment promising to pay their medical bills from their case settlement. In most states the representing attorney must settle all medical liens prior to disbursing monies to their client/your patient. The charges associated with the lien or LOP are not a reduced "cash price" but instead are your full usual and customary charges.
The downside to this patient population is that cash flow will not increase in the short term. Since you agree to await payment from future settlements awarded to the patient/attorney, you can expect to provide care, and wait between six months to seven years to realize this revenue. Also, at the time of payment there may be reduction requests if the financial outcome of the legal case was not as expected. This can be a potential risk to your payment. Some medical offices retain a paralegal or develop an underwriting department to screen the case prior to seeing the patient.
Finally, communication with patients and attorneys may be an ongoing requirement; otherwise it is possible they may settle your case without paying your bill. There are methods to remedy this but will again require a collections staff. Moreover, these receivables do accumulate and age well beyond 120 days, you will need to allocate valuable resources to keep up to date and track your accounts. One alternative is to fund or finance the receivables and outsource the collections of your AR through working with a medical-legal funding company.
In summary, TPL is a geographically available and less expensive alternative to the cash pay market when evaluating alternatives in expanding your reimbursement portfolio. Accepting personal injury and workers compensation patients is a much more feasible way and requires minimal investment to greatly increase patient volume. You can reasonably expect that by opening communication with local attorneys, you will see consistent patient referrals. However, if you value cash-flow now as previously emphasized, you will need to seek an expert partner to monetize that patient volume into cash flow such as a lien purchasing/servicing company.
MedPort Billing specializes in the finance (payment) and servicing of personal injury and workman's compensation patient receivables. For over 10 years, we have financed both existing third party liability accounts from patient care that has been provided at facilities and practices across the U.S. We handle the underwriting and screening up front, as well as the paperwork and follow-up with attorneys after the procedure. We pay you for your patient care today, taking on your risk while giving you immediate cash flow. Our goal is for your ASC or practice to benefit from increased cash flow now, seamlessly allowing you to focus on the management of your practice. We are a solution to helping you provide quality care to the injured and uninsured that you otherwise might turn away due to lack of available payers.
Contact us now with any questions or to become a client. New Accounts/Questions- Jon West 888-958- 0350 ext 203 or email JWest@MedPortBilling.com. www.medportbilling.com.
MPB is not a medical provider and does not direct patients to medical providers. The medical provider may elect to submit related medical charges to MPB for consideration, but the medical provider is not required or obligated. MPB does not set the billed charges.