Weekly business demand #4: Collecting

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Collecting our fees comes before we can pay our bills. Practices of all sizes require efficient and consistent methods for collecting the money owed the practice. With few exceptions, mental health collections come from two main sources, our clients and their insurance companies. We need to develop two collection processes, and while they may be parallel, they are distinct. 

Insurance collections

In general, insurance companies are easier to collect from than clients. Success with insurance companies boils down to these steps:

  • Sending in the required forms (via HCFA forms or electronic claims) within three to six months of the date of service
  • Follow up on any errors or delays

HCFA forms (paper forms) are an option but electronic claim submission is the way to go. Electronic submissions has many advantages. For example, you can submit your claim and know with 24 hours that it is accepted. Your software package will be your friend here. It will speed up the claims process considerably and reduce errors. And you can also have insurance companies send payments directly to your bank account. Doing these two actions can shorten the time frame for payment by weeks for each claim. 

Client collections

Collecting from clients is actually more challenging. Why? Clients sometimes resist payment. Emotion plays a role in paying fees for clients. Collecting is always difficult if the therapy in general is difficult. With clients, we may need to have uncomfortable conversations around money in order for them to be willing to pay the fees that are due. 

Standardize

We have standard processes for collecting from both sources. We also have backup processes to search out that happened when a payment from either source is delayed. Errors must be caught quickly so they can be corrected quickly. In general, the longer the delay in payment, the harder it is to collect.

This is not to say that one must hire staff to do the billing and collecting. But it does mean that the business will continue to make demands that, if not managed adequately, hurt the business and income suffers. 

Also look at the series on Daily/Weekly Demands:

#1: Scheduling

#2: Providing therapy

#3: Billing

#5: Planning marketing

 

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