An hfm Web Extra

Most hospital organizations have sophisticated revenue cycle operating policies. Although many hospital managers are inclined to simply apply these policies to the practice setting, those related to self-pay collections, small-balance write-offs, and credit balances should be reexamined.

Patient payments now represent a much larger portion of a practice's revenue than they have in the past. As a result, it has become much more important to collect patient balances. Practices should have aggressive front desk co-pay collection policies, and should evaluate front desk staff on their ability to collect at the time of service. With costs to collect in mind, practice managers should review statement messaging, the number of statements sent, the parameters under which they are sent, and the point at which accounts are referred to a collection agency.

A small balance write-off is a decrease in reimbursement for the associated units of work. As a result, practice managers should think carefully about its small balance write-off parameters, and consider whether they should be set at the encounter/visit level or the account level.

Credit balances generally are not a priority in the practice setting. They are time-consuming to work and are not perceived to have financial value. However, they represent a potential compliance risk if not worked in a timely manner. They also represent opportunities to properly appropriate cash and accurately evaluate a practice's true reimbursement per unit of work.

For more information, see Shelly Boggs, "Physician Practice and Hospital Revenue Cycle Drivers: What's the Difference?," hfm, September 2010.


Publication Date: Wednesday, September 01, 2010

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