Medical Billing and Collection have outlined 10 important factors that you must consider incorporating into your billing process when invoicing your patients, to avoid bad debts and ensure your receive your money on time.
1. Terms and conditions
As part of you billing process, it is important to make sure the patient/payer understands your terms and conditions and they are kept informed of any changes. Make sure therefore the patient knows clearly their obligations for payment of your fees, even if they are insured. Embassies should be comfortable with your fees and any changes due to complex work will need to be supported by a medical report. Also, set out clearly your terms and conditions for medico legal work which should be clear on payment terms.
2. International patients
If you are treating international patients, it is good policy to get payment before you treat the patient or at the very least on the day. Your practice should therefore have the facility to either take payment online, on the telephone, or at point of sale. MBC receive over half of their payments online from self-payers at the weekend, so to ensure good cash flow you should offer this facility.
3. Sending the invoices
You should aim to send an invoice out within 24 hours. If this isn’t possible, for whatever reason, make sure you monitor each invoice and aim to send it out as soon as possible. Only once the invoice is sent can it be paid. For self-payers, the sooner they receive the invoice the sooner they are likely to pay. For insurers, increasingly they are putting time limits in place after which they will not accept invoices.
4. Checking the invoice
Before invoices are sent you should try to ensure invoices are checked. This is particularly important because you do not want to give the payer any reason not to pay or have to resend the invoice. Insurers often want pre-authorisation codes and correct patient membership numbers. If you use electronic billing, correct information will only be accepted. With embassies in London, letters of guarantee (LOG’s) will have to be included and details must match with the invoice or they will be rejected.
5. Ensure receipt of invoice
If you send the invoice by post, it is a good idea to make contact with the patient/patient’s payer to ensure the invoice has been received. When sending an invoice electronically, it is easier to have a paper trail but when registering a patient, always try to obtain a mobile and email address to make follow-up communication easier and quicker.
6. Chasing invoices
Once you send an invoice, you need to keep a record of when it was sent. That way you can reconcile payments once they are received and also diarise to chase them. This should be done systematically although timing can vary based on the type of payer. For example, you could chase self-payers every 14 days and private medical insurers every 28 days. This could vary again for embassies, normally every 3 months and with medico legal the same if not longer.
7. Regular patients should pay regularly
If you are seeing a patient on an ongoing basis, it is a good idea to get paid your outstanding invoices before you treat them again. Each practice is different and will set its own policy on this, however, it is not a good idea to build up a lot of outstanding debt with any one patient/payer. This is the same in any business, and it is no different in private practice.
8. Chase invoices, not an invoice
It might seem straight forward, but when you are chasing a patient or client for an invoice, check to see what other invoices are outstanding and chase for those as well. If you are a practice manager or secretary managing a number of consultants, use the same principle. This is likely to be the case if you are doing medico legal work as a practice or your practice is in London doing embassy work.
It is important to review your pricing on a regular basis and ideally every 12 months. Otherwise you can lose out on revenue. Clinical Coding and Schedule Development (CCSD) codes, which form the basis of insurance company’s benefits, change monthly, so again your pricing should be monitored. You also need to review your embassy fees, which have been squeezed in recent months, as well as your charges for medico legal reports. The busier you are can be a good indicator of whether you could consider increasing your medico legal charges.
10. Bad debts
There will be occasions when invoices are not paid. This is a problem because tax is payable on the raising of the invoice, not payment. Sometimes invoices will not be paid for some time. This could be many months and at times years. If it gets to the stage you decide to declare an invoice a bad debt, and advice from an accountant should be sought to do this, showing you have actively chased the invoice is important as it will allow you to declare the invoice officially as a bad debt and as a result reclaim the tax paid.