As we’ve posted here before, almost all practices face the risk of a cash flow crunch in January and, really, through all of Q1, thanks to the deductible reset. (January’s revenue collections are sometimes also hit lower volume in December because of the holidays — a double whammy.)
In our experience, the decline in revenue can be anywhere from 10-20% for primary care practices (pediatrics and family medicine typically get a little ‘help’ maintaining Q1 volume from winter viruses) to more precipitous drops for surgical specialties (especially when there’s little downside to patients for delaying surgery).
The most important step practices can take to cope with the drop-off is to plan — now that it’s February, well, it’s a little late for planning for Q12015, but if you’re suffering from shrunken revenues that you didn’t expect, mark your calendar now to start planning for Q1 of 2016 at the end of this summer. With enough notice you can plan to set aside cash reserves so that you don’t need to tap lines of credit, cut expenses or delay needed purchases when the squeeze hits. You can also make sure you’re ready to take advantage of the upside of the deductible reset: patients will be anxious to schedule procedures in Q4, after they’ve met (or come close to meeting) their deductible. Alert staff that vacation time will be limited in the fall quarter — perhaps even offer staff extra time off in January. And, above all, start marketing procedures and mining your EHR for patients who may have wanted and needed a procedure, but put it off for financial reasons.
Even though we’re now in the thick of crunch time, there are still a few steps you can take to nudge the cash flow back up. If your practice’s bread and butter is high-fee procedures, look into financing options and review your financial policies. If you’re able to offer payment plans, that can take the sting out of patient responsibility payments. Technology solutions that can help you offer payment plans that comply with HIPAA and other security requirements are more readily available and easy to implement than ever before; as a starting point, ask your EHR and practice management system vendors for compatible suggestions.
It’s also not too late to try some of the most effective marketing available to a medical practice: mining your EHR and identifying patients for recall. For a primary care practice, reaching out to patients for annual preventive care is easy, appreciated by patients, and a great way to keep variety in the schedule and keep revenues up. All the vaccine news of late spotlights another reason for patients to come in for their annuals: make sure you let patients know you have all their needed vaccines on hand (including the newsworthy flu and MMR shots). OB/GYN practices can take advantage of the option to offer preventive care, too — many women rely on their OB/GYN for primary care, so making sure they’re coming in on time helps your patients stay healthy while also helping your practice stay busy.
With many patients on new health plans — either because their companies had open enrollment in the fall quarter, or because they’re buying on the exchanges, where open enrollment ends this month — one of the simplest things any practice can do to support cash flow is to be sure newly insured patients can find you. The error rate in health plan directories is surprisingly high; make sure you’re properly listed in all the directories of all the plans you’re participating in.
Perhaps most important: make sure you’re collecting every cent your practice is due from the volume you are able to generate during slow periods. That means looking closely at front desk collection procedures, at the scripts schedulers are using to alert patients to payments that will be collected at time of service, and at any repeat errors that may cause denials or resubmissions that delay insurance reimbursement.