How Should Your Office Manager Be Leading the Collections Effort?
Updated: Oct 25, 2019
Last week we discussed the second most important job that an office/practice manager should be doing, 'leading the marketing effort'. In our poll we asked 'how much time does your office manager spend marketing?'. Fifty percent were unsure why an office manager would spend any time marketing for the practice, 25% said their office manager spends over 10 hours a week marketing, and 25% said that their office manager spends about 1-2 hours a week marketing. These varied results illustrate that the office manager job is not as defined as it should be. Your office manager knows your practice better than anyone and we are not saying they should be "doing 100% of the marketing effort" but they must be leading it.
This week we are going to talk about another job for the office manager which is 'leading the collections effort.'
The collections process begins when the appointment is made. Patients should be aware that their portion of the bill is due at time of service, so your office needs to have an estimate of what they will need to pay when they arrive. Here is a list of the necessary tasks to establish a proper approach to collecting balances.
Educate new patients on the financial policy when an appointment is made.
Ensure that entire patient balance is collected at time of service.
Maintain and regularly update the office financial policy.
Be sure that staff can effectively communicate and follow the financial policy
The office manager should plan to collect patient balances at the time of service as well as implement a sound financial policy so that accounts receivable is minimized to 30 days outstanding or less. Their front office team should be trained and capable of asking for payment for the treatment completed each day to keep the patient AR is as low as possible. To calculate your 'Adjusted Production', you can use this formula and the goal should be to collect 98%-99% of adjusted production.
Billed Charges - Discounts - Adjustments
+ Refunds = Adjusted Production
Your assignment for this week, is to pass this blog post along to your office manager and have a discussion about their collections efforts.
Until next week, we would appreciate your signing up for our blog and forwarding this post or other relevant posts to your fellow practice owners and office managers. If you have a question that you would like answers in a blog post, please email it to firstname.lastname@example.org.
Doctors CFO is now launching a FREE tool to help you track your MACRO KPIs. The basic model is free for one user. We also offer a New Patient Tracking Solution and a Salary Planning Solution, please email us at email@example.com for pricing.
Developing a management report is not easy and Doctors CFO currently has a robust model for most practice types that is customized for our monthly and bi-monthly clients. If you have questions on how this model applies to your practice or you are interested in applying the Doctors CFO model in your practice, via one of our annual, bi-monthly or monthly assessments, please reach out to us as firstname.lastname@example.org.Doctors CFO provides financial analysis and valuations for doctors and dentists in the United States. We also offer programs for new patient marketing, revenue and collection management, medical practice consultant, dental consultant, and practice analysis.
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