By Brent Warrington bio
Medical practice profitability is a regular concern for practice managers. Now the Affordable Care Act has perhaps shined a brighter light on what it takes to stay in the black. What’s more, insurance companies are under pressure to manage costs and grow revenue, sometimes resulting in lower payments to physicians for patient visits, services, and annual reimbursements.
The Affordable Care Act is expected to increase participation in Medicaid by 16 million individuals. Since Medicare and Medicaid reimbursement rates are lower than those offered by private insurers, this means a reduction in reimbursements for physicians who accept these patients. Combined with the trend toward flat-rate reimbursement models and the pending replacement of ICD-9 codes for medical diagnosis with ICD-10 codes which will result in longer processing timelines, it’s clear that physicians and office managers need to identify new strategies to maintain long-term profitability.
There may be little you can do to mitigate the impact of new healthcare legislation on your practice. But an uncertain legislative environment is all the more reason to look for ways to improve your own bottom line in a way that does not compromise patient care or satisfaction. Most medical offices have savings hiding in plain sight – namely, in the way they process patient payments.
Reevaluating your payment processing technology
If your practice is like most, you probably set up a payment processing system years ago and have since given it little thought. But payment technology, when done right, is a tool you can put to work for the business. Healthcare practices are increasingly using payment processing platforms to capture actionable insights and analytics that can enhance financial performance and make it easier to collect payment.
There are several ways medical practices can change the way they process credit and debit card payments, often patients’ preferred methods of payment, to improve cash flow and profitability. Following are a few criteria by which to evaluate effective payment processing:
1. Set up recurring billing options and secure credit card vaults
In the all-too-familiar “traditional” payment scenario, the practice submits reimbursement requests to the insurance provider and bills the patient for the outstanding balance, incurring a lag time of weeks or longer before the practice sees any money from either the insurer or the patient.
An alternate approach involves finding a secure way to store credit card information that can be used for recurring payments from patients. This can be accomplished by using a payment processor that offers a secure credit card “vault” and recurring billing features. The right solution can also allow for installment plans to accommodate patients who cannot cover their bill in one payment, thereby improving cash flow, reducing back-office paperwork and eliminating the kind of billing bottlenecks that make it harder to operate efficiently and profitably.
2. Offer multiple payment options
Today’s patients expect the ability to choose their payment option. The best payment processing solutions enable payments through multiple channels, including a payment page on the practice website that accepts secure medical payments via credit or debit cards, and a Point-of-Service (POS) option that accepts payment following an office visit.
To accommodate your patients’ payment requirements, look for a payment processor that complies with PCI (Payment Card Industry) security standards, accepts multiple payment options under a single account, and offers consolidated reporting. By selecting a robust payment processing provider, you can encourage faster payment times by giving patients more options and eliminating back-office support requirements associated with multi-vendor processing.
3. Manage credit card processing fees
Credit card processing fees present a direct threat to practice profitability because they take a percentage of every credit or debit card transaction, reducing the net revenue received from patients.
As long as the other ‘must-haves’ (compliance, security standards, etc.) are met, office managers should search for the lowest available transaction fees. I’ve seen a typical two-physician practice save $10,000 a year by finding a payment processor with a lower standard fee.
Given the current trends in the healthcare marketplace, the challenge of maintaining practice profitability isn’t going away anytime soon. But the good news is that small changes in payment processing can make a big difference in your practice’s bottom line and improve your ability to provide an exceptional patient experience.
Brent Warrington is CEO of SecureNet Payment Systems, an Austin-based firm that has been streamlining the way businesses accept payments since 1997. Brent has more than two decades of experience in the payments industry.
The above information is shared by a guest contributor and does not necessarily reflect the views of Medical Office Manager.
