Reduce the Chaos: Clear Financial Policies

TODAY, medical clients are more stressed about their finances than ever before. Your customer can be extremely upset if he or she receives a financial surprise. It’s wise to remember that a surprised customer will first be an embarrassed client, and then will become an angry customer.

If you want to avoid all this stress and anger, take the following steps to clearly outline your medical office’s financial policies. Clear financial policies are a very real part of customer service, especially when presented by a warm, empathetic and knowledgeable staff. In addition, for a policy to be effective, it must be well understood by the medical office staff and backed up by the owner and manager.

Determine the Health of Your Accounts Receivables

As a basic guideline, your accounts receivable (AR) balance should not exceed one half to one month of production.

Run a “clean” AR report that does not include credit balances and analyze the 60-day-and-over column, as well as the 90-day-and-over column. In general, the 60-day-and-over column should not be more than 4 percent to 6 percent of what your clients owe you. The 90-and-over column should not be more than 2 percent to 4 percent of your AR.

Make certain also to run a past-due report. Any accounts 30 days past due require a follow-up call from the team member responsible for this department.

The owner’s role is to hire, train and provide oversight for your financial health. Even with the finest office manager, the owner should still be involved and should be the leader in the business.

The owner should review the AR on a monthly basis, or more often if this area of your business needs additional attention. Many offices have a policy that “everyone does everything.” With a more systematic approach, the owner can oversee those accountable for particular areas. In addition, your team members will know who to ask for what, such as which staff member should speak with a particular client. Designated office responsibilities with clearly defined goals and expectations will decrease stress and increase professionalism in your office.

If your AR balance is less than one half of your monthly production, your financial policies may be too firm and staff may be unintentionally running clients off. On the other hand, for your established customers of record, you might consider flexibility in payment if the client has demonstrated a good history. If you do offer financial options, however, do not extend them for more than three months and have a re-bill policy, or inform the client of interest due after or during the three-month period. Also, verify the credit history of the client prior to advancing credit.

Check with your state law regarding interest regulations and present a written policy to the customer.

Do you have old accounts on your AR that have been turned over for collection? Adjust these off so you have a true AR that is collectable. Enter the adjusted amount into the client’s record and keep a separate ledger file for this activity. Check with your accountant and clean up your accounts receivable report.

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