Maintain Solid Financial Policies

A Cornerstone to a Medical or Dental Practice Collections

Third-party payers are paying less and patients are paying a higher percentage of their medical costs.  Employers and patients are opting for higher deductibles to keep their out-of-pocket premium costs at a reasonable level.  To work effectively with your patients it is becoming more important that you have a written financial policy and use it.   The following are some thoughts regarding the importance of maintaining a solid financial policy.

Financial Policies
  • Why do you need a financial policy? Collecting money directly from your patients can be the hardest money to collect.  Emotionally, it is difficult for doctors and their staff to deal with patients and their financial matters.  A financial policy provides a set of procedures that will help you with your collections.  This written document provides you and your staff with the methods and best procedures needed  to service your patients when collecting from them directly.  Being most effective in this process is key – it will keep you in the business of caring for your patients.
  • What are some best practices for communicating our financial policy to patients? First and foremost, the policy should be in writing. Use simple, words.  Use Microsoft Word or similar program to assess the reading level of your document.  For best practices, your document should have a reading level no higher than the seventh grade.

All of your staff should be educated and have a complete understanding of the policies.  Everyone in the office should know how to collect money from a patient.  Having clear, consistent, and firm policies are crucial to having an effective policy that patients will understand and respect.

Best practices include communicating your financial policies and your expectations to the patients when they are scheduling an appointment.  Include a copy of the policy in their “new patient” packet that you mail to them or direct your patients to a copy on your website.  Be sure to have them sign a copy when they visit your office.  Retain the signed document at your office and provide a copy of the original to the patient for their records.

In addition to providing this to new patients, it is a good idea to remind returning patients of your policy.  If you find that it is necessary to update or change the policy, be sure to notify your patients of the policy change.   This can be done by way of a letter, notice in the office, or a notice on your website.  Use what will work best for your practice ensuring that the patient is well-informed.

  • What should the financial policy contain? Be sure to clearly indicate all the financial aspects associated with a patient’s care in your office.  For example, do you charge a no-show fee?  Are there penalties assigned if the patient doesn’t pay his co-pay at the time of service?Let the patient know, your office strives to provide the best possible care and will help the patient, using your best efforts, to obtain their maximum insurance benefit.  Remind  the patient the financial responsibility for payment is, ultimately, their responsibility.  Explain co-payments, high deductible amounts, and non-covered services must be paid at the time of service.  I recommend you have a financial arrangement agreement that will address these amounts and how they will be collected.  Also, it is important this financial arrangement is reviewed with the patient before they are scheduled for any procedure.

    Additionally, here are some other items your policy should include:

  1. The patient agrees to inform you of any address changes or updates to their insurance benefits (there should be no surprise if you ask them for a copy of their insurance card or driver’s license)
  2. The forms of payments your practice accepts (cash, debit or credit cards, checks, Care Credit)
  3. The fees charged for checks that are returned
  4. How delinquent accounts are handled
  5. Hardship application and documentation
  6. To whom the patient should direct their billing questions
  7. How patients without insurance be handled (this is especially important for dental practices)
  8. Charges for making copies of medical/dental charts
  • Office Procedures for your staff – In addition to having a financial policy and a financial arrangement agreement for your patients, I would also suggest that you have a written protocol for managing the accounts receivable.  In this document you should describe the procedures and systems that you use.  Everyone in the office should be trained on the procedures.  When someone joins your team, this written document should serve as a training system for your new hire.  This document would also become the source by which you hold your employees accountable to keeping the accounts receivable clean. This document may include items such as:
  1. How a patient credit balance is handled
  2. When a patient balance is sent to collection, what code is used to adjust the balance off the patients’ ledger
  3. What notes and alerts are put on the patients accounts when the account is in collection or when a “hardship” situation is granted
  4. The process for granting a hardship application
  5. How the aged accounts receivable balances are worked and who is responsible
  6. How the aged insurance balances are worked and reviewed and who is responsible
  7. How often billing statements are sent out
  8. What the criteria is for not sending a statement
  9. What dunning notices are used and when they should be applied
  10. The process for granting and approving patient payment adjustments
  11. How the practice management will be used to note communications and agreements with patients
  12. How to process credit cards

Mike DeVries is a CERTIFIED FINANCIAL PLANNER ™, Enrolled Agent,  and a Certified Healthcare Business Consultant focusing on helping healthcare professionals. If you would like to learn more about becoming a client, contact Mike at

Are You Ready for MACRA?

How do you define the success of your Practice?

What's the formula for defining Success in your practice?

Is it based upon the profits you earn?  Or, how about the difference you make in the lives of those for whom you care?  To truly care for your patients effectively, you need to be profitable.  And, to be profitable, you need to know your financial numbers and what strategies to employ to make a difference in your bottom line.  Knowing your numbers is like knowing the score of a game you are playing.  When you know the score, you know what strategies you need to employ to win the game.

If you are a physician or healthcare provider that cares for Medicare beneficiaries, you should have a full understanding of the MACRA payment program.  It’s likely that you have heard of the program, but you may still have questions about how it will affect you.  Do you know what you can do to increase your MACRA goals to have an impact on your profits?

The National Committee for Quality Assurance (NCQA) has developed a Toolkit to assist you.  This toolkit details the MACRA requirements, explains how the payment structure will impact your scoring potential, and suggests strategies that you can incorporate the patient-centered medical home model to improve your MACRA Score.  You can use the virtual toolkit at anytime by simply registering to use it.


Learn to Be a Winner!  Use this toolkit to explore case studies and improve your scores- it’s a formula and strategy worth knowing.

Mike DeVries is a CERTIFIED FINANCIAL PLANNER ™, Enrolled Agent,  and a Certified Healthcare Business Consultant focusing on helping healthcare professionals. If you would like to learn more about becoming a client, contact Mike at

Is your Medical or Dental Practice ready for EMV?

Be ready by October 1, 2015

October 1, 2015, all businesses that accept in-person credit card payments must be able to accept new EMV-compliant credit and debit cards, or risk being responsible for card fraud losses.

EMV Credit Cards

Establish Benchmarks to Improve your Bottom Line

7 Measurements for your Healthcare Practice

Peter Drucker, who was known for his leadership in the development of management education, once said, “Work implies not only that somebody is supposed to do the job, but also accountability, a deadline and, finally, the measurement of results —that is, feedback from results on the work and on the planning process itself.”  If you wish to manage your business effectively, it is important to establish measurements or benchmarks for the purpose of creating accountability for your company and to determine if you are meeting the overall objectives of your business strategic planning.  The measurements you define will also help  your employees more clearly identify with your goals as well as provide you with an assessment tool for evaluating performance of your team.

Performance Level Conceptual Meter

5 Action Steps for Optimizing your Collections

5 Action Steps to Improve Your Bottom Line

5 Action Steps to Improve Your Bottom Line

The number of patients with high-deductible commercial plans continues to grow.  The costs of health insurance premiums are on the rise, which means that employers are likely to eliminate other employee benefits, such as dental benefits.

It’s a fact; your patients have to pay more today for their healthcare than ever before. Since 2006 your patients have experienced an 88% increase in their commercial deductible amounts and since 2002 the percentage of practice receipts that are derived from patient payments have increased – going from just over 10% to more than 30% today.  I recently saw a quote in Medical Economics that read, “What you collect from insurance companies covers your overhead.  What you collect from patients goes to your bottom line.”

What business priorities must a practice make today to stay on the path of financial health?  I recommend that you take action on the following five practice management strategies:

  1. Focus on the process of patient collections – Create a mapped out plan as it relates to the workflow at the front desk, patient check-in, and the patient checkout process.  Your front desk team members are the lynchpin to keeping your collection process rolling.  Be sure each staff member, full-time and part-time, is educated on your billing process and clearly understands their role in the process of patient collections.
  2. Review your systems used for patient collections – Dust off and review your current Financial Policy to ensure that your policies clearly outline your process for billing and collections.  Because today’s patients are paying more out-of-pocket, they are becoming more involved in their choices for how they receive their care and from whom they receive it.  Your Financial Policy should be crafted in a way to effectively collect your fees and market your services at the same time by conveying a sense of value.
  3. Offer financial arrangements –  I recommend that you have a written Financial Arrangement with your patient.  This document would outline the costs of your services, potential discounts, the estimated patient responsibility, and the patient’s agreement to the method of payment. Introducing this document and going over it with your patient during the initial registration of a new patient or during the check-in and checkout of an established patient might be a shift in your business process, but it will assist you in your collection efforts.  Studies have shown that only 21% of patient balances not paid up front are ever collected.  Having a pre-planned financial arrangement is critical to maintaining a financial healthy practice. You just can’t cut business costs enough to make up for the lost revenue caused by ineffective patient collections.
  4. Check insurance eligibility and benefits upfront – Determining your patient’s responsibility at the time of service or at the time of scheduling using technology that is readily available today is mission critical.  This starts with determining their eligible benefits and then drilling down to estimate their out-of-pocket costs.  Taking this step will do a few things for you and your patient.  It will assist you in obtaining copays and deductibles upfront.  It will eliminate the delay of receiving insurance claim denials, which cause unpaid patient balances, and, it will benefit your patient by removing the anxiety of not knowing what their cost will be.  By being proactive in this process you will increase your patient collections and will improve patient satisfaction.
  5. Establish a payment card on file program – To optimize your collections you should establish a payment card on file program, which will accelerate collections and improve your cash flow.  However, keep this important factor in mind – this process should only be implemented using a system that will comply with Payment Card Industry (PCI) regulations and billing standards.  I recently met with a doctor who said to me, “Oh, yes, I do this already.  My front office staff member is collecting the credit card information and charging the patients’ card each month.”  He had no idea that this was a breach of the regulations, as you are not allowed to maintain credit card numbers in your office or on your computers.  Establishing an effective payment card program starts with using the right technology and managing your merchant service costs.  To view a demonstration that I recorded for physicians and dentists interested in this process click here.   The positive results of implementing this in your office include improved collections, improved cash flow, elimination of sending out statements, faster check-in and check-out process, and reduced staffing costs spent on collection efforts.

A doctor’s office must be diligent in their business efforts of billing and collecting outstanding balances from their patients – it’s the difference between having a profitable or unprofitable business.  If you would like assistance with reviewing your financial policies, your accounts receivable, or implementing a new collection process in your office, you can request additional information here.

Mike DeVries is a CERTIFIED FINANCIAL PLANNER ™, Enrolled Agent,  and a Certified Healthcare Business Consultant focusing on helping healthcare professionals. If you would like to learn more about becoming a client, contact Mike at