Consider the Capital Needs of the Practice and Available Funding Sources
As practices reopen, revenue and patient volume may increase slowly and unevenly. Physicians should carefully consider their capital needs for reopening, and all available funding sources, both private (bank loans) and public (such as SBA loans or government grant funds).
The U.S. Small Business Administration offers information on coronavirus relief options here. SBA also offers a wide variety of resources for businesses, including additional loan and grant opportunities. Get details at sba.gov.
Address Accounts Payable
Organize your accounts payable and develop a plan to repay any vendors to whom you deferred payment including rent, utilities, vendors, CMS advanced payment, or any other payment modifications or loans. Maintain open lines of communication with payers and vendors on payments due that you may need to defer.
Plan to Meet Existing Obligations
Review the repayment terms of any loans, advance payments, and other sources of funding acquired as a result of the public health emergency.
Practices should review contractual obligations from managed care organizations, such as timely filing limits for claims and appeals, or submission of any encounter and/or quality data required. It is also a good idea to check employment agreements, vendor contracts, and lease agreements.
Reviewing these agreements and contracts for any clauses regarding termination, late payments, late fees, interest, etc. can save bigger headaches down the road. Maintain open lines of communication with payers and vendors on reporting or other obligations that you may not meet.
Develop a Monthly Budget
This will help going forward as things move toward business as usual. Practices can identify what costs the most on a monthly basis and adjust as necessary. Revise projections and/or forecasts to reflect any fluctuations in revenue and costs as a result of the pandemic.
Talk to Vendors
If vendors know that the office is reopening and will have revenue again, they may be willing to negotiate reduced rates, deferred payments, or other considerations. Practices should contact vendors and see what they are offering to help with startup of the medical practice.
Tackle Accounts Receivables Appropriately
As the office reopens, practices should continue or re-start collection activity and implement an internal process to follow up on outstanding claims. Office staff can pull financial reports (Insurance Aging, Patient Aging, Adjustment Report, ideally starting in the 60-day and older aging buckets). The goal should be to make sure every claim has been followed up on Patient Schedules for upcoming 1-2 weeks.
Verify Patient Contact and Insurance Information
When patients return to the office, their life circumstances may have changed. Office staff should confirm patient contact information, including address and phone number. Patient insurance eligibility and benefits should be checked to determine if eligibility is effective, or if copay and deductible amounts have changed. If patients have an outstanding balance, practices can offer payment plans. It is important to communicate with patients at the time of confirming appointments, or ideally before the patient arrives for their appointment.
Analyze Revenue Streams
Billing staff should understand the Days Revenue Outstanding (DRO), which is the average number of days it takes to collect on the practices’ accounts receivable. It is important to have an accurate understanding of revenue streams as payments may have been delayed, compared to past revenue trends, or incorrect due to payer delays in implementing telehealth requirements or other related factors.
Prepare for the New Normal
As practices reopen, they should plan for the best, the worst case, and the most likely case as well as the new normal. The PA Chamber of Business and Industry held a webinar titled, Recovery Process for Key Areas of Your Business
. The slides for that webinar are available here