I was surprised today to get a letter from a local insurance company, authorizing payment to me for a session I’d done in September of last year. I wasn’t sure whether to be annoyed or laugh (I decided to laugh) and as I was grumbling about insurance companies I realized that they have taught me what to do and not do with my own billing.
Let’s face it, most therapists don’t like billing and most therapists don’t like insurance. (If you’re not a therapist, read on anyway, you might find it interesting.) Insurance companies are as a rule very difficult to deal with. They make us go through elaborate credentialing processes to join a network that pays us a fraction of our fee. And when we submit claims they often hold on to them for months, delaying our payment. Or they reject the claim because of some technicality, or request a half hour conversation with us to review the treatment so that they can find a reason to stop paying for it. Insurance companies are insulated by layers of administration and bureaucracy, and finding the person to answer the question or authorize treatment can take forever. In fact, the whole premise of insurance has been to have a large enough risk pool of paying clients that they can offset the damages they incur and still make a profit. In short, insurance companies are avoidant, outdated, and hostile to claims.
So why are we just like them?
Therapists groan about insurance companies, and yet we often act just like them when it comes to running our business. We avoid filing claims as long as we can, so that we’ll get reimbursement checks that are bigger and “worth the effort.” We avoid streamlining our billing processes. And we are extremely hostile when it comes to having to file claims to get paid.
Don’t run your practice like an insurance company. Instead, here are some suggestions for you:
1. Don’t delay your billing by unnecessary process. Take a few minutes to look at the way you process bills. Are you writing them down in a ledger, maybe more than one? Do you try to sort things by insurance company rotating different companies at different times of the month? Do you have elaborate formulas for payment plans for your patients’ co-pays? (That’s insurance fraud by the way.) Do you have a calendar that you transfer to your ledger? Or if you have a software program do you enter the same data in several different places? If you are doing any of these things, you’re wasting your time. Come up with one strategy and stick with it, and cut down the number of steps that any strategy you come up with has.
2. Don’t avoid by storing up your accounts receivable. You hate it when an insurance company sits on your claims, don’t do the same thing when it comes to your own accounts receivable. Don’t store up and hoard your accounts receivable to bill “later.” Your patients and you both deserve for you to bill promptly even if it is a $15 co-pay. Don’t drag out your co-pay billing for more than a month at most. Aside from sending a devaluing message to your patients, (“I don’t need that tiny amount of money”) it adds up and can become a source of anxiety to them. Bill out in smaller amounts on a regular basis, and if you don’t, ask yourself what your behavior is expressing about billing. Storing up your accounts receivable may present you with bigger checks later, but irregular ones. For people who know the value of consistent structure, we certainly drop the ball on this one, and then what happens? You see your bank account is low and you say, “I’ve got to do my billing.” And even if you send it out that day, you’ve just set yourself up for a few weeks of anxious trips to the mailbox to see if the money has finally arrived.
3. Don’t treat patient payments like a risk pool. When it comes to billing, don’t rely on a few consistently paying patients to help you avoid billing the rest. If you allow patients to carry a balance set a dollar figure that is consistent across all of them. Mine is $400, because I know that if a patient carries a higher balance than that I may start to get annoyed and that will create static in the treatment. My billing office thinks my limit is too high, but it is what has worked for me and allowed me to be consistent. By all means set your own limit, but don’t have 30 different billing schedules and expectations for 30 different patients! It isn’t fair to the ones who pay regularly, and it also isn’t fair to the ones who don’t. And it also isn’t fair to you. This may work for the insurance companies, but it definitely won’t work for your business.
4. Do your billing every 1-5 days. You heard me, every 1-5 days. None of this once a month or every few weeks or “when I have to” stuff. You’re in business and businesses bill their customers promptly and regularly. And here’s what’s really cool, if you bill every 1-5 days after a while you’ll begin to get paid every 5-7 days. That’s it for this one, 1-5 days, no excuses.
5. Do lose the paper. Not as in misplace it, but as in get rid of it! Many of you are probably saying to yourselves, “he’s crazy. I don’t have time to do all that paperwork every few days!” There’s the problem, you’re still using paper! Start billing electronically, most insurance companies have that capability, and there are plenty of software programs out there that can help. When I used software I would send out that days appointments at 5:30, took 15 minutes. The first few times you will need to spend more time on it by typing in things to the program’s database, but after that it goes pretty quickly. And if you can get in the habit of typing in the first part of the intake the day of the intake, that’s even better.
6. Do use a billing service. I saved the best for last. If you don’t want to do billing yourself, fess up to it. It’s a reasonable business expense to have. I haven’t missed the money I pay to my billing service CMS Billing one bit. The amount of money they have captured for me (including the check from last September) has probably offset what I pay them. In addition, they do all my billing intakes, insurance authorizations, credentialing and customer service for billing questions. The time they have freed up has allowed me to develop workshops, write this blog, and engage in other creative and lucrative aspects of my business. Remember that when it comes to owning a business you need to spend money to make money. Don’t be a tightwad, hire a billing service. Then you won’t have to worry as much about the technology part. But bear in mind that they can only bill as quickly as you report accounts receivable to them, so you still need to do that every few days.
As I write this, 97% of my accounts receivable are under 30 days. I get my money with regularity, and my patients know what to expect when they reach the $400 mark. This is possible for you as well! As this fiscal year draws to a close, take some time to take stock of your billing practices. If you’re acting more like a lending company or an HMO it may be time to change.