As a temporary measure, I no longer provided direct billing. Then I reviewed how often billing was being done for auto insurance and workers’ compensation patients. Lastly, I eliminated special payment options, which some patients were used to. After one month of implementing these changes, I was seeing 105 patients per week and being paid for 100 per cent of the visits. Naturally, this was just part of my solution. I needed a system that would allow me to return to direct billing to reap the rewards of seeing 160 patients per week.
As I was pondering how to fix my problem, I made a trip to the supermarket. While at the checkout counter I realized grocery stores insisted everyone pay upfront and in full before using their products. With this in mind, I developed a system to forever eliminate accounts receivable.
Paid on arrival
The first thing I did was not only to make sure every chiropractic, physiotherapy and massage patient paid the same day of the treatment – I made sure they paid before every treatment. This was done not only to ensure I received payment, but also to enhance the patient experience.
The primacy and recency effect is a psychological phenomenon used to explain how our brains process information. The human brain is more likely to remember the first bit of information (primacy) and the last bit of information (recency) during an isolated experience. I found that most patients arrived an average of ten minutes early for their appointment. Since paying is the most undesirable part of the treatment experience, I use this time to cash out patients at the front desk. This way, I could “bury” that memory somewhere between the primacy and recency of their visit. This way the last thing they remember from their visit is how good they feel as they leave my office.
Here today, billed tomorrow
I designated and trained my staff to bill extended/auto insurance companies, and I insisted that billing be done the day of or day after the patient’s visit. This approach allows for better tracking of outstanding balances. My staff monitors this on a weekly basis and discusses this with me during our mandatory, weekly, 10-minute meetings, where we discuss billing, outstanding balances and what we are doing to secure our money as soon as possible. In addition, I assess a billing surcharge of $1 to $2 per visit – on top of the treatment price – for direct billing to cover the extraneous costs of labour, stationary, electricity, postage and interest charges which are incurred at my expense. Remember, you are running a business, so your policies must be consistent with running a viable organization, not a charity.
Bridging the lapse
When we direct bill insurance companies there is traditionally a significant lapse in getting paid from the time the treatment is first administered. The problem here is that if your clinic is direct billing $10,000 per month and it takes three to four weeks for the funds to reach you, then you are always $10,000 behind in terms of cash flow. I can suggest two solutions to this problem.
Telus Health Portal is a free tool which allows chiropractic clinics to download a billing program that works with 31 extended insurance companies and hundreds of health plans. This allows me to bill the patients’ insurance electronically, which allows the funds to be deposited into my account within 24 to 48 hours. This eliminates the long wait times standing next to the mailbox waiting for the cheque to arrive. Most importantly, it restores the lifeblood of your business – cash flow.
A second option is securing a business line of credit from a bank. In this solution you borrow $10,000 from a line of credit so that you are never “behind” and cash flow is always intact. The interest charges are paid for with part of the proceeds generated from the billing surcharges.
Be a pal and square up
As time evolves, so does technology – and so should your practice.
On a monthly basis I promote gift certificates for our services through social media sites like Twitter (@hamback), Facebook and Instagram (@hamiltonbackclinic). These certificates are paid online using Paypal, a secure site used to take credit card payments. Patients with outstanding balances also use PayPal from home to pay for products like orthotics and braces before coming in to pick them up. PayPal then deposits the money right into your clinic account for a small percentage.
Square, or Square.com, is now in Canada, and I use it with my iPhone to collect payment from patients when my frontline staff is not at work. This device is a square attachment that plugs into my touch screen smartphone and allows me to swipe the patient’s credit card on the spot. The app then allows the patient to authorize the purchase by signing the screen with their finger. The receipt is sent to the patient by email or text message right away.
Square charges 2.75 per cent per transaction, which is about 1.25 per cent more than conventional point of sale machines. Even still, it is very handy when I am working alone, as I am able to process payment in the treatment room. This alone saves me almost $2,000 per year in labour costs as it relieves the need for frontline during certain days.
Anthony Lombardi, DC, is consultant to athletes in the NFL, CFL and NHL, and founder of the Hamilton Back Clinic in Hamilton, Ont. He teaches his fundamental EXSTORE Assessment System and conducts practice-building workshops to health professionals. Visit www.exstore.ca for information.