Performance Matters Matrix – Collecting

Collecting earned income for a business is like crossing the finish line in a race. Failure to finish is well, failure. Collected income is less about wealth creation than it is a validation of business strategy, operational systems, management decisions, professional judgment, regulatory compliance, and service value.  

The Collecting cell is located in the lower right corner of the Performance Matters Matrix. It is found at the intersection of financial value and results. Collecting contributes financial value in the most direct way possible; and builds trust by producing tangible evidence of the Practices relevance and financial  viability by providing compensation and return on investment to stakeholders – owners, employees, and vendors. Compensation is the last link of the value chain in all practices.

Collecting encompasses the receipt of cash payments such as co-pays and deductibles as well as deferred reimbursement paid privately or through third party payers. It includes the management of accounts receivable, resubmission of payment rejections, appealing rejections, working delinquent accounts, legal actions, write-offs, and related banking matters. Its work that takes place out-of-sight in the back office but always on the front burner of successful practices. It is a purely business function that is poorly understood by clinically trained managers with service-facing priorities.

The key metrics associated with collecting is Days in Accounts Receivable (Days in AR), also called Days of Services Outstanding (DSO) – i.e. how long on average it takes to collect what is owed. Aged Accounts Receivable provides a detailed profile as to the percentage of dollars owed over certain time periods – current (less than 30 days), 30-60 days,  60-90 days, 90-120 days, and 120+ days. It’s surprising how many practice owners overlook these vital metrics or are even unfamiliar with them.

Collecting involves optimizing several key processes: qualifying the practice to receive payment, verification and preauthorization of benefits, billing and collecting, reducing collecting related time and expense, continuous learning about ongoing reimbursement changes. Collecting is complex and ever evolving. It requires sophistication and accountability.

Collecting is a race that is run every day and the stakes are high – finish or be finished. Run well…

All The Best!

Bob

(c) copyright 2010

Performance Builders