Cash flow is the lifeline of any business, and medical practices have unique challenges with receivables that require unique solutions.
For healthcare businesses, managing receivables successfully is about more than just the timely processing of payments. It’s also about managing insurance contract compliance, protecting accounts from fraud, and ensuring practices have enough cash on hand for payroll and any unexpected purchases.
Maintaining strong cash flow starts with making sure patients can pay in the manner most convenient for them, but it continues all the way through to the banking and treasury systems and processes that support the practice. If your healthcare business is struggling with cash flow, now may be the time to rethink the treasury management products you use and address your problems through new solutions.
Addressing collection issues
Medical practices have made it through a challenging, pandemic-afflicted year. For many, expenses have gone up — for things like personal protective equipment — while patient volume has gone down.
If your practice was already struggling with collection rates, these circumstances might have had a constricting impact on cash flow. But while there is little that practices can do to change their pandemic circumstances, there is a lot they can do to maximize collections and other elements of revenue cycle management — especially if they look into how their banking relationship supports their business.
Banks like First Republic offer multiple solutions for working directly with your practice or billing service to drive up collections and address related challenges. These include:
- Lockbox Solutions that allow medical practices to outsource the receipt of checks (from both patients and payers) that currently arrive by mail in the office. Not only do checks typically arrive to a lockbox faster than a practice, but using an outsourced solution also expedites the collection process by eliminating the manual activities being done in-house — getting checks deposited and contributing to cash flow faster than handling them onsite. Lockbox solutions from First Republic are HIPAA-compliant and, depending upon the type opened, have the ability to automatically update patient-pay receivables using scannable OCR invoices. Practice leaders can also easily view EOB information from commercial payers online for easy access to payment information and claims reconciliation.
- Biller and Payment Solutions that provide patients with ways to pay online via the practice website or a standalone portal — creating one more point of collection that aligns with how patients may prefer to pay. As individuals migrate away from checks toward more electronic forms of payment, offering the opportunity to pay using credit cards or ACH (Automated Clearing House) can get your practice paid faster and contribute to more consistent cash flow.
- Remote Check Deposit solutions that enable practices to scan and deposit checks received on-site for same-day credit up until 9:00 p.m. ET, with no trips to the bank required. For practices that stay open later than 5:00 p.m. ET, the ability to deposit checks and receive credit after regular banking hours right from the office can be highly beneficial to speeding up cash flow.
Improving protections, payments and account management
Preventing fraud is a top-of-mind concern for cash flow, as well. Not only do fraudulent checks or ACH transactions take money away from the practice, but they can take weeks or months to spot, investigate, and resolve — slowing down many aspects of receivables and revenue cycle management by taking up time.
That’s why First Republic offers both Check Positive Pay to help prevent fraudulently issued checks from posting to your account, and ACH Positive Pay to prevent unauthorized electronic debits from posting to your account (while allowing only authorized payments to be processed).
Fraud prevention is just one element of an improved approach to payments and account management that can help ensure consistent cash flow for the business. Additional solutions include:
- Commercial Card Services that give practices a way to pay for equipment, supplies, or other key purchases without writing a check or making an immediate debit from their bank account.  This can allow for up to an extra 55 days of float in your payables cycle compared to ACH or check payments. For example, if you bought $10,000 worth of medical supplies on the first of the month, you don't get a statement until the end of the month — at which point you typically have another 25 days to pay it.
- Payroll Services that allow you to completely outsource the entire payroll process, as opposed to managing it in-house. When healthcare business are in need of payroll services, First Republic has the ability to introduce clients to various payroll providers in order to ease the burden of processing payroll. Payroll processors can handle payroll far more efficiently so that more of your staff resources can be applied to managing collections and other concerns.
- Bill Pay, ACH Electronic Payments and Wire Transfer Services that allow you to make payments far more efficiently than by exclusively cutting checks.
First Republic allows you to initiate bill pay, ACH, and wire transfer services through its easy-to-use, browser-based account management system called Corporate Online. Corporate Online also allows you to review all balance information on your account — including detailed transaction activity — and stay in control of cash flow with full visibility into incoming and outgoing payments.
Reviewing detailed transaction activity associated with ACH credits and debits is possible through FedEDI (Federal Electronic Data Interchange) reporting. FedEDI reporting allows medical practices to easily view all receivable detail that is sent along with electronic receivable payments; if an insurer payment includes EOB information, for example, that EOB information sent electronically can be viewed in an easy-to-read PDF format.
System integration to reduce manual workloads
Several bank solutions are designed to lessen the amount of manual processing and data entry it takes for healthcare businesses to get paid and manage their accounts.
First Republic's Lockbox and Biller and Payment Solutions have capabilities that integrate with various receivables and healthcare systems to lessen manual work. If a practice has a patient-pay lockbox, for example, the service can do data capture of the patient’s billing number, and the practice can automatically upload that file into the receivable system.
It’s all designed to make sure your practice’s efforts can be focused less on data entry and more on the patients who are so important to your cash flow.
Evolving solutions for your evolving needs
Healthcare organizations are grappling with pandemic-related challenges and the changing environment in which patients are ever more responsible for payments. As patients come back to the office in 2021, it would be wise for practices to re-evaluate how well their collection solutions are meeting their patients’ preferred methods of payment.
At First Republic, we are constantly improving our solutions to fit the needs of our customers and help support the success of their businesses. Any practice struggling with cash flow or treasury-related issues should not hesitate to reach out to us, as we can suggest solutions that might fit your needs better and make your healthcare banking easier.
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