Establishing effective A/R management strategies is critical to the overall financial and operational success of today’s medical
practices, especially in a time when most insurance `reimbursement rates’ are trending downward. Over the next several issues of URS E-Newsletter, I will address several key operational points that will help practices identify financial and practice opportunities along with proven methods for achieving optimal revenues and cash flows. It is unfortunate that many physicians tend to overlook the importance of directly involving themselves in overseeing A/R, primarily because of unfamiliarity and their focus remaining in clinical areas.
In this issue, I present the basic differences between `optimal
revenues’ and `cash flows’. `Optimal Revenues’ and `Cash Flows’ are terms often tossed around by many trying to sell a variety of products and services. Let’s first address the primary characteristics of `Optimal Revenues’ (OR). OR means that every possible dollar is collected on the date of service. However, as we can all attest, this rarely, if ever, occurs particularly in today’s credit driven economy. Therefore, the challenge is obvious – targeting as close as possible this ideal goal. The financial concept `Cash Flow’ (CF) refers to the amount of cash which remains available after all required cash outlays are paid in a 30 day period.
These two critical aspects of managing A/R are challenges that today’s medical practices must vigorously pursue. Keep in mind, though, they are becoming increasingly complex, time consuming and require an astute, dedicated management team and motivated staffs. In the next issue, the focus will be on the importance of establishing `tolerance ratios’ for key designated success factors and why working together as a team delivers positive results.
Other than the financial aspect, what do you find most contributes to your success?