The biggest advantage of using the Gap Cover billing system is that you get paid with the minimum of fuss and it’s very rare that you’ll need to chase any payments. After all, the health funds just process each payment without emotional ties and providing that the content of your claim is legitimate and that the patient has the appropriate cover, the money should appear in your account in due course.
On the other hand, one of the more tedious methods of billing can involve chasing patients for payment.
Although the majority of patients are responsible and pay their bills, there are always going to be those who drag their feet and require constant follow ups and in extreme cases ‘Debt Collection’ actions.
So, if you bill out at a Private Rate or using a Known Gap scheme you will run the risks of encountering these potential problems. So how do we combat this and minimise the risks?
There are basically 3 main ways to assist in avoiding this:
- Set your invoice payment dates appropriately
- Collect prepayment
- Offer discounts for early payment
So, what makes an appropriate amount of time for an invoice to be paid? When you think about it logically, when a person has an invoice which says you don’t have to pay for 28 days, they’ll put it aside (in the tackle later pile) and often forget to pay. Once they are issued with a reminder they’ll probably pay, but by now you’ve waited well over a month for your money.
If they receive an invoice which requires payment in 7 or 14 days then they are less likely to put it aside as it’s only just around the corner, so more often than not the payment will be made on time.
Let’s take a look at prepayment. Firstly, it would be unwise and time consuming to use prepayment on ‘every’ patient, so you want to stick with those you know have a history of bad payments. To do this you’ll want to make sure your software alerts you as soon as you book them in so that you can implement this strategy.
The process of issuing prepayment invoices, ensuring that they are paid before the surgery and then issuing an itemised receipt which can be taken to Medicare and their health fund can be tedious.
What you need is a software system which streamlines this process for you so you don’t have to worry about checking and rechecking accounts every day.
Providing you have the right software for the job, prepayment should be a breeze.
Ok, now let’s take a look at discounts. How much should you discount? What time frame should the discount be valid for? Is it worth doing? Well the answer to the last question is definitely YES. For example, most people pay their car registration early because of the discount – if you have to pay it eventually anyway, why not pay less?
So, how much discount should you offer? This is totally up to you, but 10% is a good guideline if you want to make it worthwhile to the patient and not lose too much in the process. The bigger the bill, the more likely it is for the patient to avoid paying it, so offering 10% off a big bill makes sense. If I would save $200 on a $2000 bill just for paying on time I would definitely give it extra thought!
Just as you don’t want your invoice due dates to be too far away, you also don’t want your discount date to be too far in the future. If you combine your discount period with a good invoice due date strategy you’ll minimise your risk down to the bare minimum. A good combined strategy for discounts and invoice due dates is a due date of 14 days with a 10% discount if paid within 7 days.
If you implement these strategies when sending out your bills you may just be surprised with the improvements in ‘on-time’ payments.
These logical strategies are possible if you have the right software, so make sure you check for this when choosing the system you want to use for your Anaesthetic Billing!