Practice Management Playing to Win: Maximizing Profits in Urgent Care Urgent message: The financial health of your practice depends on a balanced approach that takes into account both increasing income and reducing expenses. Alan A. Ayers, MBA, MAcc F Finding Cash in the Practice Cash is the lifeblood of any medical practice; it flows in through patient service rev- enues and flows out through the payment of salaries and expenses. Changing the direction of cash flow can be a difficult undertaking, but it is possible by uncovering the common “hiding places” of cash. These include accounts receivable (AR), accounts payable, inventory, and administrative expenses. Accounts receivable days, calculated as accounts re- ceivable divided by annual sales times 365, is the tra- ditional benchmark for the effectiveness of cash col- lection and consists of both insurance and patient balances. If your practice AR is greater than 45 days 32 JUCM T h e J o u r n a l o f U r g e n t C a r e M e d i c i n e | A p r i l 2 0 0 8 and 20% or more consists of patient balances, the answer to accelerating cash flow may be found at your front desk. How well does your front desk staff understand insur- ance and medical billing ter- minology? Does your front desk staff verify insurance el- igibility and collect copays, deductibles, and prior bal- ances from every patient? And how accurately are they recording patient demo- graphic information, includ- ing guarantors and coin- surance? These common shortcomings at the front desk translate to extra work and delays in charge entry, billing, and collections on the back end. For example, a patient presents a PPO membership card that does not list an urgent care copay. The staff interprets this as “no urgent care copay,” allows the patient to see the doctor, and the claim gets submit- ted to insurance. When the Explanation of Benefits is received 20 days later, it turns out that the patient had a $5,000 deductible policy with “no urgent care benefit.” Your billing company invoices the patient without re- sponse and only after referring the account to the col- © GettyImages.com/Russell Thurston rom an economic perspec- tive, the independent ur- gent care owner/operator has a dual goal: to build the long-term value of the medical practice while maxi- mizing cash that can be taken out of the business in the form of income. To achieve both of these goals—to expand revenues while reducing costs—both a strong offense and a strong defense are required. w w w. j u c m . c o m