Medical Journal Houston Vol. 11, Issue 10, January 2015
Legal Affairs: Texas Appeals Court invalidates two Medicaid regulations, see page 3
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The Leading Source for Healthcare Business News
January 2015 • Volume 11, Issue 10 • $3.50
Special Report: Financial Forecasting
INSIDE
▼
Health insurance coverage
is the key to health care
quality
see page 9
INDEX
▼
Legal Affairs......................3
Integrative Medicine.........4
Physicians Forum.............5
THA................................9
How to improve your medical practice’s cash flow
forecasting and collections performance
By Reed Tinsley,
CPA, CVA, CFP, CHBC
The ability to forecast
cash flow and collections
performance is vital to
any medical practice. Yet
many practices don’t realize
they have valuable data at their disposal
to improve these processes and increase
revenue. Much as Dorothy in The Wizard
of Oz realized that happiness lies in her
own backyard, the key to success for
many practices is to understand how to
target and mine their own data and use it
to their best advantage. That is why new
and dramatically effective collections and
performance models are helping to lift the
industry out of its “the way we’ve always
done it” mindset.
Start with three essentials
At the highest level, forecasting and
performance improvements require data
about three essential elements of your
practice’s billing landscape: 1) your historic
Net Collection Ratios (NCRs), 2) the
lag time between billing and payment,
and 3) the percentage of collections
that are insurance vs. private pay. Yet
these “buckets” of information are just
the beginning to effective collections
forecasting and performance. Within each
of these three essentials, you should also go
from macro-view to a more detailed picture
by extracting information about:
• Facility mix—e.g., hospitals vs. imaging
centers
• Payer mix
• Place of service mix—inpatient,
outpatient, ER
• Demographic zip code analysis
Once you have this data extracted to
determine your practice’s unique profile,
you can then apply the information to help
you to better project cash flows and budget
estimates based on growth and collection
trends. The information can also go a
long way to help you build more effective
marketing strategies. Let’s take a look at
two ways you can “slice and dice” your data
and the applications that are delivering
value to successful medical practices today.
View #1: Payment differential by zip code
Examining your NCRs, your lag times and
your insurance/private pay ratios by zip
code can reveal much about your practice
and impact your strategies to enhance
collections performance. For example,
you may find particular insurance carriers
are more prevalent in one zip code than
another—carriers that historically have
performed better for you than others. Or
you may find a carrier behaves differently
in a certain zip code because the employers
in that area have better contracts with it.
Or maybe a certain zip code houses a major
retirement community whose residents are
more likely to need your services and more
likely to be Medicare patients.
The results of your zip code data analysis
might look like this:
• ER Self-Pay Patient in Zip Code
XXXX1 – NCR = 6.5%
• ER Self-Pay Patient in Zip Code
XXXX2 – NCR = 10.4%
• ER Self-Pay Patient in Zip Code
Please see FORECASTING page 10
...............................................................
Breaking Ground: The Woman’s Hospital of Texas now
welcomes its newest arrival: The Pediatric Center
Health Coach
see page 4
. . . . . . . . . . . .
Linda Russell, CEO of The Woman’s
Hospital of Texas, recently announced the
opening of the Pediatric Center—located
on the fifth floor of the hospital— now
offering emergency, inpatient and intensive
care services for children ages 17 years and
under.
A room at The Woman’s Hospital of Texas Pediatric Center
“The Woman’s Hospital of Texas has long
been a leader in providing exceptional care
to women and neonates,” said Linda Russell,
CEO of The Woman’s Hospital of Texas.
Please see BREAKING GROUND page 11
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