In the medical office, billable revenue is defined as revenue that will be earned as a result of billing for services provided to patients. Basically, any care provided to a patient for which the patient will be billed is part of the billable revenue. As most know, collecting that billable revenue isn’t always easy. In the medical office, collection is defined as the retrieval of monies owed for care provided to a patient. In short, once the office has been paid, collections are complete.
Unfortunately, the difference in these two defining terms can make or break the success and efficiency of a medical office. Often, uncollected medical fees end up ‘written off’, which means the practice doesn’t make money. Because medical collections must also adhere to HIPAA requirements, they can become a delicate matter. A disparity, or inequality, between receivables and collections is almost always inevitable. Delays in insurance payments, patients facing financial trouble, and the occasional malevolent refusal to make payments are the culprits behind this inevitable disparity.
In some cases, as is often true for delayed insurance payments, a disparity between receivables and collections is not necessarily a bad thing. The beauty of insurance payments is, while only a portion of the payment may be allowed, payment is inevitable. Patients who carry valid and usable insurance do not pose a collections threat to a medical office. Out of pocket patients, on the other hand, do. Conclusively, the medical office is ultimately hindered by a disparity between receivable revenue and collections.
Provided the office staff is efficient and professional in their duties, this disparity will not prove too much of a problem. However, if the collections invoices begin to overshadow the received revenue, the practice may face severe problems.
References
Polack,Peter. (2008, April). Medical Practice Trends: Marketing Your Medical Practice in an Economic Downturn. Retrieved April 13, 2009, from http://www. medicalpracticetrends. com/topics/marketing/ Austin, Steve. Lawyer International: The Dental and Medical Collections Legal Guidelines. Retrieved April 13, 2009, from http://www. lawyerintl. com/law-articles/