02 Oct Financial Reconciliation in Healthcare: Insights from Dr. Swann
Managing finances in a healthcare practice is important, especially when it comes to handling outstanding payments. When services rendered aren’t immediately compensated, these unpaid amounts transition into what is known as Accounts Receivables (AR). AR can potentially be written off during tax season, but ideally, the goal is to collect as much as possible from patients who are obligated to pay for the services they have received.
To effectively manage this, it’s essential to implement robust processes within your practice. A key strategy is to offer patients a payment plan, especially for those who may not have the financial means to pay upfront. Many clinicians prefer to collect payments before services are provided, but this isn’t always feasible, particularly when working with communities that may struggle with immediate financial resources. In these cases, offering flexible payment options can foster trust and demonstrate a commitment to patient care beyond just the financial transaction. It also helps in maintaining long-term relationships with patients, ensuring that they continue to seek care without the fear of financial burden.
For those situations where payment cannot be collected, writing off these debts is an available option. This can be an important consideration for practices, especially from a financial management perspective. While writing off debt might seem like a loss, it can be a strategic move to reduce the time and resources spent on chasing payments that may never materialize. Additionally, practices can often leverage these write-offs to offset taxable income, which might provide some financial relief.
However, it’s important to recognize that there are ethical considerations when it comes to sending patients to collections. Each practice must carefully evaluate this decision, considering what aligns best with their values and the type of care they provide. For instance, practices that focus on serving underserved populations might choose to avoid aggressive collection tactics to maintain their mission of accessibility and community support.
Financial reconciliation in healthcare involves a delicate balance between managing the practice’s finances and addressing ethical considerations. By putting the right processes in place, such as offering payment plans and evaluating the best approach to collections, practices can navigate these challenges more effectively. Ultimately, the goal is to sustain the practice financially while also upholding the core values of patient care and ethical responsibility. Practices that achieve this balance are better positioned to thrive in the long term, providing high-quality care without compromising their financial health.
Practice Support can help you with your practice’s financial reconciliation – click here to contact Dr. Swann or one of our team for a free consultation
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