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CPAs4MDs Guide to Practice Management and Internal Control

Introduction

Segregation of Duties

Supervision

Internal Controls

Tracking Accounts Receivable

Eliminating Accounts Receivable

Monitoring Insurance Payments

Conclusion





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About CPAs4MDs
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ding Tracking Accounts Receivables

The physicians Patient Income System Questionnaire should be completed yearly and reviewed by the practice administrator periodically to ensure that all open items are followed through.

On a monthly basis the practice administrator should obtain and review the Aging of Accounts Receivables Report with the physician to review all outstanding accounts receivables which are 60 days past due and need follow-up action.

We recommend that no more than two bills, after 15 and 30 days, be mailed to the patient to minimize handling and postage costs. Experience has shown that mailing repeated past-due notices is not as effective as telephone contact.

All private, self-pay accounts receivables between 30 and 60 days are to be contacted by telephone. A systematic telephone call program is to be established with the proper notation indicated by the contact person. An effort should be made to obtain some sort of payment from the patient. Simple telephone calls to patients with past due accounts can produce immediate and positive results. Although most employees are as uncomfortable making collection calls as patients are receiving them, the techniques presented in our brochure (for more information) can be used to ease this difficult situation.
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No less than three calls should be made per patient. If time and resources are limited, a dollar-factor determinant is to be used to maximize collection of large outstanding accounts receivables. At the 120-day period, the practice administrator and the physician should jointly determine which accounts receivables are to be written off and which are to be submitted to the collection agency. Only the physician is authorized to determine the patients which are to be submitted to the collection agency. For Medicare-covered services, a participating physician is required by law to make a Good Faith effort to collect the annual deductible or 20% coinsurance from Medicare patients. Routine waivers of the coinsurance by the physician are considered violations of Medicare regulations and can result in sanctions or reductions of Medicare payments.

Each month, the medical office's effectiveness at collecting charges should be measured. To do so the following should be calculated:

ding The Colection Percentage - This is a moving average compilation that measures the office's ability to collect what it bills. (For more information.) Medical practices should strive for a collection percentage of 90% or higher. A lower percentage may indicate failure to collect payment at time of service and may mean that insurance claims have been rejected or disputed.

ding The Collection Period - This is the average number of days needed to collect professional fees. A collection period of more than 90 days is generally considered to be a sign of trouble.

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To Eliminating Accounts Receivable

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