We sometimes throw terms around and assume everyone understands them and that is not good.  Take the term accounts receivable (AR), for example.  This is simply money that patients (or third-party payors) owe us in exchange for services that we have provided.

Today, we have about $17 million in AR.  That’s a lot of money.  But, one has to know several other factors, such as the age of our AR and the number of days in AR, to gauge how well we manage our AR.  I can tell you that we do a good job, based on a comparison to national metrics.

But, here is something that is even better than collecting on AR—collecting money at the time-of-service. What we collect when the patient is in front of us never becomes AR.

Look at it this way: if I owed you $20, would you rather me hand it to you right now or would you prefer to send me two or three statements asking for the money and maybe dragging out the time that I take to pay you for a month or two (or three)? In this example, you would incur "costs" to collect the $20 from me—postage, paper, your time, and the “time value of money.” No, you would rather have the money today. Our practice is the same way. We prefer to collect money today for services that we provide today.

Some experts say that the acceptable benchmark for collecting at the front desk is 90 percent of the patient’s portion. So, we need to quantify the percentage of daily office visits where a collection at the front desk can take place and see how we are doing compared to the benchmark.

If we are below 90 percent here are some things we can do:

• Explain our collection policy to our patients before they arrive. One expert advises this language, “Your insurance company requires you to pay your copayment.” We can send the message professionally (kind, but firm) that we expect to receive payment at time of service.

• Use the right words when asking. “How would you like to pay today?” is much better than “Would you like to pay?” Remind patients that we accept most forms of payment — cash, check, debit or credit card.

• Collect a deposit from the uninsured. For patients who do not have insurance, request a minimum deposit. It is a good idea for the “deposit” to be the average payment that is expected from commercially insured patients (this is not the full charge). As a rule of thumb, collecting 60 percent of charges is a valid figure — if you have questions, ask your supervisor.

• Collect any AR balances, too. Time-of-service collections include the amount owed for that particular visit and anything outstanding from prior encounters from any department in the practice. We should ask for all balances, regardless of age.

Money we collect today helps to pay salaries and other expenses tomorrow.