Cash is the lifeblood of business—it enables staff to be paid, it covers operating overhead like rent and utilities, and it provides a return to investors. In fact, the number one reason start-up urgent care centers fail is that they run out of cash prior to attaining break-even volumes. If the saying “cash is king” is true, then an urgent care center to be successful clearly must watch its cash flow.
Below are six ideas for assuring an urgent care center always has sufficient cash on hand to cover its daily needs:
- Collect as much as possible up front. Rising deductibles, co-pays, and co-insurance for private health insurance mean many consumers, despite having insurance, will be paying for their urgent care visits out of pocket. When an urgent care claim is denied by insurance—due to an unmet deductible or other reason—it can take 60 or 90 days to collect from the patient. Using tools like Real Time Eligibility to verify that a patient’s insurance is valid as well as to identify any deductibles and the proper co-pay can support a center in collecting what a patient owes prior to a visit. In addition, a center should collect any past due balances prior to seeing a patient for a new condition. The risk of settling patient financial responsibility up front is that a center may collect too much, thus requiring a refund, but it’s better for cash flow to issue refund checks than collection notices.
- Credit card pre-authorization as a catch net. When you rent a car or hotel room, the expectation is you’ll provide a credit card to cover any additional expenses beyond the rental rate and tax. Given that it will not always be possible to correctly identify patient financial responsibility at time of service, credit card pre-authorization likewise enables an urgent care center to swipe a patient’s credit card and place an authorization on the account for the expected charge amount. Patients are then notified by email within seven days when and if their credit card is charged. Asking for pre-authorization sets the expectation that a patient will be responsible for some portion of the visit fees, but it doesn’t let payment at the time of service stand in the way of immediate treatment. “You minimize your risk of bad debt upfront,” said Joe Goken, Controller at Practice Velocity. Mitigating the risk for urgent care operators, who might otherwise see significant delays in payment or accounts sent to collections, can improve cash on hand.
- Staff appropriately for customer flow and the best possible contract rates. “While your employees are your greatest asset, labor costs are also your single biggest expense. We are probably all paying for more labor costs than we actually need to run our centers at peak performance,” said Logan McCall, CEO of ZipClinic Urgent Care centers in Kentucky, Montana and Colorado. Providers need to monitor patient flow to make sure you’re not understaffed or overstaffed during certain hours. Generally urgent care providers are expected to see between 3 and 4 patients per hour, according to Urgent Care Association of America benchmarking data. You may need to adjust your center’s operation or its hours. Also, many urgent care operators assume they can save money by staffing with mid-level practitioners but it’s not always the case. It’s important to think about the reduction in reimbursement levels that comes with that staffing. Mid-level providers are often credentialed at collection rates up to 15 percent less than physicians. It may make sense to staff a physician or have a dual provider. You can bill at the higher level if the physician renders some of the face-to-face care.
- Be proactive in occupational medicine claims. A workers compensation claim could take up to two years to process. That’s not good news when it comes to keeping a steady cash flow at your center. Office staff should push to get the workers compensation payer information as soon as possible to get a bill filed. “Don’t go through the employer if possible. The provider (for workers comp) should be available to all employees posted in the cafeteria or another public spot in the building. Have the patient take a picture of the poster and bring it in,” Goken said.
- Complete charts quickly to hasten the billing process. A bill can’t be filed for a chart that’s still sitting open. Providers should aim for same-day charting as much as possible. “The sooner you send out the bill, the sooner you get paid,” said Monica Klosa, Director of Billing at Practice Velocity. Also the more time that passes between seeing a patient and charting can result in a greater likelihood of errors and omissions. Electronic medical record systems enable a chart to be completed immediately upon the provider encounter.
- Monitor supplies and stock wisely. Supplies on a shelf represent cash that could be put to other uses. An inventory management system, which is provided by some medical supply vendors, uses barcodes to track supply inventory on hand, supplies used, as well as to flag minimum on-hand and auto-replenishment levels. Whenever possible, arrange for same-day or next-day delivery from your suppliers without paying a premium so you don’t have to carry excess supplies, Goken said. In some cases, however, it makes sense to stock up. For example, often flu vaccine distributed will let you order in August and not bill until December. Plus, you can usually send back whatever is unused, Goken said. Across the board providers should do analysis of their supplies, what they are using and if they are getting the best price.
Staffing models, timely billing and supply inventory can all impact an urgent care center’s bottom line and cash inventory. Follow these tips to maintain a successful practice and avoid running out of cash.