Bill Sample / December 10, 2018 / Beatrice Cotton
Have you ever taken your car to the shop and said "Gee I dont have money to pay for that new transmission. Can I float you a loan?" or gone to the supermarket and said "Sorry I dont have enough money for this cart full of food. Can I pay you later?" It sounds harsh but veterinarians have businesses to run just like everybody else. And too many with good intentions and big hearts have gotten burned by offering "credit" or "payment plans" to non-paying clients. The result? Its virtually impossible to find a veterinarian willing to offer services today with payment tomorrow. Lets face it quality vet care isnt cheap. Think about it though--would you want it to be? Because if it was cheap--Id be worried. Because it would be your pets health that had to suffer! So how can pet owners save money on their veterinary bills? Pet insurance is one answer but there are many other tips that pet owners simply dont know about it.
You need an understanding with your providers as to when you are going to be paid for your services. Doctors are often not the best businessmen and are sometimes not very good about paying bills on time. Especially when you are first starting your business it is vital that your provider understands when you expect payment and that you have something well written to protect you if you end up with someone interpreting the language of your contract in court. Each year you are in business you find additional things that need to be added to your contract. New situations arise that you realize should be covered in your contract. So how do you cover everything that needs to be covered? You need a list - actually several lists. You need a list of what you feel the providers responsibilities are. You need a list of what you feel your responsibilities are.
Days in Accounts Receivable (DAR) A growing number of days in accounts receivable are symptomatic of a faulty billing process. One way to determine DAR is to count days from the date of service to the date of payment for every claim and then average across all claims. A simpler way to compute average number of days in accounts receivable by taking a ratio of accounts receivable to average daily charges or Number of days in accounts receivable = (Accounts Receivable / Average Charge) x 365 This metric too depends on medical specialty patient demographics payer mix and CPT sample. Another downside is that this metric is sensitive to provider as it counts the lag time of unsubmitted claims for services already delivered.