Month-end closing is an accounting practice that businesses rely on to review and analyze their accounts, spending, and records for the month. It ensures that no transaction goes unaccounted for and keeps all financial data well organized. Month-end closing isn’t limited to specific industries; it’s a necessary practice for all businesses that generate revenue, have a payroll, and pay taxes or regular expenses.
Private practices and healthcare clinics are businesses that need the same financial handling as all other companies. However, because the healthcare industry’s billing cycle is highly complicated compared to payment processing in other sectors, running regular month-end closing can be very demanding. The task can put a lot of pressure on billing staff and account managers, so many clinics and practices skip over the process entirely. While ignoring month-end closing for your clinic may save you time and effort, it can cost you in the long run if you miss errors or unusually high charges and rates.
The Complex Cycle of Medical Billing
Billing in almost all other industries is relatively straightforward—the customer pays for the service or product, and they receive it. However, the billing process has much more to it in the healthcare industry due to the nature of the services provided and the multiple parties involved in each transaction. In short, the medical billing cycle consists of six primary steps:
- Patient check-in
- Validating insurance policy information
- Providing diagnosis and treatment
- Charge entry
- Submitting payment claim to insurance policy providers
- Posting the payment
Because every step in the billing cycle is a whole process of its own that relies on human and computational elements, a lot can go wrong in a single step that could then move further down the line and grow in complexity.
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Errors, Delays, and Other Stumbling Blocks
There are countless variables in every medical payment, and any part of the process could go wrong. Your billing staff is up against poor communication with the patient or insurance policy provider, banking errors, system failure, misdiagnosis, and human error on either end. Not to mention, a single billing error could be the result of consecutive mistakes that occurred in different parts of the billing process, making tracing back the issue to the roots much more challenging.
While some errors immediately raise a red flag and are easy to mend, others go under the radar for far too long. Over time, you can develop a backlog filled to the brim with credit balances with state-enforced deadlines to repay and unidentifiable issues that keep repeating. Consequences range from state-mandated fines, customer dissatisfaction, and financial problems with insurance companies, which can negatively affect your clinic’s bottom line.
How Month-end Closing Can Improve Operations
Consider month-end closing as your regular sweep for billing errors and mistakes and credit balances. That way, instead of continually being on the lookout for errors or getting surprised by a filled backlog, you run regular check-ups and fix errors as they happen on a monthly basis.
Month-end closing doesn’t only help mitigate billing errors. It also gives you valuable insight into your billing process, what often goes wrong, how severe the errors are, and your average losses. In addition to fixing errors early on and preventing them from reoccurring, monthly end closing gives you more control over your billing process. That makes it more efficient and costs you less in refunds and fines, consequently increasing your clinic’s bottom line in the long run.
Clinic and Private Practice Management and Billing Assistance
Especially in the healthcare industry, it’s not uncommon for businesses to hire third-party services to help with billing. Clinics and private practices can outsource or co-source their billing process either partially or entirely. Whichever route you take, be sure to ask about month-end closing services before you commit.
There’s also always the option of using specialized tools and software developed by consulting companies that help with medical billing and automate most of the tricky background tasks. For example, TempBill tools for medical billing can help your billing staff optimize the use of your clinic’s NextGen PM and EHR software and streamline the billing process.
Finding the Root Cause of Your Issues
While starting your clinic might’ve required never-ending problem solving, keeping it afloat is more about preventing mistakes and preparing for them. In the case of medical billing errors, following month-end closing procedures can help you recognize patterns and identify core issues with your billing process. Using this strategy, you can get to the root cause of your billing issues—human and system errors—and ensure you don’t keep making the same time-consuming mistakes.
By Taylor Wilman