In the healthcare industry, payment variance refers to the amount of difference between an expected payment amount due to be received and the actual amount paid into the account. Sometimes, this is called “underpayment.” However, in fact, underpayment is just one form of payment variance since this term defines a broad spectrum of payment scenarios that result when received payments differ from the expected sum. However, regardless of the type of payment variance, the fact remains that minimizing it is vital to reduce costs and to prevent shrinking margins. Convenient healthcare payment solutions play a vital role in minimizing payment variance and keeping cash flow consistent with the medical practice setting.
Scrutinizing the Causes
It is vital to scrutinize the causes of payment variances to determine how they can be rectified and avoided in the future. Identifying the root of the difference between the expected reimbursement and the actual amount received could point to an error in the fee schedule or term authored. The result of the scrutiny could reveal that, in fact, the incorrect amount was because of an error on the behalf of the payor. It is only by knowing why the variance occurred that the problem can be resolved.
Contract Management Systems
Contract Management Systems are a key tool in helping organizations to perform a what-if scenario when it comes to contract negotiations. By putting in place a tool to enable the net down of all patient receivables, healthcare organizations will find they are in a better position to forecast future patient revenues to set and prepare annual budgets. By outsourcing CMS services to a third-party company, medical practices will often find it easier to deal with the problem of identifying the causes of payment variance and to implement effective stopgaps to prevent the problem from reoccurring. Predictive analysis, as well as data-mining tools, help specialist teams to audit claims and categorize variances to focus on the ones that have a greater likelihood of extra yield and those that have strategic priority. Choosing a third party that has experience in working with a range of variance types and payors will ensure the best possible outcome for your practice.
Tools for Best Practice
Harnessing reliable and innovative healthcare payment solutions is the best way to ensure payment variance is kept to a minimum. Since healthcare is a primary source of debt in the ARM industry, it is important to streamline the process of healthcare collections and find ways of facilitating patient payments, so the possibilities of errors and variances are reduced as much as possible. By putting in place a cutting-edge system that allows for efficient and swift payments and efficient administration of invoicing, healthcare providers can guarantee their revenue and cash flow is maximized while patients can be left in no doubt as to the correct amount of payment owed and the dates on which payment is required. By giving patients the opportunity of making payment via several convenient methods, including HSA, FSA, ACH, and credit cards, systems, such as BillingTree’s healthcare collections solutions, guarantee that timely payments become the standard and not the exception. Cost-effective and completely compliant with HIPAA, SSAE-16, and PCI certification, you can depend on the expertise and experience of BillingTree.
When it comes to minimizing payment variance, implementing dependable and dynamic healthcare payment solutions is the best way forward. Ensuring that error margins are reduced exponentially, and billing processes are streamlined for greater efficiency, healthcare providers can have the peace of mind of knowing their cash flow will be consistent and their accounting departments will have less of a financial headache to deal with.