Cash flow issues are among the most common problems for mental health practices, and they can crop up at any time. Most practices have, at some point, faced the suspense of not being sure they can make payroll and pay all their bills the next week. What if you were able to predict a likely cash gap, though? That would allow you to be prepared and avoid worry.
With the ICD-10 transition, many mental health care practices can expect to experience a cash gap in October of 2014 because of productivity losses. When your staff needs to take more time to process claims while they double and triple check for ICD-10 codes, that means payment could be slower because they can’t get through as many claims as required for your business model.
Anticipating a cash gap and preventing reductions in revenue as much as possible can help make the ICD-10 transition easier and ensure that your mental health care practice has the revenue and cash flow you need.
Prevention through education
The first step is increasing productivity before the ICD-10 changes are implemented. Since we know the change is coming and there is quite a bit of lead time, it’s very realistic to plan to have everyone up to speed before the change is required. Unfortunately, it’s easy for a busy practice to put training off until it’s absolutely necessary.
Take the time now to get your staff up on ICD-10 codes and you’ll be able to space the training out over time. That can prevent weeks worth of struggles later. The better prepared your staff is for ICD-10, the less cash gap you’ll experience.
Preparations for a cash gap
With a small practice, it can be hard to stockpile funds, but with less than a year till the ICD-10 transition, it’s time to make sure you have money in the bank to pay the bills if things slow down. Cut a few corners and let some reserves pile up between now and next October.
At the same time, it makes sense to have a contingency plan. Think about how you can manage a reduction in cash flow and what you’ll do to take care of business if claims slow down. Having a plan makes it easier even if you haven’t been able to amass much in the way of cash reserves.
Make a Backup Plan
Outsourcing claims might be the key to getting through a transition. You can keep your staff working towards learning ICD-10 codes and maximizing productivity for the first few weeks and use outsourcing to make sure claims are done in a timely fashion. It’s an investment in your medical practice to keep cash flowing while your staff learns the new ICD-10 codes — and you might find, as many practices have, that outsourcing actually makes financial sense for your practice for the long term.
Once you decide what steps to take to prevent and manage cash gaps during the ICD-10 transition, follow through and keep a level head. Running a business can be emotional when you’re invested in the success of the business, but don’t let emotions get in the way of making the decisions that will keep your practice successful.