Don't Fear Change
The relationship has soured. Collections, service, and feedback are below expectation. You wonder: How much money have we lost? Can we get better service and information somewhere else? You and your physician partners realize that changes must be made for the well-being of the group. After lengthy discussion and evaluation of the pros and cons, you decide to take the painstaking steps to evaluate new coding and billing companies. Throughout the decision process, you wonder if changing companies is the correct decision. Simultaneously, your current coding and billing vendor discovers you are looking at other companies and begins the lobbying process to keep your business. They promise change, better service and eventually resort to the oldest tactic in the book, exaggeration of the truth. Fears are compounded after you are told that cash flow will suffer greatly if you make a change. Now you are confused and wonder if changing companies is really the best decision.
Does this scenario sound familiar? I would bet that many emergency physician groups have encountered this at some time. While I do not advocate change in business partners without thorough and careful evaluation, every group should have business partnerships founded on quality service rather than the fear of lost income due to change. Therefore, if change is needed due to poor performance, trust your instincts and move forward with change. The interview, research, and eventual selection of a new business partner will be lengthy; however, your future is dependent upon this process. After you make your careful choice and decide on a new business partner, the transition process is equally important.
A Successful Transition
First, don't be afraid of change. Move forward with confidence. Second, provide the previous business partner the contractually appropriate notice of intent to change/termination. A professional and amicable parting of the ways is very important as the previous company usually continues to work the accounts receivables they put on the books and thus they have a fair amount of control regarding your cash flow for the next few months. If the previous business partner becomes overly difficult and you believe they will not properly work your receivables, you may need to consider moving your receivables. This scenario is much more likely if you are paying your previous vendor on a per chart basis rather than a percentage of collections. Be aware that moving receivables can be very costly since the conversion process can be very difficult due to software differences. However, most billing companies will do an adequate job working your old receivables as they want the opportunity to win back your business and/or don't want the negative comments regarding their services in the market. Additionally, they are usually on a percentage of collections basis; therefore, their income on the outstanding accounts receivables depends on their performance.
Third, provide your new business partner fee schedule, lockbox, and provider number information, etc. as soon as possible. One of the myths about changing billing companies is that cash flow will die. This simply is not true. As long as you utilize the same corporate name and tax identification number and your providers are credentialed, cash flow should be fairly stable. The new vendor's cash flow will ramp up over a four-six month period as the old vendor's cash flow ramps down. When both billing vendors do their job correctly, most groups have very little or no cash flow problems. Cash flow problems are much more likely to occur if you are a new group without provider numbers, you change tax identification numbers, or you add new providers during the transition period.
Lastly, work closely with your new vendor. Don't expect miracles. Problems on the billing and provider end will always occur; however, the difference in billing companies is how quickly they identify and fix problems. Make certain you let your new vendor know what information and services are important to your group and when you expect to have this information. Most billing companies perform much better when the expectations are clearly stated. Transition can be difficult or smooth; however, you have control over much of this. Don't allow Fear of Change to paralyze your physician group. The financial viability of your group requires quality business partnerships.