Before we get going today with episode #2 of the What I Wish I Knew series, I want to let y’all know about a big deal that I’ve been working on over the last several months. It is a series of paperwork packets to hopefully meet most of the paperwork needs that you might have when you’re a testing psychologist in your practice. I’ve got a clinical packet, I’ve got an administrative packet, and I’ve got a psychometrist training packet. If you are interested at all in those, go check them out at thetestingpsychologist.com/paperwork.
I’ve got demographic forms, I’ve got report templates, I’ve got Administrative forms, and billing agreements, and then the psychometrist training packet is chock-full of information about how to bring on psychometrists and get them up to speed. Again, that’s thetestingpsychologist.com/paperwork.
This is [00:01:00] the last episode or last day when we release this episode when listeners will have exclusive access to that paperwork packet. So if you want a 20% discount on your entire purchase of paperwork, enter the code podcast during checkout and you’ll get that deal.
All right, onto our episode.
All right y’all, welcome back to episode #2 of the, what I wish I knew series. Last time we talked about how to be careful with insurance when you’re getting started. This time, I am going to continue that theme a little bit and talk about things that I wish I had known with regard to billing systems. I’ve talked a fair bit about billing and [00:02:00] collections on the podcast, but these are some things, just some quick tips, again, of things that I wish I had considered way back in the beginning and tried to put into place from the beginning. So let’s dive in.
One of the things that I wish I had done from the very beginning was take credit cards. This is something that took me quite a while to set up actually. I think that it was one of the contributing factors in building up quite an aging statement in my practice, especially with the testing services.
The reason I say that is because when we started taking a credit card and making it a matter of policy to have a credit card on file, that increased the visibility of credit cards, so to speak, in the practice. And it increased the likelihood that people would use their cards to pay for testing services, but it also meant that we had a credit card on [00:03:00] file and we could run those cards if people did not pay their bills, which was clearly stated in the disclosure statement and billing agreement. In the time that I did not take credit cards, it made it tough. If people chose not to pay their bills, I didn’t have any recourse to collect that money other than to wait and call them and send them statements and hope that they wrote checks.
Another thing about taking credit cards from the beginning in a testing practice is that the bills that we rack up for testing are quite high for a single service much of the time. I think it helps people to be able to know like, Hey, I could put this on a credit card, some or all of it if I needed to. I found that that has helped book clients as well.
Related to that, when we’re talking about collecting on the balances that you bill for, one of those pieces is that I wish I had hired a collections agency from the beginning [00:04:00] or contracted with a collections agency. I was scared for a long time about collections. I’d heard the horror stories about sending people to collections and how that can increase the likelihood of legal action or a complaint against your license. I think that is true. The data is there. It’s hard to get around that, that people will make complaints more frequently if you send them to collections, but the amount of money that I let go out the window that is just gone at this point was mind-boggling. It’s hard to even think about that at this point, but that was a mistake that I made way back when and I wish I hadn’t done it. I wish I had known.
Once we did hire a collections agency, it helped a lot. And it has not been a problem. People have been pretty responsive to the collections agency and I’ve [00:05:00] gotten no complaints so far. You want to look for a collections agency that specializes in mental health or medical billing. You want to talk to them about the process just to see if they can be accommodating and friendly while they’re also trying to collect your bills. I wish I’d hired a collections agency.
Another thing that I wish I had done a better job at was getting comfortable with the financial spiel and talking to people about fees from the very beginning. Not talking about fees from the very beginning leads to confusion, uncertainty, and ultimately unpaid bills. I found in a testing practice that folks want to be prepared for what they are going to owe for the testing.
So if you are wishy-washy or unsure or unclear when you’re communicating that data at the beginning of the process, like on the initial phone call, [00:06:00] then it can lead to trouble down the road. What that usually looks like is people being surprised by their outstanding balance and then you get into trouble with collecting and getting people to pay.
So we talk about that from the very beginning on the first phone call at this point and also check benefits through their insurance company if that’s relevant. And that seems to help a lot too. I’ve talked about that a lot in prior podcasts, so not going to go into a ton of detail there, but I wish I’d been more comfortable with laying out the financial arrangements from the very beginning.
The other thing that I wish that I had known and wished I’d done was to hire a billing company earlier than I did. I think part of this is getting comfortable with your finances. I talked back in the summer sprint series about the value of accounting. So I’m going to give a call back to that and reinforce that, that [00:07:00] something like QuickBooks can be super helpful in your accounting. And it can be super helpful in having you keep track of your finances and where you’re at.
Now a good EHR can also do this for you. So, looking at your EHR, making sure you know where your aging statements are, making sure you know how to calculate how much you’re collecting on of the time that you’re billing. All those are going to be helpful. And I think you have to be honest with yourself and be able to say that you’re willing to delegate to a billing company if you can’t turn around your collections yourself.
If you’re private pay, the industry standard is about 90% of collections. So you should be collecting about 90% of what you’re billing. That’s not including overhead or expenses or anything like that. That’s just you should be taking in 90% of the money that you are owed by other people for services.
If you are taking [00:08:00] insurance, that number drops to about 60% unless insurance companies reimburse very close to your out-of-pocket rate, which is usually not the case. So, that 60% is a reflection of how insurance companies tend to reimburse less than your out-of-pocket rate.
So those are two numbers to shoot for. You need to look at those numbers from month to month and know where you’re at. If you’re not doing great, hire a billing company. I’ve talked many times about how hiring a billing company was super helpful for us and it vastly increased our collections every month and I thought we were doing pretty well.
What else? One more tip. One thing that I wish I’d known. I wish I’d known that any gaps in your billing systems, fee collection process, phone spiel, and all of those things only become magnified if you [00:09:00] start to hire people.
Now that might make intuitive sense, but I had to be slapped in the face with it. So there are any number of ways to shore that up. I’m going to be talking in a later episode here in two episodes about systems, delegating, and defining your processes, but let me just say that if there’s any place you’re going to see it, billing is where you’re going to see it if you start to hire people and you don’t have those systems in place and that’s not good. If you’re not getting paid, then it’s hard to pay your employees, and that can be problematic.
All right. So just a few quick tips about things I wish I’d known about the billing process. I hope you found this helpful. We will be talking again in the next episode about, what are we talking about? I’m going to be talking about [00:10:00] how to delegate. I’m a big fan of delegating and talking about a billing company is a good segue to that, but there are going to be two days in between. Y’all can look forward to the next, what I wish I knew series #3 about delegating.
In the meantime, like I mentioned at the beginning, if you are interested in getting some paperwork to lay the groundwork for your practice, if you’re just starting out, or if you are at the place where you’re starting to hire folks, I have a psychometrist training packet. There are a few different packets to choose from. I think they could be helpful at any stage of your practice. So if that sounds interesting at all, you can go check it out at thetestingpsychologist.com/paperwork. Podcast listeners for today only, the last day of the discount, can get a discount at [00:11:00] checkout. I’m stumbling here. You can get a discount at checkout by entering the code podcast.
And yes, I fully realized people might be listening to this down the road and that’s totally okay. You can still use the code podcast that will get you 20% off, but this is the last day the podcast listeners have exclusive access to that and then I’m going to release it to my email list and the Facebook group.
Thanks y’all for listening. I will be talking to you next time about delegating, like I said. Take care. Have a good time in the meantime.
All right. Bye.