We already know that the ICD-10 transition is going to be disruptive, but the worst news is that even providers who do everything right are going to experience cash flow issues.
Earlier this year, Medical Practice Insider published an article drilling down into the financial implications of the changeover.
The amount of cash reserves your practice will need depends on how well you’ve prepared and your payer mix. The article gives the following recommendations, and we only mildly disagree with them in terms of the severity of the prognosis.
- Reserve enough money to cover medical supplies, payroll, and rent for three to six months. If not, you may need a larger reserve.
- Establish a line of credit with your bank in advance to avoid having to go to them for credit last minute or when you’re already in arrears on bills.
- Ask the payers you work with the most whether or not they have a contingency plan in the event of a major disruption.
Small practices will be especially affected by the financial implications of the transition, the article points out. They tend to have smaller cash reserves and can ill afford to lose staff members—especially long-term, loyal ones—over a couple of months worth of payroll.
Last Updated on December 4, 2020