How to Know Where Your Money From Insurance Goes
There are fewer things more important than knowing where your money goes from insurance in private practice. Knowing where your money goes is critically important for a variety of business processes. Some practitioners in private practice have a hard time balancing the complexity of business processes in private practice so we would like to help provide some direction and clarity so that you can run your private practice in an efficient manner.
In order to understand where your money goes in private practice from insurance you first have to understand how the insurance company is directed to send money. When you credentialed with insurance part of the application process was writing down banking information so that the insurance company knows where to send money.
This concept is easy enough to understand but in practicality can pose some real challenges. First, if your practice is a group practice and the clinicians in your group practice are operating as individual practices under the umbrella of your group, those clinicians may have the insurance company sending money to their individual bank accounts. If you are a group practice and you have a business bank account, the insurance company or companies should be sending money to your business bank account.
A common pitfall of therapists in private practice is starting their practice with the insurance company sending money to their personal bank account and as their practice grows they have to switch where the money goes to a business bank account. We would recommend starting your private practice with a business bank account that is separate from your personal bank account. The reason why we would recommend this is to avoid any mistakes on the part of the insurance company. Insurance companies are not perfect and they do make mistakes and take a long time to process paperwork. It would be better to set things up for growth long-term rather than to have to make a quick short term change that could cause problems long-term.
If you have been in private practice for a long time and you are credentialed with insurance companies, then we would recommend auditing your records frequently to make sure that you are being paid properly by the insurance company. You can do so by checking the 1099 that the insurance company sends you against what you have deposited. Sometimes insurance companies write checks or send EFT deposits, and errors can occur. We recommend auditing your records or asking your accountant to audit your records to make sure that the insurance company is paying what they should.
Not all insurance companies require direct deposit. Some insurance companies give you the option of receiving a check or some other kind of payment. Either way we recommend setting your practice up so that insurance companies send money where you would like it to go. This does not preclude the insurance company from making mistakes. Therefore we recommend that you check your practice’s records and payments on a consistent basis so that you can be sure you are being paid what you should be.
Ultimately where insurance companies send money depends on how things were set up when you were credentialed. If there has been a change to where money should go by insurance then you would have to reach out to the insurance company to make that change. Most likely you’re going to have to fill out a form that directs money to the correct location. Anytime you’re dealing with insurance companies we recommend that you double and triple check to make sure of accuracy in the process.
This work can be tedious and can take up a lot of your time so we also recommend that you outsource the completion of this task to a professional that you trust. We also recommend that you check in with this professional on a regular basis to make sure that the processes are being carried out in a timely fashion.
If you have any questions about this process or are unsure about where your money is going from insurance, please reach out and we would be happy to help with that process.