Unfortunately the AAPS member is making the same mistake I have seen many others make. From a pure cash flow perspective it is correct to say that longer payment cycles will only create a temporary dip in revenue. Once you get beyond the payment cycle time you will have the same amount of cash coming in each day if you claims are paid in 30 days or 120 days.
However, this does not consider the value of the working capital that your practice has tied up. Let's just say for arguments sake that your average daily revenue is $5,000 per day. If your payment cycle is 30 days then you have $150,000 in working capital tied up in your accounts receivable. If your payment cycle is 120 days, then you have $600,000 in working capital tied up in your accounts receivable. While the difference will not be visible on a cash flow or income statement, it will certainly be apparent on a balance sheet. If you can reduce your payment cycle from 120 days to 30 days, your practice will realize an additional $450,000 in freed up working capital which you can then convert to other assets or retained earnings. $450,000 will pay for a lot of computers and software for filing claims electronically, and even leave you some money left over for HIPAA compliance. Noel Chang -- Open WebMail Project (http://openwebmail.org) ---------- Original Message ----------- From: "fwdanby" <[EMAIL PROTECTED]> To: "Privacy" <[EMAIL PROTECTED]> Sent: Tue, 24 Sep 2002 06:43:30 -0400 Subject: Re: WEDI/SNIP - Non-compliance model > Tim McGuinness wrote re Non-compliance model > > "However, it occurs to me that we are seeing a significant issue > emerge that requires addressing: > > What are the actual requirements for legal non-participation in > HIPAA? From my perspective, I can not see how any modern practice > can not engage in some form of arguably covered transactions which > trigger HIPAA covered entity or business associate status. Even if > they sub-contract the transactions services, they're still a covered > entity per CMS/OCR. And, as I have stated before, I think the > Privacy and Security Rules are generally a good steps forward. > > So, exactly what does a business have to give up to not be covered under > HIPAA? What I am asking is: should SNIP develop a document that clearly > states what these requirements are? Until such a document exists, business > people can not objectively evaluate non-applicability from non-compliance. > Nor can they look at the real loss of business that I believe such moves > would entail. > > I, for one, would be very interested in participating is such a > project. I, like many, have found it difficult to express to > potential covered entities what their options are in this regard. > So I believe that a non-applicability implementation guide is > ultimately the only way to resolve this. Or do we simply leave it > up to OCR enforcement and case law to determine this? > > *** You could start here...................................................... > > The following is from Andy Schlafly, Esq., AAPS General Counsel. > > Thank you for the latest CMA (California Med Assoc) advisory on > HIPAA. Due to AAPS, CMA is finally recognizing that physicians can > avoid HIPAA. The CMA is still trying to sell its HIPAA materials, > though, which probably distorts its thinking. > > CMA restates the argument that eschewing electronic claims will > cause delays in payment. As an AAPS member pointed out, however, > that delay is just a one-time lapse at the beginning. There will > not be any ongoing loss in monthly revenue. > > Andy Schlafly, Esq. 908-719-8608 > AAPS General Counsel > A Voice for Private Physicians Since 1943 > > Perhaps a phone call is in order? > Bill Danby > > ********************************************************************** To be removed from this list, go to: http://snip.wedi.org/unsubscribe.cfm? list=privacy and enter your email address. > > The WEDI SNIP listserv to which you are subscribed is not moderated. > The discussions on this listserv therefore represent the views of > the individual participants, and do not necessarily represent the > views of the WEDI Board of Directors nor WEDI SNIP. If you wish to > receive an official opinion, post your question to the WEDI SNIP > Issues Database at http://snip.wedi.org/tracking/. Posting of > advertisements or other commercial use of this listserv is > specifically prohibited. ------- End of Original Message ------- ********************************************************************** To be removed from this list, go to: http://snip.wedi.org/unsubscribe.cfm?list=privacy and enter your email address. The WEDI SNIP listserv to which you are subscribed is not moderated. The discussions on this listserv therefore represent the views of the individual participants, and do not necessarily represent the views of the WEDI Board of Directors nor WEDI SNIP. If you wish to receive an official opinion, post your question to the WEDI SNIP Issues Database at http://snip.wedi.org/tracking/. Posting of advertisements or other commercial use of this listserv is specifically prohibited.
