Long-term care facilities are pretty cool. They help people with compromised health live their best life. Running a long-term care (LTC) facility isn’t always cool, though, especially when it comes to financing. Special equipment and skilled staff aren’t cheap, making financial management a priority. But, not just any financial management will do.
Unique Financial Pressures in Long-Term Care
Long-term care covers everything from rehabilitation centers and assisted living facilities to palliative care and memory care centers. Even though their services are diverse they have at least one thing in common: They are regulated up the wazoo. This is to protect staff as much as patients but things like 24/7 care, medical supplies, and facility maintenance ratchet up costs like no one’s business.
It gets sticky when healthcare policies are fluid and you can’t count on consistent reimbursement rates or other sources of revenue. Just what are LTC facilities to do to manage increasing demand with diminishing returns?
Effective Accounts Receivable Management
Thank goodness for accounts receivable management software that helps facilities manage delayed payments and maintain consistent cash flow. It’s a cloud-based miracle that tracks accounts and identifies payment issues.
The follow up process on outstanding claims, especially from insurers and government programs, can be the kick in the pants necessary to secure reimbursements and avoid the drama of late payments.
Accounts receivable software designed for LTC facilities doesn’t just help implement payment policies and improve cash management. It also manages complex billing cycles which are part and parcel of long-term care.
Controlling High Overhead Costs Without Compromising Care
Do you know what happens when costs start to impact patient care? Patients leave and they tell everyone in their circle about the rubbish standard of care. Then they all avoid the facility like the plague. For all they know, it has the plague because standards are so low.
That’s bad business.
However, accounting software can do all sorts of things to manage – and save – costs. For instance, software can analyze supply costs and usage trends to optimize inventory levels. You can even negotiate bulk purchasing discounts to further reduce expenses.
Outsourcing non-essential services (housekeeping, maintenance) can also slice a chunk off operational costs
Payroll and Staffing Management for 24/7 Operations
LTC staff includes full-time, part-time, and shift-based roles. It’s all fun and games until payday. Then the fun really begins with payroll calculations. Healthcare specific accounting software includes time-tracking to maintain accurate staff records.
Overtime tracking and schedule management keep payroll costs in check while still meeting staffing regulations.
There is even “self-service” payroll software that enables staff to track their own hours. This cuts administrative burdens, which cuts admin costs. We’re all about cost-saving at this point.
Consistent payroll management ensures staff can rely on their pay days, which is great for staff satisfaction, which is great for patient care and your facility.
Ensuring Compliance in a Highly Regulated Industry
Long-term care facilities must adhere to strict healthcare regulations to ensure the safety and well-being of their residents, making compliance essential. Additionally, they are required to follow financial reporting regulations. While these may not carry the same immediate implications as healthcare standards, non-compliance—particularly with tax regulations—can result in significant penalties.
Healthcare regulations like HIPAA, Medicaid, and Medicare are designed to do more than just keep patients alive—they ensure that people age with dignity and receive the high-level care they deserve. They’re also key to maintaining a facility’s reputation—keeping it thriving, if you will. That’s why ongoing staff training is essential. The same goes for accounting and administrative teams—staying sharp reduces the risk of costly mistakes and keeps the compliance gods smiling.
Tracking Key Performance Indicators (KPIs) for Financial Health
Bodies in beds are an important KPI. Empty beds = empty bank accounts and that’s death for any facility. Compliance with healthcare regulations is one way to keep doors open, but so is expense management. Monitoring staff-to-patient ratios helps manage payroll expenses while ensuring quality care.
Accounting software, like Sage Intacct, is essential to track average reimbursement times, which provides insights into cash flow and accounts receivable. Sage’s automation ensures accuracy in financial management, which is what you want when lives are on the line.
Patient satisfaction scores (another KPI) might not have direct bearing on facilities’ finances, but they directly impact reputation – which fills beds, or not. And that definitely impacts the bottom line.
The Advantages of Outsourcing Accounting Services for Long-Term Care
Possibly the best way to cut costs is to outsource accounting services. Not only do you pay per service (as opposed to full salaries and benefits) but you don’t have to worry about regulatory compliance because outsourcing firms have that covered.
Want another benefit?
How about regular feedback on financial reports and expert insight into opportunities for improvement?
More?
Scalability is a biggie. Outsourced services have the flexibility to adjust to changing needs and can cater to facilities of any size.
More?
Managing complex revenue cycles and funding sources is child’s play to financial experts. And that will do for now.
Closing
What have we learned today? Well, running a long-term care facility is hard, but the right accounting software can simplify the financial management side of things. You take care of your patients (please) and outsource your accounting needs to specialists in medical healthcare accounting services.
Class dismissed.
