You might notice seasonality in patient payments at your healthcare practice throughout the year. These predictable fluctuations significantly impact revenue and financial planning. To stay ahead of industry trends, you’ll want to understand these patterns and the factors that influence them. Continue reading to learn more about seasonality and healthcare revenue cycles, what seasonality means for your practice and how to leverage technology to navigate the fluctuations effectively.  

What Is Seasonality in Healthcare?

Seasonality in healthcare payments refers to the predictable fluctuations in patient payment patterns at specific times of the year. These seasonal variations can be influenced by a range of factors, from insurance cycles and tax refunds to holidays and school calendars. Some of the trends in healthcare seasonality experts have noticed include:

• Q1: The average days in accounts receivable are highest in January at 51.3 days. Denials are also 7.8% higher and outpatient revenue per case is 4% lower than the annual average.
• Q2: April and June show stable net revenue and volume, while final denials and bad debt grow materially in June. 
• Q3: Outpatient volume falls 6.4% from August to September, though gross revenue generally improves.
• Q4: Accounts receivable days are at their lowest from October through December at 1.6% below the yearly average. Inpatient net revenue per case, however, comes in 8.9% higher than the annual average.

As a result of these fluctuations, an increasing number of healthcare organizations are moving their revenue cycle management (RCM) to medical billing outsourcing. Technological solutions like end-to-end platforms can take care of registration, insurance eligibility verification, claim submission and payment collection — making it easier to navigate seasonality, optimize resource use and maximize reimbursement. 

Understanding Seasonal Trends in Patient Payments

Fluctuations in revenue cycle performances occur for several reasons, including insurance cycles, tax refund season, holiday seasons and school calendars. It’s important to understand the quarterly trends to optimize your RCM:

January-March

Projections show that the average days in accounts receivable and initial denials are at their highest in January. At the beginning of the year, patients might have new deductibles to meet, which could result in higher out-of-pocket costs and potentially delayed payments. This can create a temporary dip in revenue for practices since patients might defer their non-urgent medical visits until they have met their deductibles. 

Understanding this fluctuation can help you adjust your practice’s billing strategies, such as offering flexible payment plans and early payment discounts to encourage timely payments at the beginning of the year. 

April-June

In the spring, patients might use tax refunds to pay off medical bills. That’s likely why March is the top-paying month for most healthcare practices. This period can be an opportunity for your practice to implement strategic billing campaigns, such as sending digital reminders to patients about outstanding balances and offering incentives for lump-sum payments.

You might also leverage tax season to promote elective procedures or services that patients might be more willing to consider when they have extra funds available. Following March, net revenue and volumes are typically stable, but one projection showed that final denials and bad debt transfers increased materially in June. 

July-September

The third quarter typically sees a rise in families scheduling elective procedures due to summer vacation. Patient volume and revenue also rise as the school year approaches, with parents scheduling school physicals, immunizations and sports physicals. 

Understanding these trends can help you manage your scheduling more effectively and ensure adequate staffing during peak periods. Additionally, you might coordinate with patients to set up pre-payment plans or deposits for scheduled procedures, keeping steady revenue during these busy times.

October-December

While outpatient and inpatient net revenue typically trend upward in the fourth quarter, holiday spending increases can lead to delayed medical payments as patients prioritize other expenses. 

Your practice can anticipate this by enhancing patient engagement and communicating about payment options and deadlines. You might also offer holiday-related promotions or flexible financing options to mitigate the impact of delayed payments. Planning for reduced revenue during this time is critical to keep financially stable.

Implications for Healthcare Practices 

Seasonality in patient payments can make revenue cycle management more challenging for healthcare practices. However, by understanding the trends, you can better predict your revenue and enhance planning during lean periods. Challenges can include:

• Financial planning: Payments can be delayed due to priorities and seasonal expenses, highlighting the need for flexible payment plans or early payment incentives.
• Patient communication: Practices will need to enhance patient communication during peak seasons. This might involve sending reminders for school physicals or promoting preventive care during travel. 
• Marketing strategies: You’ll need targeted marketing campaigns that address specific health concerns relevant to particular periods, such as promoting allergy treatments. 
• Resource allocation: Practices must anticipate busy seasons to adjust staffing levels appropriately for higher patient volumes.

Preparing for Seasonality in Healthcare 

You can leverage technology in various ways to manage seasonality and maintain stable revenue. Overall, effective patient communication is crucial to increasing satisfaction and driving revenue. After all, highly involved patients are more likely to keep appointments and pay the bills for your services. 

Stay ahead of the industry by adopting the following solutions: 

Data Collection and Analysis

Be sure to gather historical payment data to identify the seasonal trends impacting your practice’s revenue. Using real-time analytics software can help spot trends and forecast future payment patterns. You’ll gain insights into your practice that you can use to increase revenue and enhance the patient experience.

Technology Integration

Automated payment systems, patient portals and mobile payment solutions are all effective ways to manage seasonality at your practice. A digital platform allows patients to view bills, set up payment plans and make payments in one convenient place, improving your collection rates. 

Additionally, automated billing systems ensure timely invoicing and reminders, while mobile payment options allow patients to pay their bills anytime, anywhere.

Staff Training

You’ll need to train your staff on using new technologies and understanding seasonal trends. You should also encourage proactive communication with patients regarding their payment plans and options. 

Contact Millennia for Effective Revenue Cycle Management

Understanding seasonality in patient payments and leveraging technology can help you make the right changes to enhance your practice’s financial stability and improve patient satisfaction. Staying informed about industry trends and adopting innovative solutions will position your practice ahead of the curve, keeping operations efficient and profitable throughout the year. 

Millennia simplifies every step of the revenue management cycle. With combined advanced technologies and features, our end-to-end platform can streamline patient payments, enhance communication and help your practice capture more revenue. The Millennia Patient Payment Solution offers engagement intelligence, concierge services and more to drive patient satisfaction and help you effectively manage seasonality. 

To learn more, request a free consultation with one of our experts today.

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