Question
Better You's patients are: 50% commercial Insurance 35% Medicare 5% Medicaid 10% self payment/ out of pocket. Self pay patients pay at the time of
Better You's patients are: 50% commercial Insurance 35% Medicare 5% Medicaid 10% self payment/ out of pocket. Self pay patients pay at the time of service (in 0 days). Commercial Insurance pays in 30 days. Medicare pays in 60 days and Medicaid pays in 100 days. Better You's annual sales are $3,000,000 and occur pretty evenly throughout the year. Assume a 360 day year. Better You's carry cost of Accounts Receivable is 8%.
Better You is considering a process change that would change their average collection period to 31 days. This process change would cost $10,000 per year to implement.
What is the benefit of this change, rounded to the whole dollar? Do you implement the change?
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