Executive summary
A bank is much more than a place to deposit cash and process checks. Banks can offer a range of services and expertise to take the bumps and headaches out of day-to-day financial transactions. A bank’s services also can help your medical practice realize its most important business and financial objectives, from minor remodeling to a new facility.
Key considerations in selecting a bank should include safety, convenience and service.
Contents
Research safety . . . 2 Expect a personal touch . . . 2 Capture services
that count . . . 3 Revenue cycle . . . 3 Financing . . . 5
How to Choose the Best Bank
for Your Medical Practice
Research safety
The Federal Deposit Insurance Corporation (FDIC) protects depositors from losing their money if their bank should fail, but the coverage only applies to FDIC-insured banks and savings associations. Check to see if a bank or savings and loan has this important insurance at www.fdic.gov. This website also has the latest updates on the insurance coverage programs.
FDIC insurance per depositor per insured bank covers traditional types of bank accounts such as savings, checking, certificate of deposit and money market. Some accounts, such as IRAs, could have higher coverage. The insurance doesn’t cover money held in mutual funds, annuities and other types of investments that banks may offer.
To protect your medical practice’s assets, safety and security in today’s economic times must be of utmost importance.
Expect a personal touch
Your medical practice offers a personal service where courtesy and respect are important. The same goes for banks. You should expect the bank’s employees to be professional, friendly and responsive to your needs. Look for a bank that offers a client manager to understand and manage your practice’s needs.
A bank should know something about your professional needs, which is why a bank should have client managers who are healthcare client managers. These specialists should understand and visit your practice to discuss loans, lines of credit and other services. Banks that offer this level of personal service are also happy to send a representative to your practice for an introductory visit, even if you are not a customer.
Your relationship with the specialist will be among your practice’s most critical business relationships. Talk to the client manager to see if the bank shares your business philosophy. You’ll want to know if they offer services and expertise for practices like yours.
References count, too. Ask your accountant and financial advisors which banks they like to work with. Look for a bank that has experience dealing with medical practices as customers. Knowledge of the medical practice industry improves the bank’s ability to help you and your practice.
With the uncertainties in today’s financial climate and the ever-present risk of fraud, develop a relationship with a bank that proactively monitors its clients’ accounts. To protect your practice from an unexpected event, you want to be informed of any activity in your account — checking, savings, credit line, etc. — that deviates from your practice’s ordinary banking patterns.
Capture services that count
Take time to compare interest rates and service charges. Some banks offer an à la carte menu of services, while others bundle many services under one charge. Picking through these charges may take a little time, but it’s worth it to find out if you are paying for services you’ll never use or getting nickel-and-dimed by service fees.
Revenue cycle
A medical practice’s revenue cycle is more complex than most businesses, so look for a bank with services to help with this important job. Even if you’ve built outstanding internal systems and financial controls and have a well-trained staff, the following bank products and services can greatly enhance your revenue cycle:
Remote deposit
The shift of financial responsibility from payers and employers to patients means your staff collects more cash, checks and credit card payments at the time of service. The increased flow of cash brings new challenges. To avoid the possibility of these funds getting lost or delayed or falling into the wrong hands, use remote deposit to transfer payments electronically upon receipt.
Lockbox
As labor costs increase, so too does your cost to collect from patients and insurance companies. Processing payments from patients and insurance companies consumes precious staff resources; use a lockbox to get payments in the bank faster and to reduce the time staff spends making deposits at the bank. A lockbox service can reduce collection costs significantly.
Automated claims management
Managing separate systems for your claims management and payment settlements can be expensive and time consuming. Look for a bank that consolidates third-party and patient payments into a single electronic channel so you can have faster access to funds, use less paper and lower your administrative costs.
Online bill payment
Slash expensive statement processing costs — typically $1,000 per annum per physician — by extending online bill payment options to patients. Online bill payment also helps manage payment plans for patients who want to pay off large bills in monthly increments. Plus, it offers a valuable, time-saving service that demonstrates your technical savvy to patients.
Credit safeguards
Look for a bank that can also help you securely store credit card numbers. This can allow you to more easily charge patients who don’t show up for appointments, as well as collect payments from those who choose the convenience of automatic payment processing.
Direct deposit
Your payroll and payables functions can be faster and smoother if your bank offers direct deposit services. Direct deposit benefits the practice by withdrawing funds on the day you determine, thus allowing the practice to have a more accurate picture of funds available. Employees have the advantage of knowing that their money is in the bank and there is no need to make an extra trip for a deposit.
Financing options
Some patients may need to finance their medical services, but developing individual payment plans can be a resource-intensive exercise. Look for a bank that will offer financing of healthcare services directly to patients.
Flexible service options
Just as the age of the Internet has led patients to expect quick access to healthcare, you’ll want a bank that allows your practice to initiate certain transactions at any time, day or night. You shouldn’t have to wait until the next workday to get a copy of a check, transfer money between accounts or view your account balances. Look for a bank that allows you to access information and services when it’s convenient for you. While secure Internet access is the fastest, it’s helpful to have alternative routes to reach your bank, such as a healthcare specialist to visit your office or expanded hours for telephone- and fax-based access, as well as in-person access at a branch office.
These bank products and services can enhance your ability to collect all you deserve — in a cost-effective manner.
“ Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., all of which are registered broker‑dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. ©2013 Bank of America Corporation 09‑13‑0312.E
Financing
Banks can be ready sources of affordable capital, whether your practice is just starting out or looking to expand. Working with a banker who specializes in the healthcare industry is essential to build knowledge of the financial services that can meet your practice’s unique needs.
If you’re ready to hang your shingle on a new practice but need money to get started, your bank can be just the place to go. As your medical practice grows, you may be in a position to expand your facility. Whether you’re buying a new building — or just renovating, you’ll need a bank that is responsive to your real estate needs. If you wish to enhance your practice to include new equipment, information systems or other capital purchases, a bank loan or bank-financed leasing arrangement can be a more affordable alternative to vendor-based leasing or vendor financing.
Your practice’s financial needs can change quickly. If collections are down but partner draws are due, it’s important to have the ability to quickly access needed funds. An available line of credit can be crucial source of capital to draw upon in emergency situations.
Other questions to consider asking when looking for a bank are:
yDoes it take part in small business administration loan programs or other government-guaranteed loans?
yWhat are the minimum balances and fees for small business accounts?
yWhat are the interest rates and qualification criteria for various levels of credit and account services?
A positive relationship with your bank and its associates can help mitigate the challenges of handling thousands of small financial transactions by patients and insurance companies, as well as take on the larger strategic issues of growth and financial management.
To learn more about Bank of America Merrill Lynch healthcare financial solutions, please visit bankofamerica.com/healthcare.
