It isn’t always a major problem that causes a medical practice to lose money. Sometimes a steady drip of small losses — a little bit here, a little bit there — adds up to a big problem. Of course, you need to empower your staff to work on accounts receivable and to handle billing issues. But physicians often lose track of what’s actually going on in their medical practices’ business operations — and when that happens, problems can occur.
Before taking any major steps, consider these tips for staying on top of your business processes:
- Meet regularly with your staff to review reports.
- Have financial benchmarks.
- Compare what’s happening this year to what happened last year.
- Determine what’s normal in other practices.
- Audit patient charts regularly.
- Look at 10 charts a month (per provider) to ensure they’re entered appropriately.
You also may want to hire a professional billing service to occasionally spend a day auditing your charts and receivables.
5 Steps to Take
Even when you engage in the best possible business practices, losses might still occur. Here are five plugs for revenue leakage:
- Ask for your money. If a patient owes a co-pay, ask for it. Collect as much up front as is feasible. Create processes and procedures that make it easy to collect fees owed, such as accepting cash, checks and credit cards. You can and should make exceptions, but the bottom line is that a medical practice is a business. Make every effort to ensure no one leaves the office without paying what’s owed — whether it’s a bill or a co-pay.
- Educate patients on estimated expenses. When discussing an expensive and complicated procedure, such as a surgery, develop a financial agreement ahead of time so you can educate the patient on the procedure’s cost. Put it in writing and make sure the patient agrees to it by signing it. Both the practice and the patient should receive a copy.
- Audit your computer systems. Computer systems are remarkably reliable, but not necessarily 100%. It’s imperative that you understand what your computer system is actually doing. Sometimes, practice management software features can cause inadvertent problems. For example, one type of software required someone to hit “print claim” after a transaction was saved. The claim was then sent electronically. But if staff failed to hit the “print claim” button, the claim wasn’t sent. Instead, it showed up as an outstanding balance, even though the insurance company had never received it. Clearly, staff needs to be trained in the correct use of your practice management software.
- Offer more services. Offer medically appropriate services that could bring in additional revenue. If a patient comes in with a specific ailment, this is a potential opportunity to offer a more thorough checkup, resulting in more targeted services and care. In addition to creating better results and more comprehensive care for the patient, it will generate more revenue.
- Stay in touch with insurers. As most physicians know, filing an insurance claim and getting exactly what you expect to receive is rare. Update your insurer contracts on a regular basis. Review your price lists and send them to insurance companies. From time to time, insurance carriers change their reimbursements, and — even more rarely — increase their reimbursements. Appeal claims and get to know your state Medicare liaison. Join your state’s specialty medical association to pool resources when dealing with insurers.
The Sixth Step
The worst revenue loss often is embezzlement. After that, it’s losing patients. By keeping your patients happy and satisfied, you’ll avoid a major source of revenue leakage.
Contact a member of your service team for more information.
Cohen & Company is not rendering legal, accounting or other professional advice. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts and circumstances.