Improve your production without working more

Lucien W. Roberts, III, MHA, FACMPE

Every hour of your day is created equal; what you do with each hour creates your bottom line.

Your time is a limiting factor.Optimizing your profit requires you to know what your profit per unit of time – here, we use a minute – for the CPT codes you use most at a payor level.

Here’s a simple way to move towards optimizing your time.

Ask your manager to provide a list of the 10 CPT codes you billed for the 12 months ending Sept. 30, providing a frequency for each. Ask your manager to provide the total payments you received for these services; there is an inherent lag time in our billing/payment cycle, but most payments from payors and patients should have been received at the time of this article’s publication. Now, write down your average time associated with each of these CPT codes, inclusive of the visit, the records review, the documentation. Every minute of your time.

Here's an example to follow:

At a glance, you can see what CPT codes produce the most income per unit of time. It is a solid first step to understanding how to best allocate your billable time.

Take this exercise one step further by asking your manager to provide the frequency you provided each of these codes for five to 10 payors and the total payments for such; keep in mind that a single insurance company usually has different fee schedules for different insurance products (e.g., PPO or HMO). Now you can apply your time for each CPT code to determine your revenue per unit of time per payor. It might look something like this:

Wow, though each unit of your time is the same, what you are paid varies big time. You’ve always known or suspected such, but seeing it on paper with your own numbers takes it to another level. Seeing a patient with Blueberry insurance rather than a Grape PPO patient reduces your revenue by 32+%. Too many Blueberries would be really bad for your bottom line.

It takes discipline and smart scheduling to adjust your CPT frequency to optimize revenue. It takes ongoing discipline and really smart scheduling to adjust your payor mix. Both, however, are achievable over the course of several months.

Another concurrent step can be to negotiate better payor agreements. There just aren’t enough doctors to see all the patients who need to be seen; demand is outpacing supply. Appointment backlogs are getting longer and longer.Ask your lower-paying payors for better rates. Offer your rationale, noting they pay less than their competitors.

If they say no, you have a choice.Keep going as you are, but at a minimum use discipline and scheduling to shift your payor mix. Or – and it isn’t as scary as it sounds – terminate your agreement. During my career, I have had to “terminate to negotiate” several times. I am honest in my reasons for doing so.

Because patients are unwitting pawns in this game of chicken, I ask you embrace the 90/45/365 formula to minimize care disruption. I have never come up with a cool name for the 90/45/365, so here it is:

• Give the payor 90 days written notice of your intent to terminate.
• Let the payor know they have 45 of those 90 days to reach an agreement.
• Let the payor know that if an agreement is not reached by day 45, you will be out of their network for a minimum of 365 days.You will not come back to the table, period.
• By making the negotiation period half of the 90-day notice, you still have 45 days to notify patients.The payor had their chance, and extending negotiations until late in the 90-day notice period is simply unfair to your patients.

The bottom line to your bottom line isn’t working harder or working smarter. It’s taking less than an hour to pull together some basic information and doing some simple math. It’s allocating your time to the work – and the patients – who generate the most per unit of time. Yes, it takes discipline, and yes, your schedulers will gripe about new and confusing appointment templates. It will, though, become habit for both you and them.

Doctor Jones knows her business; know yours, too.

Lucien W. Roberts, III, MHA, FACMPE is a veteran contributor for Physicians Practice.He can be reached at lroberts@theinfusionsolution.com.