Where the money leaks out, with Taya Gordon

The software bill is the tell. Practices that once ran on two or three systems are now paying for 15, while supply costs climb, staff get harder to hire and payers hold reimbursement flat. The gap between what a practice spends and what it collects has widened enough that finding the leaks is no longer a once-a-year exercise.

Taya Gordon, CEO of Atlas and Perpetual Healthcare, sat down with Physicians Practice to talk through where that money actually disappears, how to benchmark expenses when you have never done it before, and why the staffing line is usually the wrong place to start cutting. The conversation has been edited for length and clarity.

Her list of leak points is not exotic. Coordination of benefits missed at the front desk. Patient responsibility not collected. Services delivered and never documented. Denials nobody appeals. Claims aging in accounts receivable. And a shredding contract signed in the paper era that still bills a monthly minimum for bins that never fill up.

Financial pressure on practices is not new. Why does it feel more urgent now?

Taya Gordon: It feels more urgent now because the disparity between the costs we're putting out and the reimbursement we're getting in has gotten so much larger. In addition, we have staff shortages, we have difficulty negotiating with payers for higher reimbursement, we have medical costs rising, and our technology costs have just skyrocketed. The tech stacks within our organizations have gone from maybe two or three main software systems to upwards of 15. So we're just seeing a lot more demand on our practices.

When you walk into a practice and start digging around, where do you find money leaking out that nobody has noticed?

Gordon: There are front desk practices with data entry that cause revenue leakage because we're not capturing coordination of benefits correctly, or we're not capturing patient responsibilities. We have missed services happening in documentation, where providers see patients for a test that can be done in the clinic and forget to document it. We have denials that aren't appealed. We have down coding happening. There are a ton of places where I find leakage typically.

Which of those do you see most often?

Gordon: Most often, probably unmanaged denials. That would probably be the one I see the most, or things just sitting in AR.

For an administrator who has never benchmarked their expenses, what is the very first step?

Gordon: If you've never benchmarked it before, you need to go do some digging and some analytics. You need to understand where you're sitting right now before you can start making any type of change. For example, if you have never benchmarked your medical supply cost, it's the time to pull out the invoices. See what you've been paying over the last 12 months. See what you've been ordering. See if that's optimized. Look at what your alternatives are. Try to look at different GPO contracts. But if you are not starting from an evidence-based perspective, you're at a high risk of going off into the wrong direction. So first and foremost, go dig into your own historical data.

MGMA, AAFP, CMS, commercial tools. How do you know which sources to trust, and whether you are actually comparing apples to apples?

Gordon: The challenge with trying to make sure it is a validated resource is that there are so many organizations online right now claiming to be a validated resource. When you're looking for organizations that genuinely have the data you're looking for in terms of validation, you should look at associations like MGMA, HFMA and AAFP, the specialty organizations as well, or your medical societies. Groups that have their nose to the ground but have been established long enough to have the type of historical data that gives benchmarks that are actually worth their weight.

But comparing apples to apples with your organization means being really thoughtful and being really transparent with yourself about what your organization is and looks like. Where is it located? What type of community? How big is it? What services do you provide? What does your payer mix look like? All of those things are going to contribute to what you look like as a whole, so that you can identify what kind of apple you are to compare to the other apples.

Staffing is the biggest line item in most budgets, and also where cuts can do real damage. How do you help leaders walk that line?

Gordon: I love this question, because it comes into alignment for me with the data. Look at your staffing ratios. How many employees do you have? What does that look like from admin to provider ratios, or clinical support staff? Pull down your validated resources and look at the numbers. Are you right sized?

A lot of groups I come into say staffing is the highest cost, we need to get rid of staffing. Then we do an analysis and find out they're already vastly understaffed, and the reason they don't have more revenue is because the staff is burnt out and they're not able to get to all of the tasks. So you have to dig into the data. You have to see if you're right sized for your organization, and you also need to evaluate if your processes and your technologies are supporting you in the way you need them to before you just start eliminating people.

Everyone talks about supplies and IT. What is a cost hiding in waste disposal, leases or facility maintenance that practices tend to miss?

Gordon: The number one for me has to do with shredding services. As we shifted from paper to electronic, so many people kept their shredding services on the same rotation. If you weren't paying by weight, or you're paying a monthly minimum fee and you're not really dumping a lot into the shredder bin anymore because you're putting everything online, that's one place I see people just have these monthly contracts they've had since '92, and we're not filling those bins up anymore. So you shouldn't be paying for that. It's one of those that hides in the background. It's not a lot of money every month, but it adds up pretty quickly.

How do you make sure cost-cutting strategies aren't creating compliance risks or hurting the patient experience?

Gordon: You have to have a protocol in place for reviewing those things before you take that action. If you're making any large change that has systemic implications to your organization, you should always ask yourself: Is this going to create a compliance risk? Is this going to hurt the patient experience? Is this going to hurt our provider and our staff experience? Is this going to hurt our ability to collect revenue? That is something you should ask anytime you're making a big change.

For example, I see a lot of groups go out and think, I need to shift what our medical supply company is, because this is costing us way too much money. Well, before you do that, have you done your research? I worked with a group last year that made a huge change, shifted all of their medical supplies to go with a different group. That group historically had a challenge procuring a very specific item they needed for surgery. It was always back ordered, and now that they weren't under a special agreement with their previous supplier, that was costing them more. They used it so heavily that they ended up doing a disservice to themselves in the long run. You have to dig into those things ahead of time, really make sure you're looking holistically and not just making a decision based on your gut, or based on a whim, or based on a really cool salesperson.

A one-time audit is one thing, but you're talking about building a sustainable framework. What does that look like, and how do you keep the momentum going?

Gordon: So many groups, particularly in health care, are inundated. They're inundated with regulation, with constant need from patients and from staff, with technology changes and all these cybersecurity risks. It's so overwhelming that if you don't build in something intentional, you just end up reacting to everything that happens.

I highly recommend doing a holistic review of the organization. Develop a 90-day plan for improvement, and at the end of that, develop how you're going to continuously improve. Keep that strategy. If you've blocked off time every month to look at your 90-day plan, now that block of time becomes continuous improvement. What else can we change? Of what we changed, how did it do? That is something you have to do on an ongoing basis.

It's not like, okay, we looked once a year, now we're done, we're good. Or we did that a few years ago, so I don't think we need to for a couple more years. This is something you look at every single month. How can we do better than we did last month? How can we improve, even if it's just by 1 percent every single month, so that we are so much further along a year from now than we are today?

One thing a practice leader can put in place Monday morning?

Gordon: I would say run a report of what CPT codes you billed out and what CPT codes were reimbursed. I would do that on a monthly basis, because anytime there's a variance, that means you potentially are being subjected to down coding by an insurance carrier.