Here are common areas of inefficiency at medical practices to address today to ensure continued financial health.
These are tough financial times for medical practices: Doctors are serving a greater number of patients, but at the same time the amount insurance actually reimburses physicians for medical care is dropping. In addition to rising expenses, doctors also have to deal with mountains of paperwork and must keep compliance issues in mind when they practice medicine.
Even with these rising pressures, there may be ways to save money in any medical practice - whether in a small office with one doctor or a large OB/GYN practice with 15 physicians - by targeting common areas of waste and inefficiency that may be draining thousands of dollars from your business. This article lays out common sources of inefficiency to ensure the continued financial health of your practice while you focus on the health of your patients.
Lack of discipline in collecting patient receivables
Up to 35 percent of the average medical practice's total revenue now comes from patient payments, according to a 2010 report from McKinsey & Co. in “Overhauling the US Health Care Payment System.” This means that thousands of dollars can be lost every year if a doctor's office is not diligent about billing patients and collecting outstanding balances from them. In short, patient receivables can be the difference between having a profitable and unprofitable practice!
Therefore, it is important to have written accounts receivable procedures to make sure everything runs in a streamlined and consistent fashion. Having procedures in place not only makes it more likely that your business will collect on outstanding bills, it also protects against unintentional legal violations. If your accounts receivable process is streamlined and organized, you will have a better idea of the total balance of money that is owed to you and can make financial decisions accordingly.
Often, problems with collecting patient receivables stem from having untrained staff members. Staff should be thoroughly and properly trained to bill patients correctly and adhere to established billing procedures. Even the best process is worthless unless staff can properly follow it. It is all about the approach. The way you ask for money and inform patients of how much they owe is crucial in getting the patient to feel confident you know your insurance business.
A large amount of collection dollars are lost due to the fact that the billing receivables are not coded to the correct levels. Proper coding and clinical documentation can make or break an otherwise well-run practice. Many practices are gun shy on billing codes as Medicare has cracked down on areas of poor coding practices. When documented appropriately and accurately, do not hesitate to bill for the full services rendered. This use of coding will bring your revenue inline.
Coding is a complicated process - there's one code for the type of appointment as well as codes for various procedures (flu shots, TB tests, etc.) Coding claims completely and accurately tells the insurance company about the patient's injury or illness and what treatment he or she received. Having a thorough record of care helps the billing and collections process as well as during denials management. Your patients and their insurance companies will both benefit from proper coding on your end.
In order to prevent errors involving missed charges, staff must be properly trained. A member of the billing department who is well versed in the specialty of the office can review the chart and coding sheet to see that things were entered correctly and double check with the doctor if they believe any coding errors are present. Classes are offered at colleges throughout the country for Certification of Coding for Medical Practices. An open and friendly office environment will also help, as the coder, data entry staff, billing department, and physicians should all be comfortable communicating about the reported codes and charges.
Offices should institute a regular review process to insure the coding process is working smoothly and efficiently.
Next week, we'll address three other areas for medical practices to monitor: downcoding, not following up on denied charges, and overstaffing.
David Doyle is the chief executive officer at CRT Medical Systems, a top 100 medical billing company serving clients throughout Michigan and the Midwest. E-mail him here.