Identify those small, insignificant areas of lost revenue; you'll be surprised how quickly these areas will add up.
As we enter into the New Year, it's time to identify areas of lost revenue. As I sat down and started this process, I found more and more areas where we could improve. Once I identified the areas, I took it a step further and identified the dollar amount associated with each occurrence.
What I have found has blown my mind. I'm a pretty solid process person and I do love my data. However, the areas I've found where absolute revenue was lost are areas that I don't normally monitor, and could just be associated with normal practice expenses and losses.
I'd like to share some of my categories and then challenge you to sit down and identify your own. The results will shock you.
• Under charging patients cash at the time of service. For whatever reason, you have a handful of patient that come in and pay cash for your services. Are you or someone reviewing the charge amounts to make sure the patient is being charged the appropriate amount for the time spent at the office. If you are seeing a patient for thirty minutes, but "feel sorry for the patient" and charge them only for fifteen minutes, this can add up. Let's say that happens over the course of a year by ten different healthcare providers, a total of 650 times. So instead of charging $150, $75 is charged. A total revenue loss of $48,650 has just happened, and you have no way of making that up.
• Front-office staff over collects from the patient. This happens far more often than you might think. The insurance verification has been completed, and a week later the patient comes in. The patient has a $5,000 deductible and $850 still needs to meet. Well, if your front-office staff collect up front and don't keep track of the total amounts they are collecting, they can over collect from the patient. Even small amounts add up when patient come in for more than one visits, over the course of a year. So, your billing department now has to refund approximately $30,000 to patients that have been over collected on. This not only means that you're now out that $30,000, but if you bonus your front-office staff a small percent (say 2 percent) on that $30,000, you are also out $600. So, now you're up to $30,600.
• Missed chart notes. Sometimes things get busy and healthcare staff cannot keep up on their paperwork. A week goes by, and then a month, and perhaps a few more and patients' notes are not written and billed out to insurance companies for payment. Even just a few notes from each provider can add up to a significant amount. Identify through your EHR program what those missed notes were and get those written down. Calculate what your overall percent collections are at (say 65 percent of billed charges). If you are missing 300 notes at an average billed amount of $200 each, you are looking at a loss of $39,000 in lost revenue.
• A patient has come in, interacted in a negative way with a staff member and you choose to not bill the patient at all. This is called a NO BILL or a "Courtesy Write Off." I do not advise in this type of behavior just to keep the patient happy and not write a bad review of your practice. Speak honestly with the patient and try to resolve the issue. If you had 150 occurrences of these courtesy or NO BILL adjustments over the course of a year at an average of $130 inflow potential, you have just adjusted yourself out of $19,500.
• Do you have a cancellation policy that includes patients who no-show for visits? You should. If you add up these cancels and no-shows over the course of a year and find that 500 of these instances have occurred, you have not only lost $65,000 in potential inflow from those lost appointments. Now, if you take it one step further, and say you have a policy of a $40 fee for a last minute cancellation or a straight up no-show (less than 24 hours), but don't charge the patient for not attending their appointment, you've also lost $20,000 in cancellation fees.
I have identified about four more areas, but just with the ones listed above, you can easily reach a half-million dollars in lost revenue by just working through your day and not paying close attention to those small, insignificant occurrences. If you have ten or more employees who are billing out visits, its time to sit down with them and help them understand that on occasion, these types of things will happen. If they each perform ten occurrences of each of these categories, plus more you will identify, you can see how quickly these lost opportunities will add up, causing you to lose a lot of potential inflow.