Practice Money Leaks

4 Areas Practices Lose Money

#1 At the front-desk

The front-desk staff at medical practices have to be constantly on their toes.  They have to collect patient payments, verify insurance coverage and handle the dynamic challenges of doctor’s schedules.

#2 Managing Denials

The cost of following up on claims is $25-$40 per claim. Working denials as close to real time as possible can reduce costs and increase chances of getting paid. A great number of medical practices fail to take quick action and frequently unpaid claims are completely forgotten because of workload issues.

#3 While Submitting Claims

The typical medical practice is understaffed.  Unfortunately, it is uncommon to find independent practices submitting claims on the same day of a patient’s visit. Claim backlog can result in medical claims being missed or filed incorrectly.  It is best to handle work in as close to real time as possible.  A slow revenue cycle can be a major revenue drain.

# 4 Poor Reporting

Reporting is where key business insights are found.  Because of workload an staffing issues it is commonplace for medical practices to never get around to focusing on the analytics that are essential for running the business smoothly. Without analysis of key performance indicators what start out as small issues can spiral out of control and become big issues that sometimes affect the very viability of the practice.

Outsourcing as an option…

Years ago the sentiment was that practices should perform every function in house. Things have changed.  The best companies now focus like a laser on their core competencies.  Here’s the advice of General Electric CEO Jack Welch in “Jack: Straight from the Gut”:

“Don’t own a cafeteria: Let a food company do it.  Don’t run a print shop: Let a printing company do that. It’s understanding where your real value added is and putting your best people and resources behind that.  Back rooms by definition will never be able to attract your best. We converted ours into someone else’s front room and insisted on their best. This is what outsourcing is all about.”

90% of fortune 500 companies outsource payroll.  Why is that?  Because companies like Apple and Google know that payroll is not “where their real value” is added.

Just as the outsourcing of payroll is commonplace among large companies now, the outsourcing of Accounts Receivable is rapidly going the same way for two reasons:

  1.  Because the healthcare environment has become too complicated, and
  2.  Accounts Receivable is not where a healthcare organization’s real value is.

Just this year alone we have Meaningful Use Stage 2, PQRS, ACA, Value-based Payment Modifier and the preparation for transition to ICD10.  These and other reasons have caused organizations of all sizes to seek help in the area of revenue cycle management in a effort to relieve the pressures and challenges associated with regulatory and administrative compliance.

– James