As a private practice clinic owner, you’re probably familiar with the cold sweat-inducing struggle to keep a steady cash flow. Claims management muck-ups, inefficient processes, staff issues, and lack of insight into your clinic’s financial health can leave you feeling like you’re riding a revenue rollercoaster. So, whether you’re trying to maximize reimbursements, combat employee theft, or optimize patient payments, these four keys to maintaining a steady cash flow will help you even out the highs and lows in your clinic’s bottom line:
1. Map your value stream.
If your clinic isn’t operating optimally, your cash flow won’t hold steady—and you won’t know what’s causing your revenue to ebb and flow until you examine it. That’s why it’s critical to map your value stream. In this recent post, WebPT’s Erica McDermott offers detailed advice on how to tackle this project, which I’ve distilled into these steps:
- Create a high-level flowchart of the patient experience at your clinic.
- Fill in all the missing steps, being careful to break down each step into its smallest form.
- Shadow your patients to collect meaningful data (e.g., average time to make an appointment).
Then, optimize your practice using lean principles, which will help ensure you’re running as efficiently as possible. Inefficiencies are like dams holding your clinic back from succeeding. Bust through them by removing waste—that is, any steps that aren’t necessary to run your business or don’t provide value to your patients—from your value stream.
2. Make the first visit count.
The process of submitting clean claims begins long before the patient comes in for his or her initial visit. So, make sure your front office staff is on board with streamlining your efforts from the get-go. One practical way you can avoid costly mistakes upfront is to have your staff perform an eligibility verification—or reverification—check for each patient before his or her appointment. That way, you’re setting yourself up for success—even before treatment begins. And as I mentioned in this previous post, your front office also must determine:
- coinsurance or copay,
- benefits cap,
- where to send the claim,
- whether the payer requires specialized forms or additional documentation, and
- whether the payer requires authorization. (Something to keep in mind: some payers will retroactively authorize services, but for those that don’t, you need authorization before you begin providing services.)
In addition to gathering this information, your front office staff should collect patient payments at the time they’re due—which means at the time of the appointment. Furthermore, your staff should avoid collecting payment after the patient’s visit and do everything within their power to avoid sending the patient to collections.
3. Better manage your claims.
Even if you’ve mapped out your value stream and collected clean data, these processes won’t improve your cash flow without effective follow-through. Making simple mistakes—like missing a timely filing deadline here or there—will hurt a bit. But, consistently dropping the ball can be a real one-two punch to your practice’s revenue stream. And even though it may seem impossible to keep up with each payer’s individual requirements, you can’t afford not to. Plus, when you download and print this free timely filing cheat sheet, you won’t have to. Simply keep a copy of it available for quick reference—no memorization required.
Now, unfortunately, timeliness isn’t worth a darn if your claims come back denied. Here’s why: imagine that your cash flow is a drain, and each denied claim is like a hair. Over time, those hairs collect and start clogging up your drain. Pretty gross, right? And you wouldn’t just let those hairs take over your drain, would you? No. You’d get out the drain cleaner and get to work. And you need to do the same thing with your claims—or better yet, keep them clean from the beginning. That means properly scrubbing them to improve your first-pass acceptance rates.
4. Hire the best staff
If you’ve analyzed and optimized your billing processes, and your cash flow still isn’t smooth as butter, it’s time to take a look at your own team. Because unfortunately, underperforming (or just plain dishonest) staff members can negatively impact your cash flow as much—if not more—than poor billing processes and systems. On the bright side, sometimes all an underperforming staff member needs to get your cash flow moving again is some additional training. Luckily, we’ve got a whole blog post on how to evaluate your billing team (hint: this is something you’ll need to do regularly).
In addition to evaluating potential employees for their skill level, you’ll want to be sure to hire for fit in all areas of your practice. Each clinic has different needs—as does each applicant. The truth is, not every person who wants to work for you will be a good fit, and replacing them when they—or you—realize it’s not working out isn’t cheap. So, if a staff member simply doesn’t jibe with your office culture or isn’t meeting your expectations, check out this blog post for advice on how to manage the situation. You just might find that making some changes in your staff will improve your bottom line.
Does evaluating your cash flow make you feel a little bit sick? To keep the cash-flow cold sweat at bay, just remember these tips and clean up your processes. And to learn more about how payers can hold your payments hostage, don’t miss tomorrow’s free webinar, PT Billing Secrets: 5 Things Payers Don’t Want You to Know, which starts at 10:00 AM PDT.