Much like the patients you treat, your practice can appear healthy on the outside despite significant internal issues. And when those issues are money-related, the consequences can be deadly. If your practice already is in the red, you know you’ve got some pretty serious cash flow problems. But even if you’re in the black every month, you may still be washing dollars down the drain. While there are myriad ways your practice might inadvertently be losing revenue, here are my top three bottom-line busters:
1. Front Office Flubs
From check-in to check-out, your front office processes can have a big—and sometimes negative—impact on your clinic’s bottom line. One big gap that’s costing you extra? Eligibility verification—or lack thereof. Ideally, your practice should have a 72-hour verification policy, meaning your front office staff must check patient benefits within 72 hours of the patient’s appointment. This policy allows patients to make more informed healthcare decisions, gives you time to fill cancelled appointments, and helps protect your practice from bad debt. However, due to patient walk-ins and last-minute scheduling changes, a 72-hour verification policy may not be possible. Verifying benefits before the patient arrives or—at the very least—is seen by the therapist is still an appropriate and effective approach.
Checking for benefits also provides you with the details necessary to create an efficient claims process—and that starts at the very first visit. Does the payer require specialized forms or additional documentation? Do you have to obtain pre-authorization to provide treatment? Knowing the answers to these kinds of questions will increase productivity and keep you on track with those timely filing deadlines.
While we’re on the subject of benefits: Is your front office staff informing patients of their benefits—and their financial responsibility—from the get-go? If not, you’re setting yourself up for payment collection disaster. Once you’ve notified the patient of his or her benefits, I’d suggest obtaining written confirmation of his or her understanding. Then comes the most important step: following through. Even if your patients accept their financial obligations, it’s on you to actually collect coinsurances and copays—or outstanding balances—at every visit. Furthermore, I strongly advise you to never waive your copays.
Why would you volunteer to not get paid in full for your services? Why would you knowingly and willingly de-value your skills and expertise? Check out this post if you need more convincing. There’s simply no excuse for not collecting payments from your patients. Not sure how to implement a patient fees collection plan in your practice? I’ve got a blog post for that, too; (I think we have one for everything at this point).
2. Claim Management Chaos
Another major culprit of reduced revenue: claims process blunders like coding errors, bad billing practices, or mishandling of denied claims. It’s critical to file correctly from the start—and on time. Even if you do everything else right, your efforts are meaningless if you can’t collect payment because you missed the filing deadline, so I can’t stress enough the importance of knowing—and following—the timely filing requirements for each payer. Now, keep in mind that definitions of what constitutes timely payment vary from payer to payer—and I’m betting none of those definitions align with what you would consider timely.
Claim denials are another dollar-diminishing doozy. Most denials stem from human error, so I recommend automating processes as much as possible. A cost-benefit analysis published in the American Journal of Medicine determined that an EMR can decrease errors by 78%. But unlike a Pokémon Master, even the best billing software can’t catch ’em all. And when you do experience denials, it’s important that you deal with them quickly, because payers have deadlines for re-submissions, too. Then, make sure you analyze your denied claims so you can find trends. In particular, you should investigate:
- which claims are being denied most often,
- the cause of those claim denials (e.g., disallowable charges or missing or incorrect information), and
- which part of your claims process impacts denials most heavily (e.g., coding, documentation, or insurance verification).
Once you’ve nailed down the what, where, and why of your claim denials, take the necessary steps to resolve the underlying issues for good. You may need to provide your therapists or billers with an ICD-10 refresher course, coach your front office on how to properly collect necessary insurance information at or before the first visit, or conduct additional training on how and when to apply the appropriate modifiers to CPT codes.
3. Payer Contract Pitfalls
It happens every day: providers and clinic owners receive requests to sign super-dense terms and conditions forms, and they simply do it—without question and often without even giving those legalese-laden documents a second glance (we’ve all been there). When it comes to your iTunes service agreement, it’s not such a big deal. But if you’re blindly committing to payer contracts, you could be costing your practice big bucks. That’s why it’s so important that you know the terms of your contracts—and whether those contracts are benefitting your practice. Before signing or negotiating a contract, ask yourself questions like:
- What—exactly—am I supposed to be getting paid? Is it more than my clinic cost-per-visit?
- Are there any red-flag phrases that could be reducing my payments?
- What are the other contract terms (e.g., treatment authorization process, length of denied claim appeal period, and interest accrual for late payments)?
- Which contracts are the most valuable to me?
- How many patients does my clinic see each month per payer? And can I opt out of seeing patients covered by each payer?
- Do my contracts allow for a downward payment adjustment every year?
- When do my contracts expire or renew? What will be the impact on my clinic if I choose not to renew?
To that last point, keep an eye out for contracts that auto-renew; in those cases, make sure you explicitly request any changes to the agreement before the specified renewal date. Otherwise, you lose the opportunity to renegotiate—and that means you could be stuck with a sub-par payer contract for a whole other year. While we’re on the subject, don’t be afraid to negotiate any and all of your contracts if you’re not happy with the terms.
Trust me, everything—not just your fee schedules—is negotiable, and even if you end up having to compromise, you don’t want to miss out on any potential gains because you weren’t willing to fight for better terms. Never feel pressured into signing a contract that doesn’t meet the needs of your practice. We’ve got plenty of strategies and tips for effective contract negotiation to help you get started.
You are in control of your clinic’s destiny. By taking a few simple steps to plug the holes in your revenue boat, you can make a big difference in your clinic’s bottom line. Interested in learning more about how payers can use your contracts—and the convoluted language therein—against you? Then don’t miss our free upcoming webinar, “PT Billing Secrets: 5 Things Payers Don’t Want You to Know.” Register here to reserve your spot.