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Net collections: Are you waving the white flag?

The subject of net collections seems to be in the ether these days. (For the purposes of this discussion, I'm referring to net collections as the amount your practice is ultimately reimbursed for services it provides, i.e., your net reimbursement after adjustments or credits.) Though it's long been a staple metric, its usefulness in our high-deductible environment may be in doubt. Since net collections measures how much of what you're entitled to has actually been paid, an accurate calculation of it can be invaluable. But therein lies the rub. An accurate calculation of this "simple" metric is increasingly hard to come by. Practice management systems have gotten much better at tracking multiple fee schedules and comparing them against what we've actually been paid--this isn't the problem. The problem is that more of our reimbursement must now come from patients, so it may take months for any service to be fully reimbursed. If you run a report on net collections for a recent time period, this lag in reimbursement will suppress the average net collected for all your payers. If you're running the report primarily to keep an eye on your payers, this lag is enough to make the aggregate data all but useless for that purpose. The report will almost always "show" that your payers haven't reimbursed as promised, even when the reason is simply that it takes more time to bill patients and for them to pay. An executive at one of the larger groups we've worked at confessed to me that "we don't even bother with net collections reports anymore. Entering the fee schedules is a waste of time." While I can understand the frustration, I think there's a risk of throwing the baby out with the bathwater. There's a lot of value in calculating net collections. We want to know--no, we need to know--if payers are reimbursing as agreed. And when slow patient collections drag down the net collections figures, that information is also important to understand. What if patient bad debt is starting to climb? Net collections analysis can help you spot this and take action.

By |2022-01-01T22:51:43-08:00February 12th, 2020|
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Responding to external trends that threaten practice profitability

When we work with physicians and managers who've found their financial results have inexplicably declined, they often wonder why the profit numbers changed when the practice is still managed in the same careful way as before. It's a puzzle and a disappointment and a huge source of frustration! But therein lies the rub: As managers, our job is often to respond to changes that happen outside our business. Doing things the same way, even when executing perfectly, is often not enough to assure good results. Things are happening in the broader market that affect our patients and their behavior. It's our job to recognize when trends that have nothing to do with medicine still require a response from our industry. One really powerful example of a completely external trend that is nonetheless affecting every practice business is the rapid adoption of online payments by consumers. If your practice hasn't responded to this trend, it's probably already affecting your collections negatively. The shift in payment behavior by consumers has been dramatic. I created the chart to the left using USPS data showing that single-piece stamped mail has declined more than 50% in the past decade. The Post Office attributes this decline to shifting consumer preferences, especially for bill payment. The days when it was normal behavior for consumers to sit down once a month and review paper statements, write stacks of checks, stuff the checks in return envelopes, then stamp the envelopes and drop them into the mail are rapidly disappearing. Patients' strong preference for paying electronically is both an opportunity and a threat to your practice business. Give patients an easy way to pay online -- better yet, give them electronic statements, too -- and you'll get paid faster, with less labor required, and reduced paper and postage costs, all while making patients happier. Now that's some serious upside! But if you don't make online payments possible, you're also risking getting paid more slowly, with higher collection costs. That's because it's not just a matter of patients preferring to pay online. They're organizing their budgets and managing their money in

By |2022-01-01T22:51:46-08:00July 21st, 2018|
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Reducing the cost of no-shows at your medical practice

(c) Sheri Swailes - fotolia.com No-shows can be a huge drain on medical practice finances. Time that is booked but ultimately generates no revenue is a loss that comes right out of your bottom line. It’s similar to what airlines experience when they have an unsold seat – which is why airlines so often resort to overbooking, and some practices do, too. But if you've seen the negative media coverage about the impact of flight overbooking on passengers, you already know what a stressful gamble the double-booking “solution” is. It's all but impossible to predict which patients will fail to show up -- so you could end up with too many arriving at the same time. Even when overbooking helps reduce lost revenue, it can create other problems -- like long waits, rushed visits, and stressed out physicians -- that lead to unhappy patients and higher marketing costs. Practice managers and physicians often throw up their hands in frustration about how to deal with no-shows, especially if they’re already taking steps to remind patients, or perhaps even charging a no-show or late-cancel fee. There’s no doubt about it, trying to improve your practice no-show rate can be challenging. But there are a few ways to look at the problem that practices sometimes miss. Consider if any of these ideas might help you reduce the cost of no-shows to your bottom line. Reevaluate Your Appointment Slots Practices often have standard appointment slots that they haven’t reviewed in a while. We recently worked with a practice that had used only two slots for over a decade: 30 minutes for established patients and 45 minutes for new patients. When we looked at how long visits were actually taking, we found that more time was usually set aside for the visit than was necessary. Besides reducing the overall number of productive slots the practice had available, these over-long slots amplified the impact of any no-shows. Even a single no-show usually left a 45-minute hole in the middle of the schedule – ouch. By tweaking the timings just a bit (30 minutes for

By |2022-01-01T22:51:46-08:00June 11th, 2018|
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When business problems trigger emotions, facts and data are paramount

It's a fact of medical practice management life that unilateral decisions by other organizations can show up out of the blue and negatively affect the practice business, such as when a payer changes reimbursement terms or stops paying for a code that was previously reimbursed. In situations like these, practices have no obvious short-term option but to accept the decree or perhaps vow (through gritted teeth) to drop the payer at the next opportunity. These episodes can be understandably frustrating, even downright infuriating. Sometimes, though, the emotions triggered have the potential to turn a third party's adverse decision into an even more harmful one you make yourself, if you're not careful to take a breath and evaluate all the data you can get your hands on before responding. A recent case in point: a client of ours found that Medicare had suddenly decided that a particular CPT code for administration of a biologic drug was inappropriate and could no longer be billed for that purpose; the substitute code pays only about 20% of the one the practice (and others across the country) had been using for several years. At the same time, a national health plan that is the practice's top payer announced that it will continue to pay the higher-value code, but will only permit one use per patient per day. This is a problem for the practice because the medication in question often has to be administered twice during a single treatment, and each administration requires that the medication be individually mixed and prepped. The practice has found this therapy to be increasingly important and beneficial to a growing proportion of its patients. More staff time has been allocated to it as demand for it has climbed steadily over the past few years. Because of this, these unhappy reimbursement surprises sparked a strong reaction from the physician owner and his practice manager. With respect to their national payer, they were all-but-ready to drop the plan entirely."If we can't bill twice when we administer two shots," the manager was immediately certain, "we'll lose money! We're going to have to

By |2022-01-01T22:51:55-08:00October 29th, 2016|
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Avoiding insurance errors, problems tops the list of medical billing priorities

Capko & Morgan has had the honor of collaborating with the MedData Group on several recent MedData Point surveys. This month, we worked together on one of our favorite subjects: billing and collections. The results may reflect some subtle but interesting changes to recent trends. For the past few years, it has seemed that the dramatic increase in patient payment responsibility was the focus for most practices.  According to this new survey, patient payments are still a very pressing concern for most practices (53%). But this issue was edged out for the top concern by coding errors and other denial causes, which 59% of respondents considered very pressing. We wonder if this is related to narrowing of networks, increasing pre-authorization demands from some payers (mentioned by 49% as a pressing issue), lingering ICD-10 issues, or some combination of the three. Not surprisingly, AR and bad debt are still top-of-mind medical billing problems (49%). We were a bit surprised, though, that preparing for new payment models was only a pressing concern for about a quarter (28%) of respondents. But the CMS is also projecting that most practices will hold off on alternatives to fee-for-service payment, at least for now. Only 25% of respondents put adding or enhancing billing technology on the list of key concerns. We’d love to see more practices take advantage of the growing array of innovative, affordable tools to improve collections from patients and health plans alike. These results seem consistent, though, with what we found in another recent MedData Point survey: practices may not be aware of all the new front office solutions that can make their practices more efficient and profitable. Our consulting group is delighted when we get the opportunity to help practices get more from technology, including systems they've already invested in, especially to improve billing and revenue capture.  Contact us if you'd like to explore how we can help.

By |2022-01-01T22:51:55-08:00July 20th, 2016|
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Copays are declining, but that’s not good news

A recent Peterson-Kaiser Health System Tracker study revealed an interesting finding: average copayments are declining. Their study, which analyzed claims data from Truven MarketScan, found that average copay amounts paid by patients decreased by 26% from 2004 to 2014. Seems like a positive trend for patients and practices ... except that it's not. It's part of a shift that's actually making out-of-pocket costs harder for patients to prepare for and understand. That makes them harder for practices to collect. The Peterson-Kaiser analysis found that while copays declined by 26%, coinsurance increased by much more, 107%.* Payers may be emphasizing coinsurance because it is assumed, like deductibles, to be a more powerful tool to discourage unnecessary utilization of services. But for patients who need care, coinsurance can be another cause of 'surprise' obligations, since it's not always easy to calculate the amounts due. Patients may also easily confuse copays -- which are standard amounts for services like office visits, prescriptions, or the ER -- with coinsurance, which can only be calculated after determining what services are needed. This difference can lead to reluctance to pay, or fear of being incorrectly charged, especially when the amounts are significant. Here's a chart from the Peterson-Kaiser report: Coincidentally, but not surprisingly, the report also found that total cost-sharing continued to rise steadily and steeply. The analysis found that total out-of-pocket costs rose 77% from 2004-2014 -- much faster than wages. Besides the 107% coinsurance increase, deductibles increased 256%(!). For practices, this means that effective patient collections continues to be crucial to profitability. Not only are patients accounting for an ever more significant proportion of earned revenue, their payment responsibility will almost certainly continue to be confusing. It's crucial to help patients understand and prepare for the amounts they will be expected to pay. Be sure you also offer options like credit-card-on-file, mobile payments, payment portal, and payment plans to encourage their compliance. *I also wonder how much of the decline in copayments is due to patients using more preventive services, which carry no copay by law under the ACA. This could bring the average

By |2022-01-01T22:51:55-08:00July 10th, 2016|
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The legal risks of waiving copays are very, very real

Effectively collecting copays (or coinsurance for procedures) has become much more important in recent years. One reason is that they've become a bigger proportion of total reimbursement. Once just a token $5 or $10 payment, office visit copays have increased to $30, $40, or even $60 in many cases. They now often account for a third or more of the revenue your practice can receive for these services. Not collecting them reliably is a threat to your profitability. Besides ensuring full reimbursement, there's another, equally compelling reason for your practice to master time-of-service copay collections: Your payer contracts almost certainly require it. If you've been in the habit of waiving copays or billing for them, you are probably violating these agreements. Health plans view copays differently than you probably do. Copays are not just a way to reduce their portion of your fees; they're designed to discourage patients from receiving services they don't need. Copays are supposed to help keep patients on the side of the payer in the battle to reduce costs. That's why your contracts will usually state that you agree to collect them, and often further state you should do so at the time of service. (Some waivers may be allowable, but only when certain hardship conditions are verified.) Contracts also often contain language about the plan being entitled to the same discounts you give other parties -- so that if you give the patient a discount by waiving any amount they owe, you need to give the plan the same discount. (This might mean you owe the plan 100% off if you waived a patient's full copay!) For these reasons, routinely waiving copays can lead to serious problems in the event your practice is audited. If your practice frequently waives these payments -- or if some of your clinicians choose to -- it's important to get everyone up to speed on why you need to collect as you've agreed to in your contracts. I've written quite a few papers recently on front office technology that can help you collect more easily and reliably, while keeping the focus

By |2022-01-01T22:51:56-08:00April 29th, 2016|
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Deductible reset blues? We’ve got a few medicines for you to try.

Ahhh, January. We're already six days in, and it's still hard to believe we're a week into a brand new year.  Perhaps especially so if low volume has you moving through your days more slowly -- and worrying about what your revenue numbers will be at month- and quarter-end. The January effect on medical practices can be a source of stress, but it's not too late to do something about it if you're worried about lower revenue in the first part of the year. In fact, with patients changing up plans and making health-related resolutions, the beginning of the year can offer opportunities for growth, even if the patient financial responsibility features of modern health plans are working against you. Join me for a fun, fast-paced webinar on January 14 to learn a few tricks to help you improve your volume at the start of 2016. Even if you've been caught off-guard and unprepared, there's still a lot you can do -- and the ideas I'll share are both easy and mostly free. To sign up (for free!), visit this link at our sponsor Kareo's website.

By |2016-03-04T11:25:21-08:00January 7th, 2016|
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Ready for the deductible re-set?

It's almost that time again: deductibles re-set in less than a month. Got your game face on? For many practices, the end of the year is so busy, it's hard to think about planning for slow business in January, February and March.  Ironically, the cause of the busyness in Q4 is related to the cause of slower demand in January: deductibles. At year end, patients are eager to bring any known problems or elective procedures in to practices, because their deductibles have been met or nearly so; in January, many patients delay care because their deductibles re-set to their original amounts (or even higher amounts in many cases). It may also seem like there's little you can do to deal with the deductible re-set. But you do have options, and making even a small dent in the downturn can make a big difference in overall profitability. So isn't it worth trying? If you're in a pediatrics, adult primary care, or OB/GYN practice, of course one of the best steps you can take to smooth your revenue is to let patients know you have availability for preventive services in the beginning of the year. Let them know that your practice may be less crowded (barring, of course, a wave of flu or another virus coming through your neck of the woods).  Make sure patients are aware that preventive services usually come with no copayment or deductible.  (It can be helpful to create a list of common tests and vaccines that are preventive per the USPSTF, to avoid confusion.) Here's where your EHR can shine: use list-generating capabilities to identify patients that are due for preventive services, or who have chronic conditions are overdue for a regular visit.  For example, it's usually easy to isolate healthy patients you rarely see that are overdue for pap smears, hepatitis screening or check-ups. Tapping your system a little more creatively, you can identify patients that have just crossed a threshold to qualifying for a preventive service such as herpes zoster, pneumococcal pneumonia vaccine or cancer screening. Patients that turned 65 in 2015 may also be identified and offered an

By |2022-01-01T22:51:58-08:00December 8th, 2015|
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Obsessing about front office technology

Anyone who encourages me knows they'll get an earful about front office technology tools -- they've become a passion of mine.  I'm referring to things like: Patient responsibility payment estimators (e.g., Wellero, Navicure, Zirmed) Check-in tablets and kiosks (e.g., Phreesia) Online patient payment tools like portals and pre-payment sites (e.g., SpendWell) Patient payment apps (e.g., Wellero) Online scheduling (e.g., Zocdoc, DoctorBase, EHR portals in some cases) Basically, I'm talking about add-on tools that work mainly with practice management systems and/or on the Internet to improve your practice's likelihood of getting paid by patients, reduce steps in front office workflow, and even make patients happier in the process. I am a big fan of these kinds of tools, for all kinds of reasons. One is that they're unshackled from the government's goals for EHR -- they basically live only to serve practices and patients -- and I think that's what makes this segment of the market so much dynamic than the EHR segment.  The players have competition, and it drives them to innovate more; you see these vendors experimenting with many different ways (and platforms) to solve these problems. And these tools really make a difference in the workflow and collection rates of the practices that embrace them. I recently wrote a white paper that delves into the important role technology can play -- and is starting to play -- in front office operations.  It's called "Technology to the Rescue: Putting the Flow Back into Front Office Workflow."  Wellero sponsored it, and you can download it free on their site. I hope you'll check it out -- and get in touch if you'd like to talk about any of the ideas in it.

By |2022-01-01T22:51:58-08:00November 3rd, 2015|
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How empowered is your medical billing service?

Outsourcing your medical billing to a billing service has the power to make your practice much easier to manage.  It can also increase your profitability. But as the world of reimbursement continues to evolve, it's important to stay involved with the process.  If you've adopted a "that's off my plate now" approach to using a medical billing service, it's possible your service is too empowered. A properly utilized medical billing service will be an extension of your team.  Your office staff must work well with them in order to maximize the benefit you gain from outsourcing.  When everything billing-related is dropped into the billing service's lap, it's impossible for them to do their best work for you.  And they may feel compelled to make decisions for you that they really shouldn't be taking on unilaterally. Here are a few examples we've seen over the past few years of billing services believing it was left up to them to make key decisions on behalf of practice clients -- leading to sub-optimal decisions as a result: A billing service for a primary care/infectious disease practice with predominantly older patients with multiple chronic conditions received documentation about the chronic care management (CCM) reimbursement opportunity from the CMS (i.e., code 99490).  But the billing service already had trouble getting properly prepared claims and sufficient documentation from providers, even for office visits. Plus, the practice manager was inexperienced with billing, and typically deflected the service's questions with "you decide - that's your job." The service owner decided for the practice that pursuing CCM "wasn't worthwhile." She felt that the providers wouldn't have been willing to do additional documentation. The physician owner was unaware that the practice was likely leaving at least $120,000 of revenue on the table in 2015 -- revenue which could have helped the practice repair its difficult financial position; A pediatric practice assumed its billing service would "handle" all payer contracts. The billing service thought "handling" them meant simply dealing with information requests from payers, and alerting the practice when something needed to be done -- they certainly didn't expect to be negotiating new contracts, since that was far

By |2022-01-01T22:51:59-08:00October 11th, 2015|
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Are you getting the best from your medical billing service?

I'll be presenting a free webinar on Thursday, July 16, with tips and strategies for managing your medical billing service. If you're thinking of outsourcing your billing, or if you already outsource it and aren't sure you're getting everything you hoped for from the relationship, this webinar is for you. This is part two of a serious of shorter, more digestible webinars on choosing and managing a billing service, sponsored by Quest Care360.  I'm excited about this shorter, 30 minute format, because it's easier to attend during a lunch or coffee break (while still having time to grab a sandwich!).  No fluff, just the information you need. As you may know, I wrote an ebook on this subject called "Get the Best From Your Medical Billing Service," and this webinar draws from it, as well as from recent experiences with real clients using outsourced medical billing to run their practices. I hope you'll join us!

By |2022-01-01T22:51:59-08:00July 14th, 2015|
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Upcoming free 30-minute webinar on choosing a billing service

If you've been thinking about outsourcing your medical billing -- or switching medical billing services -- my upcoming 30-minute webinar can help. "Eight Questions to Ask When Evaluating Medical Billing Services" will be presented on June 25 at 10AM Pacific/1PM Eastern. If you've been wondering how to quiz your billing service options -- or just want to be sure you haven't left something out -- this short webinar will help you get ready for the evaluation process. This mini-webinar is part of a two-webinar series.  (The second in the series, "Best Practices in Managing Your Third Party Billing Service," will be presented July 16.) This mini-webinar is free!  And in addition to arming you with eight useful questions to ask prospective medical billing services for your practice, there will be time at the end of the webinar for your own questions to me about the process of screening and hiring a revenue cycle management partner. To sign up, visit this page -- hosted by our sponsor, Quest Care360.

By |2016-03-04T11:28:26-08:00June 21st, 2015|
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The worst thing that can happen when patient deductibles aren’t well managed

What's the worst thing that can happen when you staff aren't trained to manage patient deductibles and collect up front?  It's not that you won't ultimately get paid.  There is something worse that can happen, and it's not that uncommon: your practice can end up losing the revenue for the service and losing the patient. Here's how it can happen. An ill patient comes in for a service and doesn't realize she's financially responsible for the entire cost.  No one who interacts with the patient ahead of the service -- not the scheduler, not the person who calls her to remind her -- lets her know she'll be financial responsible, or estimates her costs.  The patient arrives, hopeful she'll be paying just a copayment.  And the front desk makes her day by charging only a copayment!  "You might have a balance, we're not sure.  Don't worry. We'll bill you," the receptionist assures her cheerfully.  The patient relaxes. But when the patient receives the bill -- six weeks after that service she really needed -- she's shocked to find out that she owes hundreds of dollars more.  Her insurance didn't cover any of her visit or her tests, because she has a $3,000 deductible to meet first. By now, though, this patient needs another visit for follow-up care.  She calls to schedule the appointment.  "WARNING: PAST DUE" pops up on the scheduler's screen.  "Oh! I need to alert you that you'll be expected to pay your past due balance in full when you come in for your visit," the scheduler reminds the patient seriously.  The patient is embarrassed -- and worried that she can't pay that full amount at her next visit.  She needs the care, but, on the day of her appointment, she thinks about the prospect of being confronted at the front desk for an amount she can't pay in one lump sum -- and about the fact that she'll be adding to the balance due.  She weighs her options -- and no-shows on her appointment.  She needs to be seen, but the embarrassment outweighs that need in that

By |2022-01-01T22:51:59-08:00June 14th, 2015|
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Webinar Tuesday (free): Patient Financial Responsibility (And How to Cope)

There's still time to sign up for my webinar "Patient Financial Responsibility: Tackling Your Practice's Biggest Profitability Problem."  It's Tuesday, 6/9, at 10AM Pacific/1PM Eastern -- and it's free, thanks to our sponsors at Spendwell Health and Wellero. There will be time for questions, and the webinar will also be recorded, so you'll have the chance to view it later if you register and can't make it at the live time. Click here for details and to sign up.  

By |2022-01-01T22:52:00-08:00June 7th, 2015|
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New technology and services can help you get paid (really!)

It’s no secret that physician practices are challenged more than ever to get paid in full for the services they render. Deductibles keep getting higher – and more patients are facing them. What's more, new research from the Kaiser Family Foundation shows that only about half of insured American families have sufficient resources available to meet a $2,500 deductible with cash. Beyond the financial strain of higher deductibles, there is the ongoing confusion about how they work – confusion that stubbornly persists, even though these types of plans have become more typical. And what happens when people receive bills that confuse them – or are unexpected? Naturally, there’s a good chance the bill could be incorrect – which in turn may make them much less likely to pay it. What does it all mean for medical practices? Above all, it’s important to help patients understand their health plans, and to make it easy for patients to pay. These tasks have not proven to be easy, but help is on the way from a source you might not instinctively rely on: technology. There is such an evident need for tools to help both consumers and healthcare organizations wrestle the confusion created by health plan complexity, technology vendors have been innovating at a furious pace to create solutions – and many of the things they’ve come up with are very promising. Now … I hope none of you stopped reading because I used the dreaded “T” word! For some of you, the upheaval of EMR conversion is still top-of-mind. If that’s your situation, it may be hard to imagine technology as a true friend of the medical practice. But there are some key differences in this new wave of healthcare technology, including: It’s driven by patient needs and practice needs – not a federal mandate. These companies must perform to earn your business! There’s no MU payment to hide behind; New technologies are easier to implement – some are simply apps and websites your patients can use for payment. These familiar interfaces will attract patients and make it easier for them to

By |2022-01-01T22:52:00-08:00June 5th, 2015|
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Patient receivables blues? Master time-of-service collections. Join my free webinar

The portion of your revenue that must come from patient collections has skyrocketed.  If you haven't mastered patient collections, you risk losing more of your practice's earned revenue than ever before.  But -- on the plus side -- there are more new ways to tackle this problem than ever before. I've got a new, free webinar on June 9 that shares some of the ways you can collect more while actually improving your patient relationships.  To sign up, just visit this link: https://attendee.gotowebinar.com/register/351571408146784258 We'll have time for questions, and you'll even get to learn about some exciting new technologies.  I hope you can join us!

By |2016-03-04T11:31:17-08:00May 22nd, 2015|
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Improve patient collections for immediate bottom-line improvement

The portion of your revenue that must come from patient collections has dramatically increased over the past decade. And higher copays and deductibles aren’t going away – in fact, they’re becoming the standard. A recent Kaiser Family Foundation study determined that average deductibles for patients on employer-sponsored plans have more than doubled, and now average more $1,200 per year. Collecting effectively from patients has gotten harder, and not doing it well has gotten more costly. That’s the bad news. But there’s good news, too! Best patient collection practices are emerging – and technology vendors are stepping up their game, too.  And when  you collect more effectively from patients, you can simultaneously improve your bottom line (without adding more patients or visits!) and even solidify your patient relationships. I've got a new, free webinar on June 9 that shares some of the ways you can collect more while actually improving your patient relationships.  To sign up, just visit this link: https://attendee.gotowebinar.com/register/351571408146784258 We'll have time for questions, and you'll even get to learn about some exciting new technologies.  I hope you can join us!

By |2016-03-04T11:32:21-08:00May 7th, 2015|
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Maintaining medical practice cash flow in Q1

As we've posted here before, almost all practices face the risk of a cash flow crunch in January and, really, through all of Q1, thanks to the deductible reset.  (January's revenue collections are sometimes also hit lower volume in December because of the holidays -- a double whammy.) In our experience, the decline in revenue can be anywhere from 10-20% for primary care practices (pediatrics and family medicine typically get a little 'help' maintaining Q1 volume from winter viruses) to more precipitous drops for surgical specialties (especially when there's little downside to patients for delaying surgery). The most important step practices can take to cope with the drop-off is to plan -- now that it's February, well, it's a little late for planning for Q12015, but if you're suffering from shrunken revenues that you didn't expect, mark your calendar now to start planning for Q1 of 2016 at the end of this summer.  With enough notice you can plan to set aside cash reserves so that you don't need to tap lines of credit, cut expenses or delay needed purchases when the squeeze hits.  You can also make sure you're ready to take advantage of the upside of the deductible reset: patients will be anxious to schedule procedures in Q4, after they've met (or come close to meeting) their deductible.  Alert staff that vacation time will be limited in the fall quarter -- perhaps even offer staff extra time off in January.  And, above all, start marketing procedures and mining your EHR for patients who may have wanted and needed a procedure, but put it off for financial reasons. Even though we're now in the thick of crunch time, there are still a few steps you can take to nudge the cash flow back up. If your practice's bread and butter is high-fee procedures,  look into financing options and review your financial policies.  If you're able to offer payment plans, that can take the sting out of patient responsibility payments.  Technology solutions that can help you offer payment plans that comply with HIPAA and other security requirements are more readily

By |2022-01-01T22:52:01-08:00February 10th, 2015|
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Preventive services can be the antidote to the deductible reset

The deductible reset is looming in January, and it's poised to wreak its usual havoc with cash flow. Cash-flow impact could easily be even worse this year, given that deductibles have likely increased and become more of a problem for many of your patients. Naturally, alerting patients to the possibility that they will be responsible for a significant portion or even all of their service costs at the time of booking is a necessary first step -- as is ensuring that front desk staff are trained on taking payments at the time of service. But, if you are a primary care practice or other specialty that offers preventive services, there's one more thing you can do to protect your cash flow: you can identify patients who are due or overdue for preventive services, and encourage them to book during Q1. Because services identified as preventive by the Affordable Care Act almost always* carry no patient financial responsibility (not even copay), patients may be more eager to use these services -- especially if they've recently started paying for coverage and haven't perceived much value for their premiums. Annual/scheduled preventive care can be a win-win for patients and practices. The revenue is often higher than a standard office visit, and it's usually reimbursed promptly. Reaching out to patients to remind them about preventive care is a way to communicate that you care about them. And, you'll be giving them good news about their health plans -- some patients may not realize that they can get a preventive service such as an annual well-adult exam, screening colonoscopy or mammogram without cost-sharing. One caveat: be sure that patients understand that some lab tests your physicians may want to utilize may not be covered. Patients also need to know they'll be responsible for their normal portion of costs if a visit scheduled as 'preventive' actually turns out to be a problem-oriented visit. And it's always a good idea to remind them that these payment terms are part of their health plan and the ACA -- not the whims of your practice. *grandfathered plans may be

By |2022-01-01T22:52:02-08:00January 3rd, 2015|
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Patients are worried about high deductibles — here are some ways to respond

Even this late in the year -- when we typically assume many patients will have met their deductibles -- we are hearing from practices that some patients seem to be delaying or avoiding care because of concerns about costs.  This is not limited to the ACA plans, which tend to have high deductibles, especially on the 'bronze' end.  Even patients with corporate plans are now facing enough out-of-pocket responsibility that it affects their decision-making. Some patients who may have had a trivial deductible in past years now have one with real teeth-- one that is less likely to be fulfilled unless a major illness or injury happens during the year.  As a result, some practices aren't seeing the expected influx of patients who want to get needed care before the end of the year -- and some physicians and practice managers are concerned about the well-being of both their patients and their practices as a result. Patient caution and awareness of cost may be a good thing in some cases (if it helps patients become more judicious about using optional services, and or encourages more engagement with providers and health plans).  That's certainly one of the goals of high deductibles.  But the problem is, in some cases high deductibles might also discourage patients from getting care that they really need.  And, of course, it certainly doesn't help your practice to establish and maintain a relationship with patients when they're afraid to come in for a visit(!). It can be frustrating to know how to respond, since physicians and practice managers can't do anything to change the terms of the health plans their patients are on.  What's more, if you've been watching this blog, you already know that it's very important to stay within the lines of your payer contracts (e.g., selective discounting or waiving of co-insurance is likely verboten). There are a few things you can do, though -- and it's a good idea to take a look at some of these things now, because the deductible reset (January 1) is right around the corner. Preventive care:  If you are

By |2022-01-01T22:52:03-08:00November 14th, 2014|
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If you missed Laurie’s webinar, “Front Desk Collections: the New Linchpin of Profitability,” here’s how to watch it now

If you missed Laurie's webinar, "Front Desk Collections: the New Linchpin of Profitability" (sponsored by Wellero) -- one of her most popular webinars ever! -- you're still in luck.  Sign up here and watch it whenever you like. This practical presentation hits on some ways you can immediately increase profitability while avoiding pitfalls that can erode your practice's financial health. Take a look (it's free to sign up), and, if you have questions or comments after watching, please don't hesitate to contact Laurie. [yks-mailchimp-list id="87d94b707e" submit_text="Submit"]

By |2022-01-01T22:52:03-08:00October 27th, 2014|
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Working with — or considering — a medical billing service? Here’s what you need to know.

If you're considering working with an outside medical billing service -- or are working with one now -- my free webinar next week with Kareo can help you get the very most from outsourcing.  Using a third party medical billing service can be a great way to improve cash flow and collections, and minimize hassles for your practice -- provided you know how to choose wisely and manage the relationship.  Perhaps the biggest mistake practices can make when deciding to outsource to a medical billing service is to lose focus and interest in the billing process -- making sure your practice gets paid is still ultimately your responsibility, even when you've got an outsourced team helping you make it happen. The key is knowing what questions to ask and to establish a relationship of communication and teamwork with your billing service partner. To explore these ideas -- and many more ways to maximize the benefit of outsourcing your medical billing -- please join us next Wednesday, June 18, for a free, lively and informative webinar that will help your practice work with an external medical billing service to improve profitability -- and your peace of mind! PLUS, best of all, 100 lucky attendees will get a free copy of my ebook on the subject, Get the Best From Your Medical Billing Service (Management Rx).  Woohoo!  Hope you will join me next week! Click here for the sign-up page on Kareo.com.

By |2022-01-01T22:52:07-08:00June 12th, 2014|
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“We are not a bank” — Lessons from CNBC’s “The Profit”

I just got around to watching the episode of  The Profit focused on A.Stein Meats. Now, you may be wondering why on earth I'd be posting about a meat business here -- what could that have to do with medical practice management?  Well, The Profit deals with a variety of small businesses, and there are often take-aways that apply to almost any business, but the A.Stein Meats episode really hit some notes that are so important for managing the business side of a physician practice -- especially the under-appreciated perils of poor management of accounts receivable. When Marcus Lemonis arrives at A.Stein Meats, he learns that the 75-year-old company is losing $400,000 per year -- despite $50MM in annual revenue.  He's initially confused about how the company's expenses could be exceeding their revenues.  But he soon figures out that the biggest missing piece lies in the back office: accounts receivable.  The office manager -- who nominated the business for the show -- reveals that the receivables are more than $4MM.  And Lemonis quickly notes, many are so old, they'll likely never be collected.  The owners, meanwhile, seem almost unaware of why they should be concerned about accumulating A/R -- after all, they're just trying to "work with" customers, many of whom are "friends." But, as the old saying goes, with friends like that, who needs enemies? The business's inattention to collecting the money they're owed was putting their solvency at risk; revenue is almost irrelevant if it isn't realized as cash coming into the business promptly.  Moreover, the business was essentially financing its customers -- without getting paid to do so.  Lemonis stated clearly, "we are not a bank" -- the same message we give our medical practice clients when they're too quick to say, "sure, we'll bill you" instead of asking patients for a credit card at the time of service, or a credit card on-file for procedures that need to be paid for over time. Medical practices are perhaps a bit luckier than a business like A.Stein Meats in that insurance payments still usually provide the biggest portion

By |2022-01-01T22:52:08-08:00March 31st, 2014|
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Using benchmarks wisely: staff, staff expense per provider

Our work with medical practices often involves analyzing a practice's data against benchmarks from sources like MGMA, NSCHBC, specialty society surveys, etc.  But, it's not enough just to compare against the averages and percentiles; you have to know whether meeting or beating a benchmark is a good thing.  Believe it or not, this is not always obvious. Among the benchmarks most subject to misinterpretation are staff per provider and staffing expense per provider.  Most physicians and practice managers we work with are very focused on keeping headcount and staffing expense low -- and so they're pleased to learn they're in the lower tiers for headcount and staff expense ratios.  The pleasure shifts to confusion, though, when we explain that squeezing staffing down to the lowest possible expense is not usually a path to higher profitability -- and can often be associated with lowering profitability! There are several reasons for this.  The most important is that well-trained, well-paid, motivated staff -- and enough of them -- free up providers to focus all their attention on the tasks only they can do.  Coincidentally, the tasks that only providers can do are almost always also the only tasks that generate revenue for the practice.   Increase provider time spent on revenue generating activities (and not on unpaid tasks that don't require their training), and you're on the way to more profitability. Consider that an additional medical assistant might cost a practice about $100-$150 per day.  If that additional assistant allows a practice to see as few as 1-2 more patients per day, that's a profitable addition.  Often, one additional assistant can help more than one provider -- and help the practice quickly generate more revenue than is needed to make the addition a profitable one. When a practice is focused primarily on expense control and minimizing headcount, sometimes that results in providers doing too many tasks that could be handled less expensively by staff -- an opportunity cost for the practice and a direct hit to revenue potential.  What's more, when a practice is too reluctant to add headcount, existing staff can quickly become

By |2022-01-01T22:52:09-08:00March 3rd, 2014|
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Patient payments: In 2014, it’s ‘pay as you go’

2014 will be a winning or losing game for medical practices – depending on their patient payment policies and efficiency with collecting patient payments. Patient responsibility has spiked over the years and has taken a quantum leap in 2014 with annual deductibles of $5,000 and more.  Patient share of responsibility beyond the deductible can be as much as 20%.  So if you haven’t already done so, it’s time to beef up your patient collection procedures and track performance to ensure you are collecting at the time of service.  Here are a few key ways to get paid sooner rather than later. Train staff on how to ask for money.  Give them scripts and practice so they are comfortable.  Help them understand it is appropriate to expect payment at time of service. I mean, like where else do you go and not pay for services at the time you receive them? Start at the beginning.   Staff should explain your payment policies when they are scheduling a new patient.  For established patients that are scheduling appointments on the phone, remind them of an existing balance and inform the patient that payment of an existing balance must be paid at the time of their scheduled visit – if not paid in advance.  You might even consider asking the patient to pay their previous balance with a charge card at the time they are scheduling their appointment and be ahead of the game. Plan ahead.  Every day assign someone in the office the responsibility of reviewing the next day’s schedule  to verify insurance coverage and plan for Use technology.   Automate confirmation phone calls or text messages to be placed 48 hours before a patient appointment.  The script used should include a message reminding the patient that any balance remaining on their account must be paid at the time of the visit. Avoid exceptions.   Keep providers out of the payment discussion.   Help physicians by giving them the script for a reply to patients that want to talk about payments.  Something as simple as “Mary, my main concern is your health, our billing department manages collection. 

By |2022-01-01T22:52:09-08:00February 14th, 2014|
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Remember, EFT is best

Mary Pat Whaley at Manage My Practice has posted great information about payers 'encouraging' practices to accept payment by virtual credit card, instead of by check or EFT. This method of payment is not a good deal for practices.  Merchant fees are deducted from credit card payments -- meaning a further reduction in the reimbursement received from health plans that use this credit card method.  Additionally, it adds costs because the virtual cards have to be manually keyed (increasing potential for errors and hassles -- and usually meaning a higher merchant fee than a swiped transaction as well).  If the credit cards are set aside to be keyed in batches (as it seems they would inevitably be in many busy practices), that introduces another delay in receiving payment that would already be in the bank if transmitted by EFT.  And, as the AMA pointed out in its letter to the CMS objecting to the use of virtual cards for VA reimbursement, credit card remittance advices are not standardized as payer EFT remittances are -- another source of inefficiency and cost. EFT is still the best way for practices to receive payments quickly, without any extra fee deductions, and without requiring additional, costly staff handling.  (Minimizing staff handling also reduces embezzlement risk.) All payers are required to meet federal standards for EFT in 2014 -- and that means that you can request EFT from any payer you work with.  As you know, we always recommend that practices use EFT with every payer: no checks in the office means less chance of one 'disappearing,' less aggravation taking them to the bank, etc.  Virtual credit card payments are just one more inferior alternative to EFT. As Mary Pat noted in her post, it's important to check any new contract you sign to be sure you're not inadvertently agreeing to credit card reimbursement.  (And, as we're always reminding you, this is another reason for a tickler to review your contracts annually, to be sure they don't already contain language that allows changing reimbursement mechanisms.  And watch those amendments and other mailings from plans, too!)

By |2022-01-01T22:52:12-08:00November 11th, 2013|
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Medical billing service ebook promotion starts today!

Laurie Morgan's just-published ebook -- Get the Best From Your Medical Billing Service (Management Rx) -- will be available free on Amazon.com starting today! This one-time promotion runs from October 25 - October 29. This detailed, 15-page guide is the easy way to get up to speed on selecting and managing a billing service. You'll learn tips for screening potential services (including 30 screening questions), managing the relationship, and using reports to evaluate billing service performance. The regular price is just $6.88 (already a bargain :)), but you can get it free over the next four days.  (In exchange, it would be a nice gesture to share a rating/review of the book.) The book is published in Kindle format -- easy to read not just on Kindle devices, but on any smartphone, PC, iPad or other tablet using the free Kindle software. (If you are a Prime member of Amazon, you can borrow the book for free at any time -- not just during the promotional period. Use this link if you'd like to sign up for a free trial of Amazon Prime. If you miss your chance to download for free during the promotion, a free trial of Prime can allow you to borrow it.) We hope you appreciate this free promo from Amazon, and that you will check the book out and share your thoughts on it with a review!

By |2022-01-01T22:52:13-08:00October 25th, 2013|
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Free promotion from Amazon: Laurie’s new medical billing service ebook

Laurie Morgan's just-published ebook -- Get the Best From Your Medical Billing Service (Management Rx) -- will be available *free* on Amazon.com from October 25 - October 29. If you're using or considering using a medical billing service, this detailed, 15-page guide is for you.  Learn tips for screening services, managing the relationship, and evaluating billing service performance. The regular price is just $6.88, but why not get it for free during the promotion?  (In exchange, it would be a nice gesture to share a rating/review of the book.)  Mark your calendar! The book is published in Kindle format -- easy to read not just on Kindle devices, but on any smartphone, PC, iPad or other tablet using the free Kindle software. (Incidentally, if you are a Prime member of Amazon, you can borrow the book for free at any time -- not just during the promotional period.  Use this link if you'd like to sign up for a free trial of  Amazon Prime.)

By |2022-01-01T22:52:13-08:00October 19th, 2013|
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