A new study from the Rotman School of Management in Toronto about workplace theft and cheating may have important implications for medical practices. The study found that deprivation effects -- such as being harmed by the recent recession, or by new public policies -- reduce employees' commitment to ethical behavior. Prior to feeling deprived, people tend to believe they'll maintain their moral standards regardless of circumstances; however, when put to the test of reduced financial well-being -- especially compared against peers -- the study found that people may relax their standards, especially when they believe their change in position is unfair. This is a helpful reminder to practices to make sure internal controls are in place, to reduce temptation. The recession (ongoing in some markets), deep resentment of the ACA among some staff, and the added workload from new regulations all may contribute to employees feeling disadvantaged versus peers outside of medicine, or even versus patients. (Some employees may also feel sympathy for patients whose health plans will carry more patient responsibility payments in the coming year, too -- perhaps resulting in losses from co-pay waiving and the like.) Internal controls are the kindest way to protect your practice against internal theft. By setting up procedures and structures that reduce temptation and make theft more difficult, you reduce the need to be suspicious or personally monitor employees -- and allow your practice the freedom to cultivate the family-like atmosphere that so many of us want. If your internal controls need a review, please don't hesitate to get in touch.
Our last post talked about some of the key performance indicators a practice can examine to understand how well it is performing. Now we will dig a little deeper and look at other indicators that identify if a practice is above the norm and meeting the expectations the team has set. Managing referrals and the revenue cycle It is important to monitor and compare these additional performance indicators between each physician in the practice from year to year: Top ten CPT codes by utilization: Determines the high demand services and variables between physicians. This report can also be used to track payer reimbursement trends for these top revenue sources. Number of new patient and established patient visits: Monitors practice growth or decline. Referral trends: Tells you who are referring, who is not and how this is changing over time. This is also a good way to evaluate referral management and marketing efforts. Accounts receivable and days in A/R, DAR reveals how well you are doing at bringing in the money. Aged accounts receivable 90 days or more: An important indicator for monitoring internal billing and collection performance. Ideally ,this will be less that 15% of the total A/R. Outstanding claims: If there are variants between physicians there could be contracting issues or differences in physician coding (CPT and ICD) and reporting patterns. The old saying “you cannot manage what you fail to measure” is true. When armed with this data the practice will be able to better understand its position and know what corrective actions and changes need to be made. If this post brings a question to your mind that remains unanswered, contact us by following this link: www.capko.com. We are on your side!
To begin your quest to understand how well the practice is performing is to compare last year’s financial performance to the prior year, examine shifting trends and identify the reasons these shifts are occurring. For example, are you doing less of a particular procedure and, if so, is there a reasonable explanation – or if one physician’s production took a dip was it due to more scheduled time out of the office or is it an abnormality that needs to be addressed. Perhaps one urologist’s aged receivable has spiked because of a payer contracting issue. Identifying these types of issues is a good start to managing finances better. It is also important to compare performance to your peers by obtaining the Medical Group Management Associations Cost Survey (if it includes your specialty), www.mgma.com and The annual Joint Statistics Report from the Society of Healthcare Business Consultants, www.nschbc.com. In a group practice it is important to look at the group as a whole, as well as the some specific numbers and benchmarks for each physician. Examine group performance based on the per physician averages to evaluate and manage income and expense trends and staff levels. For example, how does the practice compares to the average practice in your specialty around the country? • Number of full-time equivalent staff • Gross charges • Percentage of contract adjustments • Gross revenue, expenses and net profit • Operating expenses as a percentage of gross revenue If you simply want to know # of FTE (full time equivalent staff) and percentage of operating expenses against revenue let me know: Go to www.capko.com Capko & Company your source for practice improvement
Does your practice know how well it is performing - and if not, why not? It's important for physicians and managers to examine performance each month by looking at specific Key Performance Indicators, KPIs. This will help you understand your position and is powerful in guiding decisions to improve performance. Medicine is a business and it's time to take this seriously. Here are a few basic KPIs to look at each month: Income and itemized expenses as a total percentage of income. This will tell you where the money goes. The highest expense is likely to be staffing costs. If this shows a jump it may be due to inefficiency that results in staff working overtime or adding another staff member to support the inefficiency. Then again it might be poor morale, resulting in lower productivity. Accounts receivable. The average A/R for physicians runs around 1.5 months of charges, if yours is more than 2 months it is important to examine billing procedures and find out what's causing the problem. Is it becomes someone is on vacation, the computer crashed, claims rejections or a lack of attention to aged accounts? Speaking of aged accounts if the amount 90 days aged of more is above 18% get more assertive with collection pursuit. Productivity reports are included in the month-end management reports typically produced by the practice manager and reveals the total charges, receipts and adjustments for the practice and should also compare each physician's individual production. Keep an eye on fluctuations that need to be explained. Sure, one docs charges will be down if on vacation or ill, but otherwise start looking for the cause. If adjustments are climbing, dig to be sure staff understands legitimate insurance adjustments and fights for your money when insurance plans make errors. Industry expert, Healthcare Business Advisors, states that 30% of claims in the US are denied and of that 15% are never resubmitted, despite the fact that 70-80% of appealed claims eventually get paid. Be proactive and get what you deserve! Missed appointments cost the practice plenty, so track them. More than one or two a day is not okay.
It doesn't matter how busy you are if production doesn't turn to revenue - collections rule the day! Here's what you can do to keep the money flowing. First, establish solid financial policies. Put them in writing, communicate your expectations of staff, give them the training and the tools to succeed, and then hold them to the task. It can be done, but your success depends on you giving staff the support they need and paying them what they are worth.Next, review and analyze collection performance. It is wise for the manager and physician to review these reports together each month, compare performance to historical trends and look for hot spots that should be addressed.1. Unpaid claims 2. Aging reports3. Aging by payer class 4. Patient balance report 5. Payer performance reportsAnalysis of these reports should include several months with graphs to identify trends. The trends revealed help you understand how the practice is performing and determine if a change in procedures or policy might improve performance. These actions are essential steps to ensure you are getting paid for what you do. Contact Judy Capko, one of America's best known practice management consultants; www.capko.com