6 Key Steps for Financial Success
Maintaining a strong bottom line is key to a successful business. The complexities found running a medical practice today make maintaining a strong bottom line an overwhelming challenge. Here are six fundamental steps to achieving financial success.
- Maintain productivity – The most important part of achieving financial success in a clinic is a provider team whose higher productivity result in higher revenue. Effectively monitoring provider productivity helps to manage the providers’ expectation of compensation and the business’ bottom line. Regular reports tying productivity to revenue should be reviewed with providers. A manager should always be looking for ways to enhance revenue streams by creating more efficient processes and services that add to the revenue stream. Maximizing revenue (charges) is number one for financial strength.
- Capture all charges – After services are provided, all of the charges must be captured. First, make sure every service performed is identified and captured on the billing sheet or in the electronic health record (EHR). Providers, nurses, technicians, and any other staff involved in providing services must properly document everything they do. Second, medical claims are paid based on procedure and diagnosis codes; therefore, documentation and coding must be accurate to ensure revenue is not left on the table or put at risk for recoupment. Third, capturing and submitting this information in a timely fashion is important.
- Verify clean information is being sent the first time (demographics, ins, coding, etc.) – Correct insurance information, demographics, and code entry is imperative for the initial submission. Incorrect information results in denials and delayed payments, which will directly affect revenue streams and increase costs.
- Effective office collections – An office must be disciplined at collecting patient balances due while the patient is in the office. Copays, deductibles, co-insurance, or past due balances are much, much easier to collect while the patient is in the clinic versus weeks or months after the visit. Establish a clear policy and culture where this is done consistently.
- Effective collection policies and procedures – A billing department must have clearly stated and written collection policies and processes, including how to work denials, following up on aging claims, how and when to collect from patients, and when to send claims to collections and write off bad debt. Spend time to identify simple and straightforward processes. Office staff are much more effective when working within a structured process than when “making it up as they go,” or choosing the path of least resistance. Set metrics that are measured and reviewed with the staff on a regular basis to maintain effectiveness.
- Regular review of contracted payer rates and operational costs – Review payer contracted rates periodically to make sure you are negotiating the best rates to maximize revenue opportunities. After ensuring a strong revenue flow, review costs such as liability insurance, cost of supplies, phone contracts, and other operational expenses to make sure you are receiving the best prices available.
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