Five ways that cardiologists lose money each yearPosted on: 04.12.18
Every medical practice is a business and while improving their patients’ health is a physician’s ultimate goal, running at a profit is also critically important. The two may seem to be in direct competition with each other, especially when the healthcare industry is marked by escalating costs and a decline in reimbursement rates.
It’s estimated that, on average, practices experience a 10%-15% profit leak. While each practice is different, that could easily amount to over $100,000 each year. Let’s look at the five most common areas where money may be slipping through the cracks.
1. Billing and Collection Inefficiencies
Collecting patient payments, whether directly from the patient or through the insurance company, is one of the most significant obstacles all medical practices face. Failing to bill for services, track payments, and follow up on outstanding invoices causes practices to lose a considerable amount of money each year.
It’s critical to have adequate billing procedures in place and office staff that are expertly trained and can effectively communicate with patients and insurance companies. Front desk personnel should be trained to collect payment due at the time of service, as well as any past due balances. Benefits should be verified prior to the patient’s arrival and reviewed when services are rendered. Every viable payment option should be available in your office and, although some situations may warrant a payment plan, consider offering it only after exhausting all other options.
2. Inefficient and outdated technology
In the financially-stressed medical industry, technology is sometimes viewed as a luxury, when many times, it’s a necessity. In any business, improved technology should make your job easier, save time and money, and improve outcomes. Innovation in health care is no different. Medical practices are continually faced with the need to incorporate new technology, but it’s critical to choose solutions that let you manage your services more effectively, optimize workflow, and improve patient satisfaction. It could be the reason you’re able to reduce staff, attract patients, gain referrals, and ultimately increase revenue. Whether it’s an antiquated camera, an outdated PACS, or a scheduling system from the 1980’s, you need to evaluate your investment with the future in mind.
Thankfully, there are multiple ways to approach a technology upgrade. Purchasing a new or pre-owned system, signing a lease agreement, or even outsourcing services can be smart choices under the right circumstances. Choosing the appropriate technology upgrade can significantly reduce your long-term expenses and improve outcomes at the same time.
3. Improper CPT Codes and Downcoding
Incorrect CPT coding is one of the most common errors among practices, and the reason for it ranges from a simple mistake to downcoding. Downcoding is the selection of a lower billing code than the actual service provided, which can reduce payments by about 50 percent. Practices downcode in an effort to avoid attention from insurance companies and auditors—so much so that they’re willing to charge less than they should. It’s a pattern that not only causes the practice to lose considerable revenue, but it also opens it up to additional scrutiny and subsequent penalties.
4. Insurance Denials
All physicians know that insurance denials are on the rise. Payers are requiring more detailed information and documentation and are kicking claims back for as little as a clerical error. Shockingly, CMS reported that 60% of rejected claims are never resubmitted. That’s a considerable amount of money that could significantly impact your bottom line. Develop a tracking system for insurance payments and denials from each payor. A knowledgeable staff member who is dedicated to insurance claims should work to research the denials, correct them, and re-file the claim. Don’t make the mistake of assuming all insurance denials are correct.
5. Underutilizing your EHR system
Many practices have blamed their losses on their electronic health record (EHR) system. It’s an easy scapegoat, but not really the full story. A study at the University of Michigan found that the underutilization of a practice’s EHR system was the real culprit.
Many practices didn’t implement the operational changes an EHR system affords. It can increase revenue by simply allowing you to see more patients per day or helping with accurate billing codes and single claim submissions. Almost half of the practices they surveyed didn’t benefit at all from the electronic records feature because they continued to use paper. Understanding and taking advantage of the technology already available to you is critical. If not, you’ve not only lost money on your initial investment; you’re losing revenue with every passing day.
While capturing the 10-15% of profit that you’re losing might not be simple, it’s an effort that can pay real dividends. Tasking your administrative staff with addressing these areas can help your practice stay profitable and healthy over the long-haul.