How well does your small practice manage its finances? For many, the challenge of creating and maintaining peak operational efficiency is difficult, especially since you are likely wearing a lot of hats—clinician, CEO, CFO, and more. The problem for many small and medium-size independent practices is that not paying close attention to your finances could be costing you a lot in lost revenue.
In this two-part blog series we’ll discuss five of the most common ways that small practices are losing money.
One of the most difficult things about medicine is the way the payment system is setup. The web of insurance payers, self-pay patients, pre-approvals, and other hoops to jump through makes it difficult to get paid for all the clinical services you provide. Since you provide the service up front and get paid later, most practices have a hard time collecting all the payments they are owed from patients and payers.
Your ability to collect as much of the payment as possible (based on contractually allowed amounts from payers) is affected by whether you:
- Collect copays or coinsurance from patients at the time of service
- Have accurate insurance information to bill the payers
- Use the correct codes to bill for the services you provided
- File appeals and pursue denied claims effectively
- Collect some or all of the payment from self-pay patients up front
Having the right medical billing software can help with payment collections. It provides front desk staff with information about what patients owe, verifies insurance, alerts you to required pre-approvals, and integrates your EHR with billing software to transfer information for billing once the patient’s visit is complete.
Even something as simple as collecting the copays at the time of visit can save your small practice thousands of dollars by not paying for all the costs to try and collect that $15-$25 payment they owe after they leave the clinic.
Physicians use medical billing codes (CPTs) to indicate to a payer the level of service provided in a patient visit. Medical billing staff and clinicians are responsible for knowing which codes to use to avoid “upcoding” or “downcoding” errors.
- Upcoding means using a code that is too complex based on the medical necessity, documentation, or facts of the patient’s care. Doing this could result in a medical billing fraud charge, so it’s critical to understand which codes should be used and when.
- Downcoding means you use a code that is not complex for the care you provided (perhaps because you don’t have the right documentation or level of specificity). It means you’re not getting paid as much as you should for a visit. Using a medical billing software that helps you identify the correct codes, or an outsourced medical billing service with people who have expertise in coding, can help you avoid downcoding or undercoding that is costing you money.
In part two of this blog we’ll go over three other ways that small practices could be losing money. If you’re worried about revenue cycle management at your independent clinical practice, contact us today to find out how the billing software at AdvancedMD can boost revenue and collections.