Tracking the Keys to Reducing Overhead, Retaining Revenue
OCTOBER 16, 2016
Every medical practice wants to reduce its overhead and retain more revenue. That goes without saying.
So, why don’t more practices do that? Because it’s easier said than done.
“My experience is that people probably don’t even know what it costs them to collect their money,” says Jerome Potozkin, MD, a dermatologist in private practice in Danville, California. “They may know how much they’re paying their biller. But they probably don’t know how much office space they’re allotting to that in terms of what could be repurposed for something that could actually drive revenue.”
And driving revenue is the key to retaining revenue.
Potozkin says there are two distinct approaches, or strategies, when it comes to billing. One approach is to outsource, the other is to keep it in house. But from Potozkin’s perspective, there’s always only been one approach.
“I’ve never had my billing in house,” he says. “When I first started my practice in 1998 I had no collections, so I didn’t want to have to pay a biller.”
He also didn’t want to “be beholden to an employee” for collecting money from insurance carriers. What happens if that employee is out sick, or leaves the practice?
“If you’re not collecting money, that’s costing you money,” Potozkin says. “Then your goose is cooked.”
But the biggest reason for farming out his billing wasn’t a matter of trust in an employee or the cost of benefits beyond the employee’s salary. His motivation for outsourcing was customer service-oriented. Potozkin didn’t want his staff “bogged down” by billing issues. He wanted to keep that separate from the day-to-day operation of the practice.
“[Outsourcing] allows us to maintain great customer service, where we’re not getting millions of patient phone calls to the office about their bill,” Potozkin explains. “My staff can focus on delivering the best customer service possible to our patients.”
In addition, employees, Potozkin points out, are probably a practice’s biggest expense, in terms of reducing overhead.
“If I have fewer employees, the billing service is well worth it to me.”
Staying at home
Joseph Jenkins, MD, FACS, is the owner of Dubuque, Iowa-based Tri-State Vein Center. He’s been highly successful maximizing revenue, and has 98% of his claims clear the insurers in under 30 days. He also handles all his billing in house.
“One of the reasons we did 98% is that my staff captures patient insurance card information on their initial evaluation,” Jenkins says. “Then my biller goes into their insurance and finds out where they stand with their deductible, and how they’re going to pay after they meet their deductible to their maximum out-of-pocket. We get the patient responsibility up front.”
The practice also maintains a four-inch binder containing all the medical necessity criteria for every insurance company it deals with. But still, Jenkins says none of this would be possible without his electronic medical record.
“Maximizing the use and benefits of your electronic medical record is key to achieving this,” he says.
Jenkins says that educating staff and developing a particular mindset within the practice is key to success.
“Because of the small practice that I’ve got, the staff really feels empowered, and feels a part of the organization,” he says. “They see the benefits from doing this.”
He explains that prior to maximizing his electronic medical record, patient information was maintained in an Excel spreadsheet. Now, his biller simply needs to click on a patient’s name, fill in the appropriate information, and the form is completed.
“The bottom line is cash flow,” Jenkins says. “Money comes into this practice quick. That’s the key.”
Will maximizing use of an electronic medical record and retaining billing in house enable other medical practices to have 98% of claims clear insurers in under 30 days? Maybe not.
“Even if you take it from 35% up to 50%, that’s a significant improvement on cash flow and trying to run a business,” Jenkins says. “And staff doesn’t have to hang around the office making phone calls. They get out of the office earlier.”
But it also frees up time for staff to be more productive.
“They’re coming up with a whole bunch of different ideas on what we should do to grow the practice,” Jenkins says. “If they were all tied up and frustrated with insurance companies, I don’t think they would be doing that.”