Tips To Make Your Medical Practice More Profitable (Part 2 of 2)
This is Part 2 of a 2 Part Series. In this Article we discuss:
1. Renegotiating Your #PayerContracts
2. Do Not Ignore #ClaimsDenials or Sit on Your Unpaid Claims
3. Critically Assess Your Medical Practice’s Operations
4. Identify Missed Opportunities With a Thorough #PracticeAnalysis
5. Create Systems That Help You Reach Your Goals
6. Monitor Your Improvement and Adjust Your Strategy
The healthcare industry is growing increasingly competitive, accordingly, maintaining a profitable practice can be difficult.
Medical practices (especially primary care practices) have struggled with their revenue streams and the COVID-19 pandemic accelerated this trend. In an AMA survey, most doctors noted a significant drop in revenue during the pandemic; the average decrease was 32%.
There are practical steps you can take to improve your practice’s revenue stream and profits.
1. Take a Timeout To Renegotiate Your Payer Contracts
Negotiating payer contracts for a better reimbursement rate is a great way to increase profits for your practice, without interfering with the patients’ experience or day-to-day operations. Despite the clear advantages of this strategy, many doctors don’t bother to negotiate contracts with third-party payers.
When you first opened your practice, you may not have prioritized negotiating insurance reimbursement rates because you simply wanted to get your practice up and running. Now that things are established, contact those payers and renegotiate.
If you are not sure where to start with the negotiation process, contact us. CodeToolz has helped numerous medical groups and physicians review and negotiate payer contracts.
If you’re just starting your practice, negotiating these terms from the beginning is a good idea. However, you may not get the results you want simply because you don’t have the history to prove to payers that your practice will be successful.
With some data to back the success of your practice, negotiating for better reimbursement rates will be easier. Ideally, you will be able to show that your practice is growing, that your specialty is in-demand and underrepresented in your area, and that you have good clinical outcomes. These factors will show the payer that negotiating with you is a worthwhile endeavor.
Too few physicians and medical practices review and renegotiate their payer contracts. Insurance companies are sometimes willing to offer more agreeable terms to high-performing medical groups. Your organization should highlight the following factors during your negotiations:
These factors align with the Healthcare Effectiveness Data and Information Set (HEDIS), which many plans must report on to maintain their health plan accreditation and Medicare star ratings.
If you are contributing to the healthcare plan’s bottom line by improving their HEDIS metrics and their ROI, you can credibly demand more favorable terms in your payer contracts.
Here’s a great example of one of our negotiations and what can be achieved.
This group practice, as with most, did not have a clear picture of this payer. Not only was the contract never renegotiated (6+ years), but under-billings also existed. Our focus here is the successful renegotiation.
As you can see by the Units Billed this is a large practice, nevertheless every dollar is critical, and your payer contracts and fee schedules must be managed properly, no matter the size of your practice.
The Client’s Current Rates, Receipts and Units Billed are based on Jan. – Sept. 2022. New Rates will take effect for the client 1/1/2023.
Renegotiations are not always easy; some may not garner you the 6-digit increase this client now enjoys but this is such a critical aspect of your practice, it must be done.
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2. Do Not Ignore Claims Denials or Sit on Your Unpaid Claims
Inefficient claims management is one of the top reasons that medical practices lose out on revenue. If your claims are spending more than 50-60 days in accounts receivable, you likely are experiencing cash flow issues.
However, denied claims do not just slow down your revenue stream. Every time your staff must rework a claim, it costs your practice valuable revenue.
And even worse, at least half of denied claims are never resubmitted, which means those practices are not getting compensated for their care.
Your office staff needs clear workflows and systems to ensure that they submit clean claims, understand each payer’s procedures and expectations, and can track each claim throughout the accounts receivable process.
Collaborate with your billing team to manage their workflows, ensuring that you submit more clean claims, do not miss out on unbilled claims, and track their progress. (There are automated tools that can help you streamline this work).
3. Critically Assess Your Medical Practice’s Operations
As your practice grows, you will inevitably outgrow some of your old processes. Now is the time to critically look at everything you do and dig into your data. Procedural gaps involve organizational missteps or omissions that create inefficiency or result in financial losses. Do not sweep these gaps underneath the rug or make excuses. Instead, acknowledge them and start building systems that will help you rise above them.
4. Identify Missed Opportunities With a Thorough Practice Analysis
Even if you have a well-established medical practice, it is likely that you are missing out on opportunities to increase your revenue and patient volume. A thorough analysis can help you identify room for improvement. During this exercise, you and your staff will review your current systems, assess their performance, and build a plan that addresses inefficiencies in your medical practice.
Define the Analysis’ Goal
Assessing your entire practice in a single analysis would likely be a daunting task. Instead, identify a few KPIs (key performance indicators) that you would like to improve. They might include:
5. Create Systems That Help You Reach Your Goals
Now that you know where you need to improve your practice management, you can start identifying possible solutions. During this process, weigh the costs and benefits of each solution. Sometimes, a possible solution might achieve your goals, but is too costly or time-consuming to practically implement.
For example, while you could hire several more front desk staff to call and email clients, reminding them about appointments, you might be able to use automated software (Patient Engagement Platforms) that can seamlessly text and email your clients for a fraction of the cost.
6. Monitor Your Improvement and Adjust Your Strategy
Once you have implemented your new systems, carefully track your practice’s performance. Are you seeing steady improvement? Are you identifying other gaps and missed opportunities that you should address? Keeping track of your progress helps prevent a major crisis later.
Conclusion
Making your practice more profitable without sacrificing the patients’ needs or the staff’s work-life balance is difficult, but not impossible. Use these tips to help you increase profits while keeping those involved in your practice happy and healthy.?#PayerContracts #ClaimsDenials #PracticeAnalysis