There is no question that a physician practice's survival - let alone growth and expansion - in today's environment, requires navigating some pretty complex waters and a willingness to adapt quickly. According to Black Book 2014, over 80% of physician practices anticipate declining to negative profitability in 2015 due to lower reimbursement and ineffective billing systems and processes. But it is possible to avoid that fate. Even likely with the right decisions. But you have to get a lot of things right. First and foremost, physician practices need to be able to produce predictable financial performance - producing the maximum revenue possible with the least amount of fixed or overhead cost. Rare is the practice today that can handle the complexity of effective revenue cycle management with internal resources alone. Staff inevitably struggle to keep up with the changing requirements of the commercial government payers (not to mention the new exchange-based plans), tracking claims, flagging underpayments and managing appeals. And rarer still is the legacy practice management system that incorporates the smart tools needed in today's environment to enforce process discipline and avoid "dirty data" denials. To be successful, practices need a system built to take advantage of state-of-the-art technology to get smarter over time - adjusting real time as payers change their rules and their requirements. And they need a partner with the expertise and the resources on the back end to ensure that a claim is completely, accurately and quickly adjudicated to keep cash high and DAR low. This may sound expensive - and many practices may think that they don't have the capital necessary to access these sorts of resources. But with today's cloud-based systems, big software license payments and ongoing maintenance fees are as outmoded as a client-server practice management system. Most modern practice management solutions like eMDs' RCM Solution use a pay-as-you-go model - matching your costs with your revenue and aligning incentives. We get paid when you do. This helps ensure that costs are tied to revenue generation. Most practices with an in-house model today have high fixed costs - staff, maintenance and support fees, IT support, hardware, etc. - that can weigh on a practice's profitability. Another increasingly important part of a practice's bottom line is the effective collection of patient payments. Many practices have historically been reluctant to aggressively pursue the money owed by patients for fear of damaging patient relationships but with an ever growing allocation of responsibility to the patient, collecting these dollars can mean the difference between being profitable or in the red. In fact, studies show that patient receipts now account for 20% of the average practice's accounts receivable. Getting better at collecting these dollars is clearly imperative as it is clearly something that most practices are not very good at today.
The good news is that with the right processes and systems, most practices can improve their performance dramatically and actually build trust with patients with frank, transparent and timely discussions about financial responsibility. Pre-visit scheduling
- Complete full registration at time of appointment scheduling. You can confirm a patient's ability to pay only by completing a full registration.
- Implement real-time eligibility checks while scheduling an appointment. An insurance card is like a credit card - it is a form of payment. Confirming that the card is still valid and coverage still in tact is a basic step.
- Automate your appointment reminder calls.
- Encourage the patient to visit your online payment portal to review your self-pay policies.
- Enable insurance card scanning.
- Implement effective point-of-service collection tools - credit card and check scans.
- Enable automated payment plans.
- Provide scripts to help staff continue the dialogue regarding financial responsibility.
- Consider creating incentives to encourage effective collection procedures.
- Get statements out quickly. The more time that passes, the more difficult it is to collect.
- Incorporate automated balance reminder calls and emails.
- Make it easy to pay through an online payment portal and/or IVR bill pay.
- Set up a relationship with a third-party collection agency as a last resort.
Keep nimble. Practices need to keep nimble in today's fast-paced environment. Changes in reimbursement structures require frequent technology upgrades and a staff that keeps abreast of the shifting landscape. Technology improvements can help practices recruit and retain changes, navigate the labrynth of incentive programs while avoiding the bite of payment penalties and grow their top line. The transition to ICD-10 virtually mandates the greater adoption of technology in a practice's workflow - no physician wants to work with a 10-page superbill. There is no question that it is harder than ever to run an independent medical practice. As reimbursement changes accelerate, payment responsibility shifts to patients, newly insured patients look for assistance and complex mandates such as Meaningful Use and ICD-10 threaten the bottom line, it is critical that a practice have a strong foundation and are able to leverage resources beyond their own. Most practices will require the resources, expertise and assistance of a technology partner that can provide the infrastructure, constantly evolving system capability and people support to remain viable. Sources:
- 2014 Black Book Survey
- "Maintaining Profitability in the Era of Consumer-Directed Healthcare" Group Practice Journal, May 2009. Tom Stampiglia
- "Cultivating the Self-Pay Discipline" The Advisory Board Company, Financial Leadership Council
- "Getting Patients to Pay: To Do it Well, You Need Good Procedures" Physicians Practice, Vol. 21. Keith Martin