Q: [Analyzing Financial Reports as a Practice
Manager] What actions do I take with a financial report as a Practice Manager? JoAnne: OK. All of this stuff will be on an
upcoming webinar covering practice managements, claims submission and problem resolution because
there is so much to it today with technology and everything that it’s not like the old
days where you work off a denied EOB. Q: What actions do I take with a financial
report as a Practice Manager? A: For me, the most informative report is
the ageing Accounts Receivable. Charges are growing on your A/R, your net collections
are decreasing. That is a PROBLEM. And I am just covering a fewm things, you have no idea
the list and how long it is. But some of the most logical things that you can do, the first
thing is to review your payer mix. Practice A can be primarily Medicare, and Practice
B can be primarily Blue Shield. Blue Shield is going to be making a whole lot more money
from the practice than Medicare. You can close your panels if you don’t want to accept
new patients with certain insurances and such. Doctors like to be fair and keep it balanced
out, but reimbursements vary with the insurance companies. Another reason why your accounts receivable
could be growing are denials. When the manager or the biller gets the remittance advice,
study the denial trends. Is it primarily insurance is terminated indicating the front desk did
not verify information, that type of thing. You want to review provider productivity.
This is true, I had a doctor, both of them they’re paid the same every week. But doctor
1 saw 50 patients and spread out the visit; doctor 2 saw 100 patients; so doctor 2 brought
in a whole lot more money than doctor 1, but they both got paid the same. So, they changed
it, they got paid based on the amount that they brought in. That is a very real thing. Review internal cash controls – another
huge, huge issue. I can tell you that I had a practice that balanced all the cash against
the encounter forms. When we posted payments, we balanced it. But for two weeks, we received
so many phone calls from patients saying, “I paid my co-payment at the time ofservice,”
and yet there was no indication that the patient paid on the encounter form. To make a long
story short, someone else was covering the front desk when the office manager was on
vacation for two weeks and they were kind of brain dead, I think, because they just
figured they would pocket the cash never thinking that if the co-payment was not posted as paid
when insurance paid, they would say the patient owe a co-payment, they’d get a bill. They
didn’t think it out. Needless to say, that person got fired. The other thing is, you want to make sure
all services and supplies are being captured per patient visit. That’s an occasional
audit. I’m just saying something as simple as a doctor or nurse practitioner forgets
to indicate that she administered a vaccine. The vaccine cost the doctor anywhere from
$175 to $250 if it’s Zostavax or Gardasil. If you don’t put that down, we don’t bill
it, the practice doesn’t see the money. You want to review the fee schedule – if
you bill $100, and your contract with an insurance company they allow $100, there’s something
wrong. Because if you look, you’ll probably find that that service is $135 in reimbursement,
but there’s no way they’re going to pay you more than what you’re billing out. So
that’s a red flag. If you see they are billing $100 and allowing $100 and you have a contract,
something is wrong. You want to study how many days the claim
is sitting in A/R. Are the biller doing their job, are they pilling up, or are we not paid?
Then, you want to see how many write-offs there are? I don’t know if you ever heard
of the Mercedes drawer but that’s where billers don’t know what to do with the denials
and they throw them in the drawer and at the end of the year, you tally it all up and the
doctor could probably buy himself a Mercedes Benz. SOLUTIONS: Basically, what you want to do
is take action! Review the remittance advices, review your contracts with your payers, look
at alternative revenue opportunities if you’re doing everything right and still not making
money. Look at your office space, reduce square footage, expand office hours, study the people
in the practice that generate income and then look at the people that don’t. Are they
getting paid a lot of money, are you getting your money’s worth? Review your purchasing process, as well as
the inventory and any security measures. I hate to say this about humans, but I’ve
seen people walk out with staple guns and paper clips and think they own it, and the
doctor is the one that’s paid for it. You want to evaluate cost cutting measures,
and if it’s costing you too much to do a lot of the billing, coding, and so forth internally,
you may want to consider outsourcing. That’s what I’ve done to my business for 34 years
before I joined CCO, and it definitely was cheaper for a physician to use someone, like,
a management or a billing company than it was to do in-house. That’s that. Alicia: Excellent advice!