Maintaining Financial Health of Your Family Practice

Maintaining Financial Health of Your Family Practice Rising operating costs, changes in payer policies, declining reimbursement, and increased compliance negatively affect the financial health of family medicine. In addition, operational inefficiencies and waste further affect profits and revenues.

The presence of a certain amount of each factor is inherent in any family practice. In this blog, we share ways your family practice could be losing money and prevention tips that can help you maintain your practice's financial health.

Efficient family practice billing Medical billing and coding are the backbones of your family practice's revenue cycle. Poor billing practices can lead to unnecessary financial losses. Improper billing is most often caused by the incompetence of your internal staff. For example, front desk staff may fail to verify and document patient demographics and insurance details. Because of this, claims may be sent late or to the wrong payer and patients may leave without being billed correctly. You need to familiarize yourself with proper billing practices and apply them in your practice.

Basic billing activities, such as confirming insurance coverage, processing new claims, and following up on delinquent accounts, should be performed according to quality standards. At the end of the week, review the practice's charge reports, collections, adjustments, and accounts receivable for unexplained changes or trends.

Accurate Coding The next most common way to maintain the financial health of your family practice billing is to code accurately. Most family physicians do not keep their coding knowledge up to date, resulting in reduced reimbursement and delayed or denied claims. Some family physicians do not code enough, fearing penalties for overcoming and unbundling. Leaving coding entirely in the hands of support staff can lead to many errors, as they do not know what actually occurred in the exam room. Medical coding guidelines and payer policies are updated regularly, so

ongoing training is needed. Periodically, an experienced consultant can perform a coding audit. Frequent coding audits will suggest more accurate diagnosis and procedure codes and also check documentation against industry standards.

Updating fee schedules Many family physicians think fee schedules are no longer important in this age of discount medicine, but even in a capitated environment, you cannot calculate a fee-for-service equivalent to assess a plan's PMPM reimbursement without an accurate and up-to-date fee schedule. Some practices base their fees on capitation or Medicare reimbursement. Others base their fees on a survey of what nearby physicians charge, often resulting in localized, informal fee freezes as the same groups simply compare their fees to each other year after year. Fee schedules that are not based on the resource-based relative value scale (RBRVS) often result in fees that are too high or too low. And a single mispriced service can cost your practice thousands of dollars annually. Update your rates annually on your own or with the help of a consultant.

Avoid excessive overtime Improper resource planning and excessive overtime can cost family practices thousands of dollars a year. Overtime is a fact of life for most family practices, but it can and should be strictly controlled. At an hour-and-a-half salary, each hour of overtime could have been substituted for 1.5 hours of work at the regular salary by someone else or by an alternative schedule. Often, staff members work unnecessary overtime, such as when trusted staff members stay late while the last patient is being seen. Adjust staff schedules to minimize overtime, such as by using split shifts or 10-hour days. You can have only one staff member stay to help the last patient left. Always insist on prior approval of all overtime and always respect the staffing budget.