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Identifying Revenue Leaks in Medical Practice – Part 1

February 6, 2018

Revenue Leaks in Medical Practice.jpg

As the first installment of a three-part series uncovering revenue leaks in medical practice, this blog will focus on front desk and medical billing processes and procedures with suggestions for improving performance. 

Missing payments from any number of sources can reduce a practice’s revenue to the tune of thousands of dollars annually. While busy practitioners and their staffs may think that there isn’t the time or personnel to monitor, let alone fix, the problem areas before financial damage is done, nothing could be further from the truth. Here are a few examples of what omissions or carelessness can cost and how to fix them.

The front desk: first line of defense

The front desk should be laying the foundations for correct billing and patient information, but busy staffers may be distracted or unaware of the importance of information-gathering. Are staff:

  • Verifying patient insurance coverage with each and every visit? Patients may change payers and forget to tell the front desk when checking in.
  • Ensuring that any pre-certifications or pre-authorizations are in order? Requirements for these may vary depending on payer, so again, it’s important to verify coverage.
  • Ensuring that patient information, such as address, phone numbers and other pertinent information accurate and complete?
  • Discussing any non-covered charges, copays or deductibles with the patient beforehand for better transparency? Better financial-responsibility communications should include making payment arrangements agreeable with patient and practice.

Is your billing department costing your practice revenue?  

  • Over-collecting from patients

Over-collecting payments, especially when applying them toward deductibles, is more common than many providers think. When billing staff don’t keep accurate track of payments collected, these can add up substantially over the course of a year. If, for example, your billers have over-collected $30,000, the practice will need to refund that to patients who were affected. Regular payment reviews in tandem with EHR can reduce these expensive mistakes.

  • Undercharging cash patients

The flip side of over-collecting is undercharging at the time of service when patients who pay cash aren’t charged the full amount due after a visit. While you may sympathize with a patient’s financial situation, charging only $75 of a $150 visit is going to add up to a significant loss over time – and that’s just for one patient.

·         No enforced cancellation policy in place

No-shows” account for more loss than many realize: 500 of these over a year’s {{cta(‘fe2c2b8c-b789-4047-bdd3-999242ee9278′,’justifyright’)}}time could work out to over $65,000 from potential revenue lost. Or, if your policy is to charge a $40 fee for last-minute cancellations but you don’t collect it, you are losing even more money.

·         Provider charting errors

Wrong codes, modifiers and incomplete chart notes can happen when providers and billing and coding staff become overly busy and distracted. 300 missing notes that would be billable for $200 apiece would add up to $39,000 in lost revenue. 

·         Avoid “courtesy” charge write-offs

If a patient had negative issues with the practice, will negative encounters result in “goodwill” or “courtesy” write-offs? While it’s understandable to not want a bad practice review from an upset patient, rather than write off as a “No Bill”, it might be better to have an honest discussion with the patient and learn the source of the dissatisfaction.

Reduce losses by using a professional medical billing service

A professional medical billing service can do an audit to show you where you might be losing revenue as well as steps to take to prevent further losses. M-Scribe works with you to optimize your collections by reducing coding errors, identifying the most profitable procedures, payer comparison, as well as improved patient communication. Contact them at 770-666-0470 or for a confidential, free analysis of your practice’s needs.


Next week:  Payer Issues

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