There are risks associated with any business and medical practices are no different. It’s important to create a plan for how to protect your practice from the risks that might effect it. To do this, you must first know what those risks are. Here are the top five risks that face a medical practice.
Not being careful enough in the hiring process
The first risk is that of not conducting background checks as you go through your hiring process. Background checks are likely common in larger health systems and hospitals. However, many small practices think that they’re unnecessary and cost-prohibitive. Background checks cost, on average, less than $100 per candidate and are absolutely worth it when you imagine the cost of making a bad hire. An effective hiring process begins (most often) with a thorough background check.
Not being vigilant enough when it comes to electronic safety
Next is the risk of being too casual when it comes to electronic safety. This takes many forms from staff members keeping login information on easily visible sticky notes, to employees sharing passwords, to communicating with your patients through email rather than secure messaging. These issues are relatively common in medical practices. They’re also incredibly dangerous with the rise in healthcare data breaches. It’s more important now than ever to be serious about electronic safety.
Failing to accurately code E&M services
Another risk is under-coding E&M services. This risk affects your revenue and puts you at greater risk for an audit if it occurs too frequently. Financially, to under-code is just plain bad business sense. Every time you under-code, you leave revenue on the table and that money adds up quickly. From an audit standpoint, if you consistently under-code, your payers may take a closer look at your practice and take action on your inaccurate coding. This could place you in trouble beyond just the loss of money.
Failing to fulfill your responsibility to vital knowledge
Not fulfilling your responsibility of vital knowledge is another risk. Practices are put at greater risks of failure when leading physicians don’t understand basic functions of vital reports. Sure you hired your staff because you believe they’re trustworthy, but that doesn’t mean they shouldn’t be held accountable. Pull and review clearinghouse reports to ensure that your billing staff is continually correcting and re-submitting returned claims. Review your adjustment reports at least quarterly. Don’t hesitate to ask for more information when large amounts of money are being written off to unfamiliar categories.
Interface with your billing staff to learn the status of your ten largest balances each month so that you understand how well your revenue cycle is being managed. From there, take steps to improve as necessary. Review your accounts receivable regularly. If the results aren’t what you’d like to see, put standards in place that your staff must strive for so that you don’t lose money. Yes, it’s time consuming to do these things, but it’s also vital to the health of your practice.
Not maintaining sufficient cash controls
Another often overlooked risk is sloppy cash controls. Many practices don’t think to balance the cash on hand balance against the total expected in computer reports from the day. Not monitoring cash on hand closely allows mistakes to be missed and becomes an invitation for employees to be dishonest. To neutralize this risk, reconcile each charge slip and the amount of payment your software system says you collected each day to what you actually collect to be sure that everything matches. Check your banking balance at the end of each month against your report of total collections in your practice management system to ensure that they equal. Finally, consider making sure that the staff member who opens the mail is different from the staff member who posts payments and writes refund checks. This establishes a system of accountability.
Every medical practice will face risks. Those above are not an exhaustive list, however, it is important to be aware of potential issues and to create an action plan to combat these risks. Maintaining a healthy practice begins with how you mitigate risks. Many risks can also be offset through the use of technology, such as MicroMD’s eSERVICES.