40% of Providers fail to collect over $31,713 a year from patients
The most central ideal for every medical practice is to serve patients. However, if not profitable that ideal is hindered. With that in mind, here are three tips to help ensure a more profitable medical practice.
First-Pass Resolution Rate
Perhaps the most important thing you as a physician can do to improve your practice profitability is to increase your first-pass resolution rate (FPRR). This rate, also known as the “clean claims rate,” is the portion of the practice’s claims that are paid on first submission. Ultimately, the goal is to get payers to reimburse you on the first pass, that way the turnaround time for reimbursement is limited and the money can be more directly reinvested in the practice. In a perfect world everyone will pay you the first time you ask; unfortunately, this isn’t always the case. However, raising the FPRR for your practice is a good way to increase profitability in a much quicker, more efficient way.
Days Spent in Accounts Receivable
Hand-in-hand with the previous tip is to try to lower the days your practice spends in accounts receivable (A/R). This is the time between the services of your practice being rendered and getting paid for those services. The ideal is to spend no more time in A/R than is absolutely necessary. Most often though the first pass misses and resolution of payment takes a bit longer. The goal for your practice is to limit the time spent here, ideally coming as close to first-pass reimbursement as possible. This can be done in any number of ways though it is recommended that you start by looking at the accounts with the longest time spent in A/R and try to get them closer to the average amount of time spent by a majority of your payers first. This will help eliminate some of the headache and eliminates ideally the need for accounts to be turned over to collections.
Streamlining the Process of Collections
Just like patients, the very last thing that you the physician want to think about and have to deal with is overdue bills being turned over to collections. It’s typically a burdensome process, but streamlining it can be an effective way to keep costs down and as a result, increase profitability. While there are several methods of accomplishing collection processes, the overall theme to keep in mind is that collections really is the last resort for payers who simply don’t reimburse you. If none of the above tips have managed to help with the turnaround time for reimbursement then referring to any number of blogs and eBooks that address this topic in more detail is the best available option. As a bonus start by identifying as quickly as possible which accounts will simply never be reimbursed. It’s unfortunate, but some of them won’t and not wasting resources on them can be a big step toward decreasing costs and increasing profit.
Hopefully these tips have helped to kick start the process of making your practice more profitable. These three ideas are not overly complex, don’t require too much in the way of hard math and are surefire ways to increase profitability efficiently. For more information on some of these tips and on other methods to increase practice profitability, refer to our eBook “Improving Your Medical Practice Profitability.”
How to Improve Profitability for Your Medical Practice
The fundamental goal of any medical practice is naturally to treat illnesses and to help people. Beyond this though a practice must be able to keep its lights on and its staff paid.Download Now