Four Financial Habits of Effective Practice Managers
Habit #1: Know what you are getting paid for
Quite often providers perform services for which they are not being reimbursed or are being reimbursed at a lower amount than they realize. If claims are being denied and receivables are growing, it isn’t until we take a closer look at a practice’s payor contracts (and revisions to it) that we find the reason for the reduction in payment amount, or worse yet, that a service is no longer being reimbursed.
A little detective work can go a long way. Here are two ways to mitigate declining revenue:
- Review your insurance contracts and fee schedule revisions
You probably know that most insurance companies use electronic contracts, and your copy is typically housed electronically on the insurance company’s website. This makes it easy for the payor to revise your contract at any time and notify you of any revisions via an email message. It is important to keep your finger on the pulse of these changes. If they negatively affect the amount you are paid for a service that you provide regularly, it may be time to assess whether you should continue providing the service. For example, it is wise to keep your online access information (website address, username, and password) for all of your payors in a convenient yet secure place. Make it a regular practice to review your contract updates carefully. There could be a change that affects your revenue and the quality of patient care.
- Review your Explanation of Benefits Statements (EOBs)
Your EOB statements can provide excellent insight into changes in your revenue. Review them to discover what the payor is actually reimbursing and what services they are no longer reimbursing. While you have the statement in front of you, call the insurance company and confirm that it is no longer a reimbursable service.
Once you have done your research, it is crucial that you communicate your discoveries with the provider(s). Together you can decide what is in the best interest of the patient and the practice!
HABIT #2: Compare Your Expenses to National Averages
Most practice managers know how to use financial management software such as Quickbooks or Quicken to manage practice cash flow, payment of bills, and deposits. Using any of these programs, you may also generate a report of expenses by category. This report can be a very valuable tool. You can compare your practice’s expenses to the national average of similar practices across the country.
By comparing your expenses in specific areas to the national averages for other practices similar to yours, you can learn things such as whether you are spending more than other practices on supplies, if you have the appropriate amount of staff, whether you are overpaying for rent, and many other useful data points that can help your practice’s bottom line!
HABIT #3: Managing Payroll Posting and Employee PTO
This practically goes without saying, but we are going to say it anyway. Be sure you are prompt about posting payroll hours so that employees are paid appropriately and their personal time off is properly tracked. If possible, designate a time each week to take care of this task. If you are like most practices, you probably use a payroll company. These companies offer various tools to make it easy to post your payroll information. If you’re not already doing it, check into what your vendor offers as far as mobile apps and online tools that help ensure this task takes as little of your time as possible.
HABIT #4: Know When to Ask for Help
Practice managers sometimes feel the weight of the world on their shoulders. When you’re the one at the helm, it can be unnerving to admit that you need some help. You might be surprised, however, at the response you receive when you do. Help might include hiring a medical practice management firm or simply not being a “do it yourselfer” when it comes to compliance manuals and trainings or other tools that you can buy off the shelf.
DoctorsManagement offers a variety of solutions that can help you be a more effective practice manager. Don’t wait until preventable issues become problems. Be proactive about asking for help. It can prove to be of great service for you and your practice!