Successfully managing a practice can present challenges in terms of setting appropriate prices, identifying bad debt, monitoring employee efficiency and more. Here’s a look at the answers to a few frequently asked financial questions to help guide your practice’s financial health.

FAQ 1: What is the common practice for establishing “charges”?

While it is up to each individual practice to determine how it chooses prices, a frequently used approach is to set charges at 200 to 400 percent of Medicare reimbursement, with the low end of this range for office visits and the high end for surgeries. Outside of that, the main “rule of thumb” is to set charges higher than the highest commercial reimbursement. If your practice chooses to offer discounts for upfront payment, a 30 percent rate is common.

Read More ›

Clinicians and billing professionals alike know measuring cash flow is essential to making sure they have financially healthy medical practices; however, there are other key metrics, such as days in accounts receivable (A/R), that should be evaluated to ensure optimal revenue cycle performance.

Simply put, days in A/R is a measure of the amount of time it typically takes for all responsible parties to pay the practice for a service; it represents the number of days that money owed to the practice is outstanding. The impact days in A/R has on your revenue cycle is pretty clear – the longer it takes to collect payment for services rendered the slower your cash flow is. This, in turn, influences how quickly you can pay all your other bills.

Read More ›

Thank you to everyone who attended our latest webinar on March 13^th, Determine Your Practice’s Financial Health. Elizabeth Woodcock, MBA, FACMPE, CPC, led the one-hour event, which focused on the importance and purpose of key financial metrics. During the webinar, she offered advice about:

• The four key billing metrics and how to measure them.
• Converting billing metrics into business intelligence by understanding factors driving them.

To learn more about how these billing metrics can help ensure that your practice is financially healthy, click here  to download this webinar.

Read More ›

Every practice wants to receive payment for claims in a timely manner. When payment moves past the 30 day mark, it can represent a cash flow issue at the very least—and potentially lost revenue in the worst case.

When I took over as practice administrator at Arkansas Allergy and Asthma Clinic three years ago, I inherited a lot of backlogged claims. With two dedicated billing staff to handle more than 60,000 claims each year, we all had to make a commitment to whittle away at our aging accounts receivable (A/R).

Read More ›

You may recall that a few months ago I wrote a series of posts about ways to calculate key practice benchmarks, including days in accounts receivable, net collections percentage, accounts receivable greater than 90 days old and the ratio of billing staff to providers. Now, I’d like to share some ways to use that kind of data – and more – to truly optimize the revenue cycle.

In a recent discussion with the editor of an online journal, I brought up the fact that a variety of business intelligence tools now exist to help practices understand and improve their revenue cycles. Using these tools to drill down into specific details about each of your payers—instead of taking a more global perspective—can fundamentally change the way you assess your revenue streams. Read More ›

Practice management challenges, such as declining reimbursement and reducing days in A/R, are impacting all medical practices’ financial health. In order to address these challenges, ATD Resources adopted a strategy that has helped them realize revenue cycle improvements, including improving payment per case by 17% in less than one year. 

Join us on Thursday, September 30 at 1:00 PM EDT, for a complimentary webinar to learn what this strategy entails and how it can help all healthcare organizations focus on revenue cycle improvements that will enhance reimbursement.

In under an hour, you’ll hear Bette Warn, Executive Director at ATD Resources, discuss:

• Practical, hands-on approaches that will allow you to improve your bottom line.
• Strategies for identifying opportunities for change and improvement, as well as effective tactics for implementation.
• Tips and techniques for exploring and selecting technology and tools that will most effectively help you achieve your medical group objectives.

Register now.

Every business office manager knows the challenge of trying to hold down the number of days in accounts receivable (A/R) and I’m no exception. As business office manager at Orthopaedic Specialists of the Carolinas, I’m charged with managing a claim volume of roughly 500-600 patients per day for 22 physicians, 10 physician assistants and 13 therapists.

I take pride in the fact that even with such a large claim volume—and four different locations—we average about 30 days in A/R. We’ve managed to accomplish this through a few distinct efforts.

First, we have become more proactive about collecting patient-pay balances prior to surgeries and other high-dollar services. With the difficult economic times, many patients have either lost their insurance or opted to increase their deductibles—which obviously has a direct impact on A/R. Read More ›

Using benchmarks to rate the success of your practice’s revenue cycle is an age-old “best practice.” No matter the specialty or size of your practice, it is important to periodically track, trend, and review performance data. It is the only surefire way to understand your financial strengths and weaknesses, and subsequently improve both.

One of the biggest challenges I’ve found, however, is that practices may think they’re adequately tracking certain benchmarks when they’re not. In reality, it’s not at all unusual for practices to be a little uncertain about whether they’re correctly calculating and analyzing important numbers.

So, I’d like to address two standard benchmarks that, in my experience, are particularly thorny: days in accounts receivable (A/R) and net collections percentage. It’s essential to track both accurately, because they demonstrate a practice’s ability to quickly turn over A/R and collect all money due. Let’s walk through: the definition of each term; the proper way to calculate each; an example calculation; and some common potential analysis pitfalls. Read More ›