Blog

Three More Mistakes that are Killing Your Practice

A couple weeks ago I shared the three biggest mistakes I see practice owners and therapists make that could be ruining their business (see here). But, I couldn’t just stop at three.

Since we are constantly collecting claims data, we are able to understand both the good and bad things that outpatient rehab practices are doing on an everyday basis. Stay tuned to the mistakes below and the suggestions that accompany each of them.

  1. Marketing equally to all of your Referring Providers

All referring providers are not considered equal. Whatever practice management and billing system you are using, you should be able to discern the average reimbursement per visit from your referring providers. You should also know and track your average cost per visit. This is a critical number to know since it tells you whether the patients you are bringing in are profitable or not.

Looking for more? Download our tip sheet to learn 10 strategies for hiring the right front desk person.

Download Now

If the average reimbursement per visit from any referring provider is lower than your average cost per visit, you are essentially subsidizing that patient’s insurance. That is ok, to a specific degree. If you take on too many visits that are below your average cost per visit, you may not be able to offset this with visits from patients with higher reimbursing insurance. If you continue to market to these providers without additional thought, you could be losing money, every day. You want to make sure you are focusing your marketing to referring providers whose average reimbursement per visit is higher. In addition, you want to try to get more referrals from any provider that has historically provided a high average reimbursement but is sending you fewer referrals. You will want to ask them what it will take to get more referrals from them.

Lastly, you will want to have a conversation with all referring providers who are sending you an overflow of patients whose reimbursement rate is lower than your average cost per visit. They may be referring you patients with lower reimbursing insurance plans because they know you are the only practice that takes that insurance. In these cases, you may want to remind them that you take all insurances and it would be very helpful if they continue to send patients with that lower reimbursing insurance, to also send you patients who have insurance plans that reimburse at a higher rate.

  1. Not Effectively collecting copays

Most practices don’t have a copay or payment plan policy posted in their office. In addition, a lot of practices do not have a strategy for how to have these conversations effectively. The first step in the right direction is asking for the copay every time a patient comes in the door. Make it a habit and it will continue to get easier every time.

The chances of collecting a copay decrease 20% immediately after a patient leaves the clinic. Since most clinics have a margin of less than 10%, the copay can essentially be the difference between profitability and breaking even. Remember, cash is king. Cash on hand is worth significantly more than money you are working to collect later on. The more you can focus your team on collecting copays and setting up payment plans with patients while they’re still in the clinic, the healthier your practice will become.

We recommend collecting at least a portion of the entire patient responsibility (copays, coinsurance and unmet deductible) at the time of service as it helps to spread out the payments. There’s nothing worse than having upset patients who weren’t aware of the large, end of therapy bill they were going to receive. When presented the right way, the majority of patients will be very receptive to paying for their treatment at the time of service, and setting up an ongoing payment plan for the rest of their care.

  1. Owners/Managers not setting time aside to manage their practice

“Inspect what you expect”! If you truly want to grow as a business, it is critical for you to set time to work “on your business”, rather than simply working “in your business”. This is the biggest mistake I see from smaller clinic owners. They spend every waking hour working with their patients and very little time growing their business.

This approach is fine if you simply want to “have a job”. If you truly want to develop a scaling business, you will have to begin transitioning some, if not eventually all of your patients to other practitioners in your practice. If you have hired therapists that share the same core values as yourself, and believe in your practice’s mission, there should be very little to no difference in the quality of care that those patients receive from the therapists on your staff.

Begin scheduling time each week to review your metrics and results. If you continue to see patients, make sure you have enough time built into your schedule to sign off on all of your visits and to complete the rest of your practice’s “administrivia” (read more on this in a previous blog of mine).  The owner is often the worst offender in signing off on visits and working through claims that need additional information. It is difficult, if not impossible, to coach your team to do the right thing when you aren’t doing it yourself. And in every case, each visit you are behind signing off on, is money that is “on hold”.

Want a great tip for making time for strategy a reality? Start by going out 3 or 4 weeks ahead in your schedule. Block time each week for strategic initiatives and for reviewing critical reports. Make them recurring appointments so they won’t fall off your calendar. The last step to making sure this happens is to treat that time as a priority. Treat it with the same priority that you would treat anything else that is important to you. Why? Because it is!

While some practices have grown in spite of doing these things, practices and owners who take metrics seriously and are working on improving their metrics every week are the ones that we see expanding and thriving in the market.

Leave a Reply

Your email address will not be published. Required fields are marked *