Three Mistakes That are Killing Your Practice

At Clinicient, we process millions of claims every year. From this data, we are able to understand what makes for a successful practice – and a not so successful practice.

We have identified proven methods that can improve the health and prosperity of any clinic (something we call The Clinicient Way), and while I can’t share every aspect of that here, I will share three of the most common mistakes we see and provide some suggestions for how to address them head-on.

  1. Not focusing on First Pass Payment

In the healthcare industry, most studies indicate that working a denial costs five times as much as a non-denied claim. In addition, nearly 25 percent of denied claims will never be recovered. In other industries, this “unrecovered” factor is referred to as spillage. In a convenience store, spillage would include any inventory that has been lost, or broken. And because there is no way to totally eradicate “spillage”, it is critical to determine which claims and activities to focus on.

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This decision is referred to as opportunity cost. An opportunity cost is the benefit that a person could have received, but gave up, to take another course of action. In the world of outpatient rehab, too many practices are focused on fixing every single denial rather than figuring out what is impacting and decreasing their first pass payment and focusing their efforts there.

First pass payment measures the percentage of claims submitted that received a positive response from the payer on the first attempt within 60 or 90 days. Too many clinics are so focused on working their denials that they don’t take the time to determine the root cause of why their claims are being denied in the first place. The more you can improve your first pass payment, the fewer claims you will have to follow up on.

To improve your First Pass Payment, review your top denial reasons each month and determine a strategy for decreasing each one. A large number of denials can be avoided prior to the visit by confirming benefits and authorizations and taking simple steps like copying both sides of insurance cards. Other denials can be avoided by creating billing rules. If you are only focusing on working your denials rather than fixing the root cause of the issue (Stopping those denials from happening), you will have an ongoing problem. Unfortunately, we see this as being the case with a large number of practices.

One of the top denial reasons we see is the lack of benefit verification and authorizations. Checking and confirming these should be one of the top priorities for a front desk or office management team. Review these on a weekly basis for patients who are in treatment as plans change regularly and patients often see a therapist more than once a week, missing this information can be very costly.

  1. Not accurately tracking your Conversion Rate

Most practices do not track every single referral that is sent to their office. Interestingly though, the majority believe they are. Tracking all referrals means creating a new case for every single call, fax, or walk-in you receive from a potential patient. Although I am calling these referrals, this definition includes referrals from any source including marketing campaigns, word-of-mouth, etc. Track every single prospective patient who has the potential of coming in the door.

Work with your front desk to update your procedures to track every single referral you receive. Even if you do not take a particular insurance, you want to make sure you document that patient. If there are enough potential patients with that insurance, you may want to consider adding it. At the very least, you can create a talk track that supports why you are worth coming to for treatment even if they are out of network. Getting a consistent process in place to track and review every single referral will help you understand why they are coming in and – and also why some aren’t coming in. Remember, a referral needs to convert to a patient before it can add value to your practice.

To ensure you know why these referrals are not coming in, you will want to create a process for reviewing every open referral and calling any who decided not to come in for treatment. For these referrals, you will want to close their case with a reason code. This will help you better understand if you have any problem areas in your patient onboarding process.

Many factors can weigh into why referrals fail to convert. These range from the patient’s first impression of their initial call with your practice, to the cost being too high. If you don’t track everyone, you won’t know if you have any internal problems that are impacting your conversion rate. Do any of your staff lack effective customer service skills? Are they truly listening to your prospective patients? Do they understand how to handle common objections and sell the value of your service? You won’t know until you invest the time to find out. Check out this blog post by Jerry Durham to learn more about hiring the ultimate person for the front desk.

  1. Not reviewing your Cancel/No Show rate

Your Cancel/No Show rate highlights how good you are at getting your patients to show up for their scheduled visits. A high rate of unexcused cancellations could be a sign that your therapists are not effectively selling their plans of care.

Evaluating this metric can help indicate which therapists may need additional coaching on motivating their patients. Your therapist’s time is a perishable commodity and some practices may be exacerbating their issues by assigning more new patients with staff with higher cancel/no show rates (since they have more availability). This creates an even larger issue. Make reviewing your cancel/no show rate an activity that all of your staff is reviewing to ensure they realize how important this metric is.

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