The Importance of Diversity in Today’s Chiropractic Office
FEATURE
Ray Foxworth
DC, FICC, MCS-P
Most investment professionals agree that although it does not guarantee against loss, diversification is the most important component of reaching long-range financial goals while minimizing risks. When we think about diversification, we often think of investments when looking to the future and retirement, but the reality is that we should consider diversification in all areas of practice as well. We’re not just doctors; we are also business owners. As such, it is essential that we keep our minds open to diversification in our clinics. The most solid practice model includes having a diverse group of patient types, referral streams, and payment options.
Regardless of how long you have been in practice, you have certainly asked yourself, “How much easier would it be to just go all cash?” It is a question that I get almost daily from providers across the country. I have been in practice for more than thirty years, and I once considered it too. In the 1980s, my practice was made up of 80% to 90% insured patients. I’d treat my patients, submit the claims, and collect the checks from my mailbox. Then times became a little tougher. Reimbursements diminished, coverage became limited, and deductibles rose. I started to feel the pain as I continued to see more and more patients, but the checks didn’t come in as they had in the past.
^The most solid practice model includes having a diverse group of patient types, referral streams, and payment options.??
As a business owner, I want to see my practice continue to grow. I want to see expenses low and revenues high. Unlike the 1980s and early 1990s, it now takes more staff to keep my practice operating at its full potential. I have one staff member whose sole responsibility is to file insurance claims and appeals for denials. I have other staff members who verify insurance and discuss financial responsibility with patients when they commit to care in my office. It has occurred to me that if I no longer participated with insurance and became a cash practice, I could eliminate the need for these additional staff members and further reduce my expenses. But what would that cost my practice?
The truth is that deductibles are higher and reimbursements are lower, but insurance is the gateway that brings most of my patients into the office. In fact, it is my single largest referral
source. In considering all of this, I realized that the solution is not being all insurance or all cash. It’s about balance. This realization gave me an incredible opportunity to maximize revenue in my office by taking the steps necessary to ensure that I was maximizing reimbursements when they were available, and giving my patients affordable options to keep them in my office when their insurance ran out.
I started by establishing a simple and compliant financial policy. Like many of my colleagues, I had a multipage, detailed—if not somewhat confusing—financial policy. It sat in a three-ring binder collecting dust at the front desk. In a staff meeting, I was surprised to learn that only one staff member (out of five) had even seen it, much less could explain it. I worked with a consultant and created a single-page financial policy that every team member can now explain h orn memory. I also make sure to include a review of the financial policy with any new staff members during their first week of training, regardless of where they work in the clinic.
Next, I made a commitment to review my fee schedule annually. I typically review it during the slower summer months. I start by printing my fee schedule from my software and downloading the published workers’ comp fee schedule for my state. I also print and review all of the fee schedules for insurance and Medicare. My insurance CA and I create a spreadsheet so that we can compare the actual fees in my office with the reimbursement rates of all payers. This process was
""Let’s face facts. If we only charge $50 for a service, and the allowed amount is $60, the insurance companies are not going to just be nice and pay us an extra $10. J J
eye opening. I quickly realized that I was charging less than the allowed amounts for workers’ comp and some insurance companies. This was causing my practice to lose money each time services were billed. Let’s face facts. If we only charge $50 for a service, and the allowed amount is $60, the insurance companies are not going to just be nice and pay us an extra $10.
Once I have compiled all of this information, I also review the market values in my area with our consultant. We look at each CPT code for my zip code to be sure that my fees are set at market value. If you are not utilizing a consultant, this information can also be obtained through websites such as fairhealth.org.
I also use this time to determine our cost for delivering care in our office. This number fluctuates year to year. It is important as business owners to make sure that we are not
signing contracts that pay us less than what it costs us to deliver the care. To determine this number, you need to know:
1. Average monthly overhead
2. Average monthly visits
3. Average income per visit
4. Average monthly income
Your average cost per visit is your monthly overhead divided by your monthly visits. Your percent of overhead is the average cost per visit divided by your average income per visit. Having this information in hand prevents you from signing contracts that pay you less than your cost per visit, which can ruin a practice. Although volume can cause these numbers to fluctuate, it is difficult to make up for a loss by increasing volume in your office.
Now that you have your fee system in place, it’s time to evaluate the options you have for patients to receive affordable care in your office. Many providers make the mistake of offering cash fees and discounts that could potentially expose them to complaints associated with dual fee schedules or improper time-of-service discounts, which leads to fines and penalties. There are compliant and profitable ways to provide affordable health care to your patients without exposing your practice to unnecessary risk.
Utilizing a discount medical plan organization (DMPO) in your office is a great way to give patients who have limited insurance coverage the benefits of a contractual fee schedule.
A DMPO is a legal and compliant way to offer a discounted fee for noncovered services in your office. This enables you to recommend the care your patient needs without having to worry about what the patient can afford or what insurance will cover.
Depending on the DMPO you select for your office, you have the power to set the level of discounts that are offered to your patients. This helps minimize the risk of signing an agreement for less than your cost per visit.
Affordable payment options should not be limited to discounts offered in your practice. In today’s age of technology, patients want convenience. When you make paying for care in your office convenient, you start to improve collections in monumental ways. One of the most impactful changes that we made in our office was the ability for patients to use auto debit. After our initial clinical report of findings, followed by a financial report of findings, we give our patients the option to set up all of their appointments for the care recommended. Then we set up an easy payment plan in which their credit card or bank account is debited for the services provided. We have patients that auto debit weekly, biweekly, and monthly. After the initial setup, payments are automatically debited and posted to the patient’s account in our office. This has been a huge time-saver for my staff, and it has increased collections and revenue in my
^One of the most impactful changes that we made in our office was the ability for patients to use auto debit. J J
practice. Ultimately, our PVA numbers are growing since we found an easy and convenient way for patients to receive and pay for care, all without needing to give much thought to whether their insurance is footing the bill for that day’s visit.
Choosing to be “all cash” or “all insurance” would have limited the growth potential in my office. It also would have put me at the mercy of changes in reimbursements or legislation. Now my practice remains stable through all of the changes in health care. I can provide care to patients who would be underserved due to the lhnits of their insurance coverage or their pocketbooks. Diversification allowed me to increase my revenue, but ultimately it let me focus on what matters most—helping more people in my community.
Dr Ray Foxw or th is a certified Medical Compliance Specialist and President of ChiroHealth USA. A practicing Chiropractor; he remains “in the trenches”facing challenges with billing, coding, documentation, and compliance. He has served as president of the Mississippi Chiropractic Association, former Staff Chiropractor at the G. V. Sonny Montgomery VA Medical Center, and is a Fellow of the International College of Chiropractic. To request a free one-page financial policy, send an email to infofichiroheallhiisa.com.
