Do you manage your practice by the numbers? To make critical business decisions, one must manage and analyze the correct activity data. This article is the second in a three-part series where we discuss the daily challenges of managing a chiropractic business. In part two of the series, we will focus on defining the information you need to successfully manage daily, weekly, and monthly business activities, leading to accurate business management numbers and improved business control.
Ask yourself how you make business decisions. Do you use:
• Management reports
• Scattered data
• Instinct
• The “Chicken Little” approach
The critical information needed to make decisions includes visit volumes, visit counts, charges, payments, payment adjustments, and expected receivables. It is important to define patient account aging and to know payer source statistics. You need to know your bank balance, deposit totals, and the amount of cash on hand. Finally, it is important to have the ability to review task management by staff function, including front desk support, administration, billing, and clinical management.
Visit Volumes and Payments
The basis for a good business rests on the number of patient referrals and the number of patients walking through the door. You should know the visit volume by year-to-date and month-to-date. It is important to see the number of cancellations and no-shows and figure those empty appointment slots as a percentage of lost visit-volume revenue. (Example below)
Accurate numbers are the backbone of financial health. Kept patient appointments lead to payments and expected receivables. Acquiring these numbers requires accomplishing administrative and billing tasks critical to visualizing accurate financial numbers. Those numbers include charges posted for patient visits, such as insurance payments, cash payments, copayments, and coinsurance payments. Because billed charges do not always translate into the exact payment amount, it is important to clearly understand payment adjustments by payer source. These adjustments may alter the amount of revenue you expect from outstanding accounts receivable (A/R) balances.
Expected Receivables and Aging
A frequently used tool is the 30/60/90-day list of aged receivables, which is a report explaining the bigger picture that requires an understanding of the reasons receivables age. Outstanding expected receivables hinge on unbilled visits, billing delays, visit denials, billing errors, coding errors, and documentation delays. It is important to identify if any are issues and manage them using an organized task-management approach. Additionally, identifying the source of payment delay allows you to understand the reason for the delay and identify tasks or accounts to target in the collection process.
Comparative payer source information provides invaluable information supporting payer contractual arrangements and interfaces. Good statistics enable you to compare one payer source’s responsiveness and financial worth against another. Statistics to understand and compare by payer source include visit volume, percentage of total visits, amount billed for those visits, average dollar amount per visit, percentage received versus percentage billed, outstanding dollar amount versus amount paid, and average days to payment. Well-designed software will track and produce those numbers for you automatically. (Example above)
Bank Balance
A bank balance is only a reflection of your financial business practices, but it represents how you manage what goes into the account(s). It is a tool to pay the bills and purchase equipment and other practice-related expenses. The important aspects of managing the bank balance are account accuracy and cash flow analysis. These calculations and representations are handled outside your electronic health record (EHR) but are important to manage alongside your business management efforts.
Successfully managing your practice means you do not guess about the numbers associated with your practice business statistics. Leveraging the resources of your EHR does improve the efficiency of the process and provides a solid foundation for making informed and profitable business decisions. Numbers simply do not lie. What do your numbers tell you?
In part three of the series, you wifi learn about an organized approach for managing critical business information weekly and monthly. This structured approach to management wifi help keep your business running smoothly without devoting excessive time to the effort. It is the final piece to achieving the satisfaction of knowing your business is under control.
Kama Morrow, CPC, RCC, CCS-P, is the client services director for Practice EHR. She has spent nearly three decades leading electronic health record (EHR) implementations and providing consulting and training for various healthcare organizations.
Gretchen Bebb, MS, CCC-SLP, MM, is the allied health services manager for Practice EHR. Gretchen uses her 30 years of experience with numerous industry associations to align with clients' challenges and trends.
For more information about Practice EHR, email [email protected], visit www.practiceehr.com, or call 469-305-7171.
