Topics: Medical Billing, Revenue Cycle Management, Practice Management
Medical practice management is a major undertaking that seems to become more complex and challenging with every passing year. Once a part-time job that was often delegated to a physician’s family members, managing a medical practice today requires a wide range of skills and experience to navigate complicated financial, legal, and staffing issues that can impact even the smallest players in the healthcare industry.
Whether your medical practice employs its own practice manager or relies upon an external practice management consultant, there are many steps you can take to improve your practice’s operations. Here are a few medical practice management resources, tips, and advice that can help your medical practice services run smoothly and enable sustained growth over time.
- What is Medical Practice Management
- Why Effective Medical Practice Management is Essential
- Top Picks for Medical Management Resources
- Best Practices for Managing a Medical Practice
- How to Improve Your Practice’s A/R for Optimal Revenue Cycle Management
- Boost Your Medical Practice Management with NCG Medical
What is Medical Practice Management?
There’s plenty of things that go on behind the scenes at a medical practice. While physicians must also keep up with patient care, they also must run a business. Medical practice management are the administrative tasks that keep a medical practice up and running efficiently so physicians can deliver care to patients.
Managing a medical practice involves everything from medical billing and claims processing, metrics reporting, appointment scheduling, and organizing patient data. Whether through the help of medical practice management software, in-house staff, or outsourced consultants, managing an efficient and productive medical practice is possible with these tools.
Why Effective Medical Practice Management is Essential
The components of a highly successful practice don’t just involve delivering the best care to patients, but also optimized medical practice management. Managing a medical practice ensures that all operations are running efficiently and smoothly so that your patients have a better patient experience and you’re receiving your due revenue. It’s a chain reaction that leads to more patients and better healthcare, and eventually a profitable practice.
While balancing patient care and running a business can be a challenge, practice management resources and tips can help develop your practice’s operations and care while making meaningful changes in your overall management.
Top Picks for Medical Practice Management Resources
From EHRs and document management to clinical practice management systems, dozens of new products and tools – many built by upstart young technology companies – are changing the face of medical office administration as we know it. Here are some of the practice management resources that can enhance managing a medical practice.
Resources from Lean Startup Management
The healthcare landscape is always changing, so healthcare providers must adapt and evolve to the changing market. Surprisingly, tech entrepreneurs can provide advice and lessons on achieving success for even medical practices.
First published in 2011, Eric Ries’s book The Lean Startup has become the seminal guide for tech entrepreneurs around the world. His management ethos aims to turn the growth and scaling of a technology company from an art into a science by providing a framework for entrepreneurs to test their hypotheses, meet their customers’ needs, and stay flexible enough to redirect (or “pivot”) their businesses when necessary.
While not all of the methodology of lean startup management can be incorporated into medical practice management, the key principles of the lean startup ethos apply pertinently to businesses across all industries - including medical practices. A vital key to improving your medical billing outcomes is to view your medical practice as a business, not just a vehicle for delivering patient care. Here’s how to utilize several of Ries’s top “lean” principles for your own practice’s success.
Seize Opportunities to Create New Revenue Streams
The term “entrepreneurship” has been around for decades, and it didn’t always call to mind the image of tech developers building apps in their garages! Entrepreneurship is about launching, building, and growing businesses that seize opportunities and solve problems. By nature, your medical practice solves problems (i.e., the health issues faced by your patients). But what opportunities is your practice seizing? Consider how you can better serve your community and create new revenue streams by offering additional services. Telemedicine and group visits are some of the ways you can expand your boundaries.
Importance of Strong Management
Lean startup methodology dictates that founders must gear the management of their companies specifically to the context of their businesses, and that applies fervently to the medical office setting as well. How much consideration do you give your employees and the unique experience of working for your practice? How much information do you give them on medical practice goals and how their efforts help you meet them (or not)? How are they motivated to help you achieve better financial outcomes? To see improved bottom-line results, it’s imperative that you never, ever neglect to provide your team with strong direction and management.
The fundamental activity of a startup is to build a product, measure how customers respond, and learn whether to pivot or persevere – and the same goes for your practice. Consider a big change you’ve made at your practice in the last year, whether it was a rearranging of your staff, bringing aboard a new physician, or contracting with a medical billing service. How did your patients respond? How did you assess the outcome of your decision? How did you know whether to stick with the new direction or try something else? All medical practices must monitor their data, review their business outcomes, and learn from every one of their decisions. Otherwise, it can be far too easy to spend too much time on the wrong path for your practice.
Enhance Your Medical Practice Management with an MSO
With managed care plans on the rise, many consumers are responsible for a greater portion of their care costs. This translates to many practitioners that want to earn revenue from managed care patients have little choice but to buy into a physician-hospital organization (PHO) or sell out to a larger group or hospital.
But there is a third option available to these healthcare practices. By working with a management services organization (MSO), providers can essentially straddle the line between the independent and dependent options for operating a practice. An MSO is a business that provides non-clinical services to providers to help those providers better manage their business concerns. To determine how attractive an MSO relationship may be for your practice, be sure to ask yourself the following questions:
How important are managed care patients to your medical billing performance?
As of 2020, approximately 40 percent of Medicaid patients are enrolled in managed care plans. Yet as healthcare shifts further toward-managed care-first models, they’ll grow more important in the years to come – so now may be a wise time to find a transitional way to bring them into your practice.
Do you need longer-term solutions than an MSO can provide?
But there’s a downside to that “transitional way” mentioned above. Most healthcare-industry stakeholders don’t believe the MSO model will be around forever; long-term, it will likely be phased out by the rise of Accountable Care Organizations (ACOs) and Patient-Centered Medical Homes (PCMHs). If you’re more interested in exploring those approaches than in maintaining your practice’s autonomy, you may be wise to take the bigger leap to an ACO or PCMH model now instead of using an MSO as a short-term solution
How qualified is the MSO support system when it comes to your specialty?
MSOs are most popular among specialist physicians who still want or need to accept indemnity patients to grow their revenue. But being the only practice in your specialty in a given MSO network may create challenges if you have specialized administrative or medical billing needs, like dermatology, acupuncture, and other specialists often do. Working with an outsourced medical billing company is often a smart way for those practices to improve their overall performance.
Best Practices for Managing a Medical Practice
If you’re wondering how to manage a medical practice for increased profitability, then follow these best practices for improved medical practice management.
Update Your Medical Policies Guide
Like many other areas of your practice, policy-driven tasks like medical billing are likely a matter of routine. If your staff members know how to do their jobs well, your practice probably appears to run like a well-oiled machine. But is that machine operating at optimal efficiency?
To assess the effectiveness of your medical processes and physician practice management, it’s important to put your policies down on paper so you can review and update them periodically. In our experience, small practices often don’t do this, relying instead on legacy staff and institutional memory to educate newcomers on how their software works, what their steps are, and who is responsible for certain process-related tasks (such as medical billing).
If your practice operates this way and the entire end-to-end process is housed only in the heads of your staff, you could be headed for trouble if they leave or retire. In a worst-case scenario, relying heavily on your team in the absence of written policies can potentially put you at risk for embezzlement.
If You Don’t Have a Policy Guide…
It’s time to create one from scratch. Task a member of your team with auditing your medical practice to sketch out the entire process for key tasks. Or, better yet, hire an outside practice management consultant who can not only help you outline your current processes, but also assess and improve them.
Have the point person interview individual employees about their roles and responsibilities, and subject them to additional training so they’re fully immersed in the intricacies of modern healthcare practice processes. Armed with that information, have them create a step-by-step list detailing how patients move through your office from start to finish, beginning when they call to make an appointment and ending with payment to your practice.
Include in your guide pertinent information about the major payers you work with, the most common services rendered at your practice and the associated costs, details about how your software works, and “troubleshooting” info about any issues your staff frequently face. This will help to identify tech bugs, typical denials, or any other kinks in your system.
If You Do Have a Policy Guide…
Consider how long it’s been since you’ve reviewed your policy guide. Are your practice and pricing details up to date? Is your medical practice management software running on a newer update than it was on when you put the guide together? Are you working with any new insurance networks with particular specifications?
Take frequent opportunities to update, modify, and improve your practice’s processes and make sure all changes are reflected in your guide. At a minimum, you should review your policy guide quarterly to keep it up-to-date. To stay on the cutting edge, you should go back to it much more frequently to add more thorough information.
Ideally, your healthcare practice’s policy guide is a living document in which you and your staff continually input greater and greater detail on your processes. The more information available in the guide, the more useful it will be as a training tool and the more likely it will be to help you avoid problems.
Streamline Collections to Boost Your Revenue
No matter how many patients you serve or how low your denied claims rate, all unpaid balances weigh down your revenue stream and overall medical practice management. Since collecting past due balances can be complicated, many practices keep unpaid copays and other bills on their books for far longer than they should.
A few simple steps can go a long way toward streamlining patient collections and keeping your revenue stream consistent. Incorporate these efforts into your practice.
Train Staff to Collect with Confidence
Asking for money from patients – even when it’s overdue – can be uncomfortable, especially for newer employees. Make payment collection part of your incoming training plan for front desk attendants and, if your long-time clerical staffers are failing to get payments in the door, retrain them to be direct and straightforward with patients regarding balances.
One best-practice tip is to instruct employees to ask a patient an open-ended question (such as “How would you like to pay your balance today?”) rather than one that the patient can respond to with a simple yes or no (as in “Would you like to pay your balance today?”). The latter question makes it too easy for the patient to provide a negative response.
Accommodate Struggling Patients with Payment Plans
If the same patient repeatedly tells your staff members that he or she cannot afford to pay, be open to working with them on a payment plan (up to a point). Getting some money from a patient is always better for accounts receivable than getting nothing – even if it’s just small amounts spread out over time.
Designate a member of your staff as the point person for creating patient payment plans. Make it part of your policy that the staffer follows up with patients if they don’t make payments as planned.
Take a Hard Line When Necessary
It’s likely that more than a few of your past-due patients aren’t struggling financially but are refusing to pay for other reasons. Worse yet, they may be coming back repeatedly to abuse your kindness if you don’t force them to pay up – racking up thousands of unpaid charges on your balance sheet.
Send patients certified letters when they fail to pay after a certain amount of time has passed (some practices use 90 days as a benchmark). Follow up with letters indicating that the patients may be dismissed for failure to pay. And involve your doctors when necessary; sometimes a message directly from an MD is stronger than one received in the mail.
Outsource Your Medical Billing Practice Management
Many practices work with collection agencies to pursue payments after their patients go off the radar – though the effectiveness of that method is middling since agencies charge high overhead fees. Keep in mind, however, that there are other services you can employ to streamline accounts receivable (A/R) before reaching the debt collection step.
Outsourcing medical billing is one way to place more muscle behind patient collections since medical billing companies typically have defined schedules and procedures for following up with delinquent patients. Engaging a medical billing service can also help you review operations to see where payments are slipping through the cracks.
Keep Your A/R in Order
One of the most challenging parts of running a healthcare practice is taking steps to ensure that revenue keeps flowing smoothly. When an accounts receivable process is neglected or poorly managed, payments slip through the cracks and revenue can become inconsistent. To make sure your practice is capturing everything it earns efficiently, it’s important to keep two notable principles in mind:
Track Receivables by Day
With every payer in your network working on its own unique schedule, it’s vital to think outside the traditional 30-60-90 day receivables box. Why? Because the sooner you follow up on a denied or unpaid claim, the better your overall odds of receiving payment.
Start by closely monitoring your revenue cycle management and seeing exactly how quickly your payers typically pay on your claims. That means by day, not by month. There’s a big difference between a payer who reimburses on day 31 than one who reimburses on day 59. Once you have enough data to recognize each payer’s patterns, you’ll know when the appropriate time is to contact a payer to make sure you receive payment. Follow through! If the payer usually pays by day 35, call them on day 36 and so on.
Optimize Your Contracts
To achieve better A/R management, your agreements with insurers must be in line with fair market rates and billing requirements. Assess the per-encounter payment rates on each of your contracts and make sure there’s only small variability in how you’re reimbursed by all of them, especially for your most frequent kinds of encounters. Most contracts with payers are written on an annual basis, so if you spot issues, you must negotiate with the payers who aren’t pulling their weight as soon as possible.
How to Improve Your Practice’s A/R for Optimal Revenue Cycle Management
Continuous improvement is the key to revenue cycle management success. Small enhancements to your medical billing operations can make a big difference in the consistency of your revenue stream by helping you dodge reimbursement delays and denials.
One key performance indicator for your back-office team to watch is average days in A/R – which measures the usual number of days it takes for you to receive payments from insurers and patients for services rendered. To determine your average days in A/R, divide your total accounts receivable by your average daily gross charge (which is your total gross charges for the past year, divided by 365 days). The lower the number, the more quickly you’re getting your practice paid every dollar it deserves!
Every payer operates on its own payment timeline within a range of 30 to 90 days, but keeping your practice’s days A/R as close to 30 as possible should be your goal. As with all things related to the revenue cycle, adhering to common-sense best practices like collecting co-pays at time-of-service and working with a medical billing service can help you achieve better A/R outcomes. In addition, here are five smart tips that can help you enhance efficiency:
1. Try a Batch Eligibility System
If you’re not performing eligibility checks in advance of your patient encounters, you’re likely seeing more denials and payment delays than necessary. Since conducting manual eligibility checks can be a timesuck on your staff, consider utilizing a tool that can automate the process: a batch eligibility system can provide a report detailing each patient’s current coverage and eligibility status, helping you catch any insurance changes that occur between the booking and encounter dates.
2. Create Better Billing Statements
Efficient A/R requires prompt payment from both payers and patients – so if your patients can’t comprehend your billing statements, it’s unlikely your days A/R is under 45. Revisit your statement template and make sure it’s as readable and patient-friendly as possible. We recommend using a clean design, large typeface, and bulleted lists detailing dates and charges.
3. Bill Patients Faster
The quicker you get bills to patients, the more quickly you can expect payment (or follow up when you don’t receive it). Audit a selection of statements to check how long it typically takes for them to be sent; if it’s more than a few business days, work with your staff to figure out why it’s taking so long and resolve the issue appropriately.
4. Expand Your Payment Options
If you’re not already accepting online payments and credit cards, you’re setting yourself up for longer-than-necessary days A/R. Patients increasingly want to handle payments in the most convenient way possible – which rarely means sending a check in the mail – and are more inclined to pay right away when they can apply their balances to reward-earning credit cards.
5. Find Your Offenders
As you invest in lowering days A/R, find the outliers who are keeping the metric too high. Calculate average days in A/R by payer, not just overall, to determine if there are one or two who consistently lag. If so, get them on the horn and address the problem – bringing up your payer contracts if necessary. And don’t let non-paying patients off the hook either: sit down frequent offenders and put them on notice. If you don’t, it’s your own revenue cycle management that will suffer.
Boost Your Medical Practice Management with NCG Medical
Putting a good medical practice management system in place is incredibly important for building and sustaining a successful healthcare practice. Whether your needs involve clinical practice management or physician practice management, having the right support can make all the difference when it comes to issues such as medical billing and privacy compliance.
At NCG Medical, we’ve been helping healthcare practices devote more attention to patients for four decades by handling all the ins and outs of the medical billing process. Our customized solutions can improve revenue management cycles and ensure that your practice is realizing the full value of the services it provides. Contact us today to learn more about how we can transform your medical practice management.
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