The following article, by Heather Linder, originally appeared on the Becker's Spine Review, and features our very own Dave Wold.
Orthopedic practices are in a time of constant change with reimbursements, and elective surgeries declining. These changes are forcing physician practice owners to reevaluate processes and tackle inefficiencies.
Physicians should reevaluate their revenue cycles, which are too often overlooked, according to David Wold, CEO of Healthcare Information Services in Park Ridge, Ill. "There's a huge correlation between profitability and how the revenue cycle is managed," he says. "The revenue cycle of the practice is the bloodline."
Here are Mr. Wold's top eight revenue cycle concerns for orthopedic practices and ways physician owners can fix them.
1. Too many days are tied up in accounts receivable. One of the critical performance indicators Mr. Wold looks at with his surgeon's practices is the accounts receivable cycle. For the practice to make a profit, billing must be sent out promptly to get a return. Any unnecessary delay will cost a center its profit.
When working with orthopedic practices, he looks at what the turnaround is for billing. "Track that on a monthly basis," he says. "By tracking the percentages in your accounts receivable, you're looking at it every month for trends."
Monitoring the cycle each month will allow you to see if you need to devote more or less resources to an account and keep better track of all dollars.
2. Payments and cases are not reconciled daily. Even some of the best practices will lose revenue from neglecting to bill a visit. "It's amazing how many encounters get lost from the clinic to the billing office," Mr. Wold says.
At the end of every day, a clinic's administrative staff should sit down and reconcile each patient seen with the number of total charge tickets for the day. It's a simple thing to do, he says, but it can have a large impact on making sure each patient is appropriately charged for the practice's services.
3. Patients are not charged for durable medical equipment. Another prominent area where physicians are "leaving money on the table," Mr. Wold says, is neglecting to charge for each piece of durable medical equipment distributed.
Most practices do not have good systems for distribution of slings, braces and more, he says. A physician will recommend DME for a patient and one assistant will give the product to another assistant, and somehow the patient is never charged for the product.
Mr. Wold recommends a daily capture of inventory versus billing to see what exactly your practice spends in terms of inventory and amount profit made. He also suggests figuring out a way to centralize DME and develop a process for distributing inventory and properly billing for it.
4. Unforeseen insurance denials. Before reimbursement rates began to drop, procedures were getting paid in high volumes and physicians could afford to pay less attention to the insurance denials. Now, Mr. Wold says, zeroing in on why denials are happening will save a practice significant money.
"The number one reason for denials is poor insurance information," he says. "If you have the wrong insurance information and perform surgery, your cost to collect quadruples."
Rather than losing money on insurance denials, do extra work on the front end to avoid sending improper information to your payors. Technology now affords orthopedic practices the ability to monitor whether the insurance company will cover a patient's procedure. "Software can work with practice management systems and can do eligibility verification before a patient comes in," he says.