Top 10 Ways to Maximize Revenue in Your Medical Practice
Medical practices have long focused on improving bottom lines by reducing expenses and developing operational efficiencies, but neither initiative is the end-all-be-all. To survive in an increasingly tight market, medical practices must find ways to maximize revenue, too.
For the past couple of decades, medical practices have focused on improving bottom lines by reducing expenses and developing operational efficiencies. Obviously, both initiatives are extremely important, but neither is the end-all-be-all. In order to survive in an increasingly tight market, medical practices must find ways to maximize revenue, too.
Here are ten ways you could maximize revenue in your practice:
#1. Review your fee schedule.
Your fee schedule should be defensible; it shouldn’t cause you to lose money, and it shouldn’t drive patients who don’t have insurance away. Determining what your highest payer is willing to pay for each procedure is a good place to start. It’s also a good idea to compare conversion factors your practice applies to its procedures with those of other similar practices, taking care to avoid price fixing.
#2. Negotiate payer contracts.
Unfortunately, many medical practices are simply satisfied with what payers are willing to pay for the care they deliver. But is it enough? Evaluate your explanations of benefits to see what a payer is actually paying. Determine what the conversion factor is—and if you should renegotiate it.
#3. Analyze evaluation and management (E/M) coding utilization.
Failing to fully understand how E/M codes work could put your practice at risk of leaving money on the table. What’s more, E/M codes give you a way to compare how your practice charges for office visits (for both new and established patients) with other similar practices. If you’re a family practice, for instance, compare the percentage of office visits you billed under a certain E/M code classification with the percentage billed by other family practices. If there’s a discrepancy, what’s the reason behind it? Which brings us to patient acuity…
#4. Account for patient acuity.
Which brings us to patient acuity—or, the measurement of the complexity of care required by your patients. How sick are they, and what type of care do they require? Perhaps your E/M codes vary from other similar practices because their patients do not require the same level of care.
#5. Know how to use modifiers.
Modifiers are typically used in surgical practices to account for a procedure’s complexity but are just as important in a primary care clinic. Several modifiers exist; two of the most common are for multiple and bilateral procedures. Modifiers can make or break your practice—it’s critical to know how to use them. It’s important to note: Insurance companies and CMS closely monitor the use of modifiers; abusing them can trigger an audit of your practice.
#6. Evaluate your patient mix.
Your patient mix can have a significant impact on your bottom line. If Medicare, Medicaid, and TRICARE patients make up the bulk of your practice’s roster, you will likely need to see a high volume of patients or be diligent about reducing expenses. It’s important to monitor and control your patient mix so it doesn’t put your practice out of business. Make a conscious decision about the type of patients your practice will serve, and budget accordingly.
#7. Add ancillary services—if it makes sense.
Over the past several years, many clinics have added ancillary services to help supplement their patient base. These range from developing an ambulatory surgical center to bringing a lab or MRI into the practice. Keep in mind, however, that these services should make sense as part of your practice.
#8. Leverage mid-level providers.
Mid-level providers such as physician’s assistants and nurse practitioners typically require one-eighth to one-half of the compensation required for physicians. For this reason, consider leveraging mid-level providers whenever possible. For example, say a practice is paid $5,000 for a surgical procedure that includes a 90-day post-op period. Allowing a mid-level provider to manage the patient’s follow-up care allows the physician to focus on procedures that will generate additional revenue.
#9. Consider sub-specialties.
The more specialized your practice is, the more profitable it’s likely to be. Adding sub-specialties can allow you to work faster and do a better job of caring for your patients.
#10. Incorporate telemedicine.
Telemedicine is the future of healthcare. With this technology, providers can improve efficiencies, obtain results more quickly in areas such as labs, x-rays and MRIs, and cut down on unnecessary office visits. This allows for office staff to reduce interruptions and focus entirely on care during each patient’s office visit.
Which revenue-boosting activities make sense for your practice?Before you implement any one of these activities, it’s important to evaluate the impact it could have on your practice. Your CPA can help you think through the pros and cons of each. With this perspective, you can determine which is best—for the health of not only your practice but also your patients.