Top 5 Areas Where Most Medical Practices Overspend

Top 5 Areas Where Most Medical Practices Overspend

I read and analyze hundreds of financial statements every year and surprisingly to me the trend is not changing from year to year and from practice to practice. I hope you can use these easy tips to reduce your overhead and increase your profits!  -Dalia

 

  1. Merchant Fees – this is one of the most overlooked expenses in a medical practice. As more and more patients utilize credit cards as their method of payment the cost of merchant fees can become surprisingly high. How do know if you are paying too much? Take a look at your monthly merchant statement – simply divide total fees charged by the credit card payments received, which will be listed on your statement. If the fees come out to be over 3.5%, you are paying too much. Merchant vendors are like any other service – there are many options and cost savings opportunities that exist.
  2. Office/Clerical Supplies – EMR has been in place for almost five years yet your paper and ink costs are just the same if not more? Mostly it has to do with a matter of habit, especially if you have long time employees that just never changed their ways of doing things. It can be as simple of a fix as calling a staff meeting and encouraging all employees to have a “paperless” mentality. Your practice administrator will need to lead by example and continue to remind staff to change their habits but with the right leadership and persistence, you can save thousands of dollars.
    Besides paper and ink, there are other office supplies that typically get overbought or magically “disappear” from the office (such as toilet paper).  Implement purchase requisition request system where someone needs to request an approval for purchase – its simple to implement and it’s very effective, and the best part of it – it won’t cost you an extra dime.
  3. General Liability Insurance – this will probably come to you as a shocking fact but many medical practices are paying double insurance on their equipment. How does this happen? If you lease or finance your equipment purchases, every financing institution will add a mandatory insurance premium to your monthly payment. Then you go and submit your general liability insurance application and list your equipment (because they ask you to!) and here you have it…two insurance premiums on one CT Scan… Make sure to cross-reference all your leasing and financing details with your general liability insurance content so you don’t get double charges.
  4. Telephone and Internet – communication costs continue to increase for every business but there are a couple of things you can keep an eye on to make sure you are not getting ripped off. Look at your latest phone bill and make sure you are using every phone line you are being billed for, have an IT expert look at your internet bill – many times the internet provider will sell you faster internet and higher bandwidth when you really don’t need it. Consider consolidating your mobile and office phones for a better rate.
  5. Bank Charges – this expense is a low hanging fruit that can be easily reduced – look at what you are spending, speak to your banker and fix it. Don’t be surprised if you are still paying for a CD Rom data delivery charge even though nobody uses it anymore (or no one ever has if you ask me) and some ridiculous “monthly account analysis fee” …I am still not quite sure what they “analyze”.  Ask your banker to provide you with a monthly account analysis statement so you can see all the details and hidden fees.

Team up with your practice administrator, your CPA, your insurance agent, and your banker and you will see amazing results with little effort.

CAS Case Study

CAS Case Study

CAS Practice Case Study:

Two years ago, a local orthodontics practice reached out to us requesting our services to assist with the issues they were facing. The major issues were high employee turnover, past-due vendor payments, and lack of cash flow management.  Continue reading to see how our Orlando medical accounting firm increased profitability with this practice.

Due to the substantial employee turnover, the practice fell behind on payments and was assessed past-due penalties. Eighty-five percent of operating and clinical expenses were over 90 days past-due.  Patient satisfaction was also greatly affected. Patients experiencing the lack of practice management and customer service organization resulted in numerous cancelation of contracts and refund requests. The level of patient frustration increased due to unresolved insurance collections and refund request.

The solutions we implemented were an automated bill payment accounting software, modernized accounting software, paperless record management, and accurate financial reporting. Modernizing the accounting software was a key element in the practice transformation as it eliminated tedious data entry, assisted in creating accurate financial reports, and allowed us to monitor and maintain cash flow efficiently.

As a result of our partnership, personnel costs decreased by 30% and operating expenses decreased by 15%. Focusing on patient care resulted in a decrease of patient refunds by 66%.  New patient contracts have increased by 30%. The business has experienced a growth of 99.6% in net ordinary income compared to the same time period last year.

 

 

The goal of our partnership is to relieve key employees from repetitive and time-consuming accounting functions so that they can focus on operations and patient care.  We are able to provide timely and accurate financial reporting, so the practice administrator and owner can make relevant financial, operational and strategic decisions.

We are committed to learning and fully understanding your situation and business in order to better serve your needs.  We focus on collaboration and communication to ensure our service delivery is seamless.

Want more information on how we can help your practice save time and money?  Give us a call at 407.650.9088 or email at Info@ClientAccountingService.com.

WHAT DOES MACRA MEAN TO YOUR PRACTICE?

WHAT DOES MACRA MEAN TO YOUR PRACTICE?

Many physicians just catching a breather after implementing systems for electronic health records (“EHS”) but another challenge is awaiting right around the corner.

In 2015, the bipartisan reform legislation called Medicare Access and CHIP Reauthorization Act (MACRA) was passed. The goal of MACRA is to help change Medicare payments from quantity to quality based. Changes begin to roll out in 2017, so physicians need to begin now to understand the new structure. MACRA will consist of two payment structures, Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APM).

A new Advanced Care Information (“ACI”) performance score under MIPS takes away the old “all-or-nothing” scoring and makes up 25% of the MIPS score. The new ACI performance score is designed to make the requirements more simple, support patient care, and be flexible to meet the needs of practices. Physicians are able to select criteria to focus on for their practice and choose which measures best suit their practice.

ACI is only one section of four within the MIPS scoring system. The other three sections include clinical quality, making up 50% of the whole score in the first year; resource usage, making up 10% of the score in the first year; and clinical practice improvement activity, making up 15% of the score in the first year. Adding in the score for advanced care information, for 25% of the total score in the first year, physicians will receive a total score in 2017 that will be used for payments in 2019.

The physicians who perform best will also be qualified for bonus payments of up to 10% from 2019 to 2024. Physicians scoring below a certain threshold will see opposite changes to their payments. Penalties will range from a maximum 4% in 2019 to 9% in 2022 and beyond.

Independent health care practitioners are faced with many challenges in today’s ever changing environment. Changes in payment models and reimbursement methods, competition with a large group of employed physician practices, and changes in patients’ insurance coverage can negatively impact practices’ bottom line if physicians do not stay focused on financial performance of their practices. In order to continue to be successful, practices should commit to staying on top of new regulations and effective implementation of them as well as using best practices for cash flow management.  Call us at 407-650-9088 to set up a FREE consultation on how we can help you stay on top of these and other regulations.

 

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