your practice 5 ways to regain financial control

Because your patients come first.Because your patients come first.Because your patients come first.

Your Practice Your Practice 5 ways to regain financial control5 ways to regain financial controlYour Practice Your Practice 5 ways to regain financial control5 ways to regain financial control

Steven A. Adams, CPC, CPC-H, CPC-I, PCS, FCS, COASteven A. Adams, CPC, CPC-H, CPC-I, PCS, FCS, COA

Because your patients come first.Because your patients come first.Because your patients come first.Because Your Patients Come FirstBecause Your Patients Come First

Five Ways to Increase Your Five Ways to Increase Your IncomeIncome

Five Ways to Increase Your Five Ways to Increase Your IncomeIncome

Step 1: Understand the Reimbursement Process

Step 2: Reduce denials

Step 3: Understand Revenue, Collections, and Overhead Step 4: Deal with Accounts Receivable

Step 5: Implement


What’s Going On?

Goal 2001 Monthly 2002 Budget

GROSS CHARGES

ADJ USTMENTS

RECEI PTS 344,175.00 100% 100% 28,681.25 344,175.00

-

1 Total Salaries 132,642.00 38.5% 24.0% 11,053.50 82,602.00

2 Staff Fringe Benefi ts 3,037.00 0.9% 1.3% 253.08 4,474.28

3 Staff Retirement - 0.0% 1.0% - 3,441.75

Lab Supplies 1,768.00 0.5%

Clerical Supplies 3,517.00 1.0% 293.08

Clinical Supplies 18,603.00 5.4% 1,550.25

4 Total Supplies 23,888.00 6.9% 6.4% 1,990.67 22,027.20

Rent 37,777.00 11.0% 3,148.08

Utilities 0.0% -

J anitorial 0.0% -

Building I nterest 270.00 0.1% 22.50

Other Occupancy Costs 0.0% -

5 Total Occupancy Costs 38,047.00 11.1% 6.9% 3,170.58 23,748.08

6 Telephone 1,832.00 0.5% 1.8% 152.67 6,195.15

7 Advertising 802.00 0.2% 0.2% 66.83 688.35

8 Malpractice I nsurance 14,323.00 4.2% 1.7% 1,193.58 5,850.98

9 Business I nsurance 0.0% 0.6% - 2,065.05

Equipment Rental 3,556.00 1.0% 296.33

Computer Support 0.0% -

Computer Repair 0.0% -

Equipment I nterest 0.0% -

Computer Exepnse 12,562.00 3.6% 1,046.83

10 Equipment Total 16,118.00 4.7% 2.4% 1,343.17 8,260.20

11 Billing Service - 0.0% 0.8% - 2,753.40

Dues/ J ournals 3,794.00 1.1% 316.17

Conventions/ Seminars 3,162.00 0.9% 263.50

12 Total Dues and Education 6,956.00 2.0% 1.1% 579.67 3,785.93

13 Prof essional Promotion 0.0% 0.3% - 1,032.53

14 Automobile 0.0% 0.7% - 2,409.23

15 Business Prof essional Fees 3,054.00 0.9% 2.2% 254.50 7,571.85

Payroll Taxes 15,289.00 4.4% 1,274.08

Other Taxes 1,493.00 0.4% 124.42

16 Total Taxes 16,782.00 4.9% 3.6% 1,398.50 12,390.30

17 Miscellaneous Expense 9,278.00 2.7% 1.4% 773.17 4,818.45

18 OVERHEAD 266,759.00 77.5% 60.0% 22,229.92 206,505.00

19 PROFI T 77,416.00 22.5% 40.0% 6,451.33 137,670.00

Dr. Sample

1997 Entire Year

20


1. Reimbursement 1. Reimbursement ProcessProcess

1. Reimbursement 1. Reimbursement ProcessProcess

3


To Evaluate ReimbursementTo Evaluate ReimbursementTo Evaluate ReimbursementTo Evaluate Reimbursement• Find out what you are doing

• What you are getting paid

• If not or not enough why

• Either way, correct it


Top 10 Services

Charges Percentage

1 99213 $170,610 32%2 99212 $82,192 15%3 99231 $50,967 10%4 Capitation $42,345 8%5 99222 $23,870 4%6 99211 $21,320 4%7 36415 $11,596 2%8 99283 $9,545 2%9 90659 $9,435 2%

10 85610 $9,144 2%$431,024 81%

9What Are You What Are You

Doing?Doing?


What Are You What Are You Getting PaidGetting Paid

Top 10 Code Fees Analysis

Description Current Medicare BCBS PPO Aetna1 99213 Level 3 OV 55 50 $44.40 $652 99212 Level 2 OV 42 36 $25.00 $553 99231 Level 1 H F/U 63 33 $52.23 $704 Capitation Capitation Capitation Capitation Capitation Capitation5 99222 Level 2 Admit 155 108 $105.01 $1256 99211 Level 1 OV 26 20 $18.32 $307 36415 Venipuncture 13 3 $5.67 $208 99283 Level 3 ER 115 59 $60.12 $1109 90659 Flu 15 Internet $12.43 $20

10 85610 Protime 18 13 $7.83 $16

10


Are You Doing Are You Doing EverythingEverything Right? Right?

Is Is AnythingAnything Missing From Your Missing From Your

List?List?


Top 10 Services

Charges Percentage

1 99213 $170,610 32%2 99212 $82,192 15%3 99231 $50,967 10%4 Capitation $42,345 8%5 99222 $23,870 4%6 99211 $21,320 4%7 36415 $11,596 2%8 99283 $9,545 2%9 90659 $9,435 2%

10 85610 $9,144 2%$431,024 81%

9


Comparative Profile Analysis ########

Physician: Dr. Sample - 1 YearSpecialty: Internal Medicine Locality: GA - Atlanta

CPT Code Qty Billed

Total Dollar

AllowanceRedistributed

Frequency

Redistributed Dollar

Allowance Net ChangePhysician

PercentagePeer

Percentage99211 823 $16,968 257.48 $5,309 $11,660 14.02% 4.39%99212 1,872 $65,642 662.08 $23,216 $42,426 31.90% 11.28%99213 3,104 $149,271 3,403.29 $163,664 ($14,393) 52.89% 57.99%99214 70 $5,186 1,259.02 $93,280 ($88,094) 1.19% 21.45%99215 0 $0 287.12 $31,702 ($31,702) 0.00% 4.89%

5,869 $237,067 5,869 $317,171 ($80,104) 100% 100%

HCCA Inc. Confidential Page 2

Take Control

0%20%40%60%80%

100%

99211 99212 99213 99214 99215

Established Patient Visits

Frequency Comparison

Dr. Sample - 1 Year Peer Average




CPT Code Qty Billed

Total Dollar


Frequency



PercentagePeer

Percentage99231 809 $29,435 270.51 $9,842 $19,593 90.70% 30.33%99232 69 $3,913 459.63 $26,068 ($22,155) 7.74% 51.53%99233 14 $1,116 161.86 $12,900 ($11,784) 1.57% 18.15%

892 $34,464 892 $48,810 ($14,346) 100% 100%


Take Control

0%

50%

100%

99231 99232 99233

Subsequent Hospital Care






CPT Code Qty Billed

Total Dollar


Frequency



PercentagePeer

Percentage99221 25 $1,781 9.96 $709 $1,071 12.69% 5.05%99222 154 $18,048 68.55 $8,034 $10,015 78.17% 34.80%99223 18 $2,821 118.49 $18,573 ($15,752) 9.14% 60.15%

197 $22,650 197 $27,316 ($4,666) 100% 100%


Take Control

0%

50%

100%

99221 99222 99223

Initial Hospital Care




Don’t overlook ANY POSSIBLE source of

legitimate revenue


To Evaluate ReimbursementTo Evaluate ReimbursementTo Evaluate ReimbursementTo Evaluate Reimbursement• Find out what you are doing

• What you are getting paid

• If not or not enough why

• Either way, correct it


2. Reducing Denials2. Reducing Denials2. Reducing Denials2. Reducing Denials

4


Reducing DenialsReducing DenialsReducing DenialsReducing Denials• Your staff hates working denials

• Working denials costs you PROFIT

• Denial reports should be mandatory

• When you find something wrong, fix it


NearlyNearly

Of all claims are returned Of all claims are returned because of missing information because of missing information

of CMS 1500 formof CMS 1500 form


Usually a claim Usually a claim fails to fails to passpass a computer a computer

editedit


Top 6 DenialsTop 6 DenialsTop 6 DenialsTop 6 Denials

Duplicate Charge - Processed / Processing Not Medically Necessary Patient not Identified Code No Longer Recognized Incomplete CLIA Number Information Does Not Support Number

of Services Provided


Weekly Denial Report

Patient Code Denial Code Description Resolution 14 Joe 85610 C0-B7 Provider not certified W/O 6 Robert 80061 C0-50 Not medically necessary Correct ICD-9 Code 12 Helen 90772 C0-97 Bundled Re-file with –25 16 Will 81002 C0-50 Not medically necessary Correct ICD-9 Code 22 Pat G0101 PR-49 Routine screening Correct ICD-9 Code 28 George 99244 C0-16 Lacks information Re-file with UPIN 7 8 9 10

Total Number of Denials for Week – 15 Total Number of Services Received – 200 Total Denial Percentage for this week: - 15 / 200 = 8%

10


Reducing DenialsReducing DenialsReducing DenialsReducing Denials• Your staff hates working denials

• Working denials costs you PROFIT

• Denial reports should be mandatory

• When you find something wrong, fix it


3. Revenue, Collection, and 3. Revenue, Collection, and Overhead RatiosOverhead Ratios

3. Revenue, Collection, and 3. Revenue, Collection, and Overhead RatiosOverhead Ratios

6


RatiosRatiosRatiosRatios• Establish Goals• Work to meet goals• Monthly physician meetings are to be

mandatory• When you find something is wrong, fix it


Revenue, Collections & OverheadRevenue, Collections & OverheadRevenue, Collections & OverheadRevenue, Collections & Overhead

You Need 5 Pieces of Information Total Charges, Adjustments, Receipts,

Aged A/R, and a Financial Statement Collection Ratios - Gross & Net Office Overhead and Profit Percentage Months in A/R


Establish Establish Practice Goals Practice Goals

to Measure to Measure SuccessSuccess


ChargesCharges

ReceiptsReceipts

$575,831$575,831

$348,668$348,668

$348,668$348,668

$575,831$575,83112


Charges - AdjustmentsCharges - Adjustments

ReceiptsReceipts

$575,831 - $205,421$575,831 - $205,421

$348,668$348,668

$348,668$348,668

$370,410=$370,410=12


Be very careful about Be very careful about staff makingstaff making

Be very careful about Be very careful about staff makingstaff making



GROSS CHARGES

ADJ USTMENTS

RECEI PTS 344,175.00 100% 100% 28,681.25 344,175.00

-

1 Total Salaries 132,642.00 38.5% 24.0% 11,053.50 82,602.00






4 Total Supplies 23,888.00 6.9% 6.4% 1,990.67 22,027.20

Rent 37,777.00 11.0% 3,148.08

Utilities 0.0% -

J anitorial 0.0% -




6 Telephone 1,832.00 0.5% 1.8% 152.67 6,195.15

7 Advertising 802.00 0.2% 0.2% 66.83 688.35








10 Equipment Total 16,118.00 4.7% 2.4% 1,343.17 8,260.20

11 Billing Service - 0.0% 0.8% - 2,753.40

Dues/ J ournals 3,794.00 1.1% 316.17




14 Automobile 0.0% 0.7% - 2,409.23


Payroll Taxes 15,289.00 4.4% 1,274.08

Other Taxes 1,493.00 0.4% 124.42

16 Total Taxes 16,782.00 4.9% 3.6% 1,398.50 12,390.30


18 OVERHEAD 266,759.00 77.5% 60.0% 22,229.92 206,505.00

19 PROFI T 77,416.00 22.5% 40.0% 6,451.33 137,670.00

Dr. Sample

1997 Entire Year

Financial Information

20


High OverheadHigh OverheadHigh OverheadHigh Overhead

Low Revenue Poor Management High Staff Salaries Poor Contracts Lack of Budgeting

20


RatiosRatiosRatiosRatios• Establish Goals• Work to meet goals• Monthly physician meetings are to be

mandatory• When you find something is wrong, fix it


4. Accounts Receivable4. Accounts Receivable4. Accounts Receivable4. Accounts Receivable

8


““Every dollar you earn, but Every dollar you earn, but fail to collect, is a fail to collect, is a costcost to to

your practice.”your practice.”

““Every dollar you earn, but Every dollar you earn, but fail to collect, is a fail to collect, is a costcost to to

your practice.”your practice.”


A/R BalanceA/R Balance

Average Monthly ChargesAverage Monthly Charges$91,101$91,101

$47,985$47,985

$91,101$91,101

$47,985 =$47,985 =12


Days Totals Actual Goal0-30 42,636.00$ 47% 50%

30-60 6,541.00$ 7% 20%60-90 4,424.00$ 5% 12%90-120 5,510.00$ 6% 10%120+ 31,989.00$ 35% 8%

91,101.00$ 100% 100%

TOTAL A/R


What’s a Dollar Worth?What’s a Dollar Worth?What’s a Dollar Worth?What’s a Dollar Worth?

$0.00$0.10$0.20$0.30$0.40

$0.50$0.60$0.70$0.80$0.90$1.00

0-30 31-60 61-90 91-120 121-150 >150

Worth

US Department of US Department of CommerceCommerce


What is A/R Worth?What is A/R Worth?What is A/R Worth?What is A/R Worth?

0-30 days

31-60 days

61-90 days

91-120 days

120 + days

$42,636

$6,542

$4,424

$5,510

$31,989

$91,101$91,101


What is A/R Worth?What is A/R Worth?What is A/R Worth?What is A/R Worth?

0-30 days

31-60 days

61-90 days

91-120 days

121 + days

$42,636

$5,887

$3,539

$3,857

$12,795

$15,987

$42,636

$6,542

$4,424

$5,510

$31,989


5. Just Do It!!5. Just Do It!!5. Just Do It!!5. Just Do It!!


Revenue Revenue -- Overhead Overhead ==

ProfitProfit


Cuts Expenses & Codes & Collects

The Same


GROSS CHARGES

ADJ USTMENTS

RECEI PTS 344,175.00 100% 100% 28,681.25 344,175.00

-

1 Total Salaries 132,642.00 38.5% 24.0% 11,053.50 82,602.00






4 Total Supplies 23,888.00 6.9% 6.4% 1,990.67 22,027.20

Rent 37,777.00 11.0% 3,148.08

Utilities 0.0% -

J anitorial 0.0% -




6 Telephone 1,832.00 0.5% 1.8% 152.67 6,195.15

7 Advertising 802.00 0.2% 0.2% 66.83 688.35








10 Equipment Total 16,118.00 4.7% 2.4% 1,343.17 8,260.20

11 Billing Service - 0.0% 0.8% - 2,753.40

Dues/ J ournals 3,794.00 1.1% 316.17




14 Automobile 0.0% 0.7% - 2,409.23


Payroll Taxes 15,289.00 4.4% 1,274.08

Other Taxes 1,493.00 0.4% 124.42

16 Total Taxes 16,782.00 4.9% 3.6% 1,398.50 12,390.30


18 OVERHEAD 266,759.00 77.5% 60.0% 22,229.92 206,505.00

19 PROFI T 77,416.00 22.5% 40.0% 6,451.33 137,670.00

Dr. Sample

1997 Entire Year

20



GROSS CHARGES

ADJ USTMENTS

RECEI PTS 444,000.00 100% 100% 37,000.00 444,000.00

-

1 Total Salaries 132,642.00 29.9% 24.0% 11,053.50 106,560.00






4 Total Supplies 23,888.00 5.4% 6.4% 1,990.67 28,416.00

Rent 37,777.00 8.5% 3,148.08

Utilities 0.0% -

J anitorial 0.0% -




6 Telephone 1,832.00 0.4% 1.8% 152.67 7,992.00

7 Advertising 802.00 0.2% 0.2% 66.83 888.00








10 Equipment Total 16,118.00 3.6% 2.4% 1,343.17 10,656.00

11 Billing Service - 0.0% 0.8% - 3,552.00

Dues/ J ournals 3,794.00 0.9% 316.17




14 Automobile 0.0% 0.7% - 3,108.00


Payroll Taxes 15,289.00 3.4% 1,274.08

Other Taxes 1,493.00 0.3% 124.42

16 Total Taxes 16,782.00 3.8% 3.6% 1,398.50 15,984.00


18 OVERHEAD 266,759.00 60.1% 60.0% 22,229.92 266,400.00

19 PROFI T 177,241.00 39.9% 40.0% 14,770.08 177,600.00

Dr. Sample

1997 Entire Year

Doesn’t Cut Expenses But

Codes & Collects

Appropriately

21


Think About ThisThink About ThisThink About ThisThink About ThisOn the financial statement, there are more

than 30 lines showing us how we spend our money. However, there is only one line that

focuses on how much we make. To me, that’s the most important number on the financial report, yet nobody acts like they

know how it is to be addressed.

Now You Do!


Work Smarter, Not HarderWork Smarter, Not HarderWork Smarter, Not HarderWork Smarter, Not Harder

Because . . .

50% Overhead (average practice)With a

5% Increase in RevenueOr a

5% Reduction in ExpensesWill result in

10% Gain in Your Salary


If All Else Fails, One Pill, That’s If All Else Fails, One Pill, That’s All…All…If All Else Fails, One Pill, That’s If All Else Fails, One Pill, That’s All…All…


Any Questions

Office: 888.624.6474

Direct: 770.241.4344

E-Fax: 404-848-8661

E-mail: [email protected]

Facebook: facebook.com/people/Steven-Adams/1154124331

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