Want a Top-Performing Practice? Invest in Your Business Office

​A new report shows that physician practices that invest more in their business offices outperform their peers. But many smaller practices can't always afford to hire additional staff​.

What's the answer?

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Want a Top-Performing Practice? 
Invest in Your Business Office

Expanded Business Offices 
​Generate More Revenue

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A new report released by the Medical Group Management Association (MGMA) found that physician practices that invest more in their business offices outperform their peers.

Specifically, this investment resulted in:

• Substantially more medical revenue per physician
• Lower accounts receivable
• Better and faster collections (6% to 9% more during an account’s first 30 days) ​
  

MGMA’s analysis of more than 3,800 practices revealed that the top performers have an average of 20% more business office staff. The problem is, many medical practices —​ particularly smaller ones —​ cannot always afford to hire additional staff.  
So how can these practices expand their business office capabilities and become a top performer?

The Challenge of Getting Paid

Today’s healthcare providers face unique challenges when it comes to getting paid. Medical billing is complex and expensive, and the regulatory environment is continually changing. In-house billing and collections requires the average practice to hire at least one or two properly trained medical billers/coders for each insurance provider.

Not to mention the expenses associated with payroll, computer systems and software, record keeping, and staying current with billing and coding requirements.

Let's break this down further...

Staffing Costs
When calculating the cost of business office staff, you should consider the following expenses:

• Median salary for one or two staff members
• Healthcare/insurance benefits
• Federal and state taxes
• Training costs

• Additional office space required ​ ​

Are You Technically Challenged?

When deciding whether to keep your medical billing in house or to outsource it, consider the technical ability of yourself and your staff. In-house billing and coding requires an investment in practice management software, as well as frequent staff training. If you’d rather not deal with software upgrades and technical issues, outsourcing is probably the right move.

Collection Costs​
Collecting on accounts using in-house staff would also require the following expenditures: 

• Computer hardware costs
• Practice management software costs (about $200 per physician per month)
• Clearinghouse fees for direct-claim processing (about $100 per physician per month.

​Noncompliance Costs

The repercussions of noncompliance with regard to HIPAA, debt collection (e.g., FDCPA) regulations, and insurance protocols can be extremely costly. For example:

• The penalty for HIPPA violations can range from $100 to $50,000 per record. As of September 2020, the U.S. Office for Civil Rights (OCR) had settled or imposed penalties resulting in more than $128 million.​

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• In 2019, the Consumer Financial Protection Bureau was awarded more than $24.7 million in judgments for FDCPA violations.
• Submitting incorrect Medicare or Medicaid claims—even unintentionally--violates the federal False Claims Act (FCA). Penalties for violating the FCA can be three times the amount of the damages.

Does Your Practice Have High Staff Turnover?

Staff turnover in the healthcare industry is the second highest in the country (exceeded only by hospitality). For small or independent medical practices, turnover in the billing department, can be particularly damaging. Claims processing is the lifeblood of a practice. Changes within the billing team inevitably impair that processing. If your practice experiences frequent office staff turnover, you’ll want to consider outsourcing some or all of your back-office functions.

​Lost Revenue

The Department of Health and Human Services estimated that 42% of all Evaluation and Management (E/M) claims are coded incorrectly.

​Medical coding requires a huge amount of work, with billing codes and regulations continually changing. Small administrative errors here and there (missed information, duplicate billing, etc.) can result in denied claims and lost revenue.  

And then there is the revenue lost when providers fail to effectively collect on self-pay accounts. Did you know that more than 80% of self-pay revenue is generated by about 30% of self-pay accounts? Would your business office staff be able to identify and target the 30% who are likely to pay?

Extending the Business Office
So you want your medical practice to become a top performer, but you simply don’t have the financial and physical resources needed to adequately invest in your business office. What’s more, every year you’re losing revenue from denied claims and sloppy collection practices.

You need a revenue cycle expert who will partner with you to reduce overhead and generate more income. You need an EBO—an extension of your business office. You need Reliant Financial Services.  
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RFS is dedicated exclusively to healthcare financial management. When you partner with RFS, you can expect improved cash flow, reduced accounts receivable, and ensured compliance with governmental regulations.

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Sources:
Featured Image: Adobe, License Granted
RevCycle Intelligence
Software Advice
360 Connect
​PR Web