Quick Practice Evaluation
Take your yearly or monthly patient visits and divide this number by your total costs for that same period. This will give a rough number as to what it cost you to see those patients. There will obviously be procedures that drive the cost up but those procedures should likewise increase the revenue. This is a basic cost over revenue analysis which can give you a quick snapshot of your practice.
What is your operating cost percentage over revenue? 50% or 60%. Are you happy with this number? Do you know how to improve it and what should be expected for a practice like yours?
These are all questions that your administrator is constantly asking and evaluating. There are ALWAYS ways to improve your practice but most of the time everyone is too busy to actually do the things that offer real financial or practice improvement.
What is a good number? What if you could increase revenue by 10%? Would this help your practice?
There are many ways to improve your bottom line but few will provide the results of renegotiating your insurance contracts. This may sound foreign to you but this is an often overlooked duty of a practice manager. Unfortunately, most offices are understaffed and overworked which makes the time requirements of this project next to impossible. You can expect to spend an average of 20 hours per week in meetings, on phone calls and researching the market. The process does not happen overnight but will yield a significant return on your investment. We recommend utilizing an experienced firm that understands the insurance industry and has proven results.
A good firm will typically bring in an additional 7%-20% in insurance revenue. The amount of the increase depends on the specialty, the area, and the size of the group more than anything else. You can spend 100k on renegotiation efforts but if you are in a saturated market with little to no real market share, you cannot expect a whole lot. oftentimes, in this situation you won’t come away with huge increases but will instead come away with a larger payer population which still yields an increase in revenue.
We recommend you speak with the specialists at http://PhysicianCredentialingServices.com
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Coming from over 15 years of billing and collections background, I have a good understanding of receivables management – - however, admittedly know little about “Medical Billing”….
As I am currently looking to acquire a Medical Billing company, I have concerns where the industry is or may go with never-ending changes the insurance world. Especially with the new Changing of the Guard – - Obama- – soon coming to office, I expect there will be many changes in many different areas.
More specifically, my question is to all of the BLOGGERS…. what are the downfalls that may soon come to the Medical Billing industry that can dramatically change the climate of the business (for example, what SUB PRIME ultimately did to the Mortgage industry). I am trying to further ensure this business is here to STAY and/or what risks there are with what may soon come down the pike interms of technology, Insurance carriers, government, etc…
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