It’s clear due to the multiple changes in the healthcare industry that financial pressures are more prevalent than ever— with the Affordable Care Act, ICD-10 implementation, and EHRs, to name a few. The benefits that practices are receiving and being reimbursed for are on the decline, and operating costs are quite the opposite.
Many physicians may be asking: “Why is my medical practice struggling?” The expectation of revenue is stretching everyone in the office thin, including doctors and staff. It may sometimes seem like you’re trying to scrape by rather than get ahead due to all that is required to be done in a day. Make sure to look out for these warning signs in your practice that may offer further insight as to why you may be financially struggling (they may not be what you expect):
A commonplace phrase is “a practice is only as good as its staff.” One of the biggest obstacles to consider is how you and your staff dynamic are being affected by the recent healthcare reform. Are their salaries being frozen or cut, while simultaneously being expected to work harder? That’s more work with less reward.
Staff may leave or become overwhelmed at the struggles the practice is experiencing, and the risk of employee turnover can occur. This can be detrimental to a practice that is already in a financial tug-of-war since the time to hire and train new employees can add to the burden and workload of everyone.
While you may not be able to alleviate these problems, you can offer other incentives to keep their productivity and morale high and retain your staff:
Don’t treat your practice like a top-to-bottom hierarchy, where you’re a tyrant. Treat your staff with respect; they are all contributing pieces to maintaining a well-oiled practice working at its best
Ask for their opinion at meetings, and let them know they are appreciated when they do a good job and take the initiative if someone is out sick or otherwise
Be flexible and offer freedom – offering work-from-home opportunities as a reward or longer lunch privileges can be a great way to give your employees breathing room from the workload and come back refreshed and revitalized
According to the Practice Profitability Index (PPI), 60% of the negative impacts on practice profitability revolve around declining reimbursement. There is no denying the amount of Medicare beneficiaries is increasing: according to the US Census Bureau, by 2012, 15.7% of people were covered under Medicare in the United States.
This increase, coupled with CMS’s constantly changing regulations and penalties that go with not properly abiding by Meaningful Use Stage 2 (MU2) and not participating in PQRS submission, has the potential to gradually cripple a practice financially if there are a large amount of Medicare patients. There’s more to this, of course, especially when it comes to ICD-10 and the impending flux of denied claims that will be happening, as well, causing further delays in reimbursement.
If this is happening in your practice, talk with your office manager, and figure out a solution that can be put into effect. This involves many things, but can include prepping for ICD-10 and minimizing denied claims, analyzing your office’s productivity, and figuring out whether you may need a new EHR or not. This segues right into our next indicator as to why your office may be financially struggling.
Your EHR Efficiency
Is your Electronic Health Record (EHR) doing what it is supposed to do, at an optimum capacity? Does your staff utilize its abilities and configuration easily? Do you? If you answered “no” to any of these questions, it may be wise to look into a better system. By taking longer with paperwork, this places more financial pressures on paying for overtime and losing precious time on navigation issues.
The PPI reports that 13% of practices intend to replace their EHR this year; among the highest is 31% due to usability. PPI research also shows a mere 52% of physicians with an EHR are certain as to whether they are eligible for MU2 incentive payments for 2014. Many EHR vendors do not possess Stage 2 certification, which leaves more financial pressures for physicians when trying to be a successful participant in the EHR incentives program.
Read more about Meaningful Use and CMS programs here.
Revenue Cycle Management (RCM)
When was the last time you evaluated your RCM? This is the process from the moment an appointment is scheduled with a patient to the moment of reimbursement for services rendered. There may be a lagging Accounts Receivables (A/R) report for delinquent payments, or maybe there is an issue with a payer for your claims that were submitted previously.
Either way, it is important your framework for getting paid is solid, that way you can face the financial struggles with organization and planning. Make it easy to get paid: offer your patients convenience with the ability to pay online or with their cell phones. Also, accept co-payments and deductibles at the time of service to avoid having to delay getting paid. By making a cycle to send notices for payments on a constant basis and not once a month, you can also increase your ability to get reimbursed by your patients and stray away from financial struggles with them.
Find out more facts about your RCM and how it can improve here.
It is unavoidable that your practice is going to face financial pressures from all angles: from CMS to patient reimbursement. All of these are on the decline, and the costs to maintain operating costs with EHRs and IT software isn’t getting any cheaper. Don’t fall victim to these problems, and make sure you face these challenges with strategies to empower your staff with the best tools and teamwork possible in order to succeed.