The inability to meet monthly financial obligations is often the shrill siren that finally captures the attention of physicians and alerts them that their medical practice is ailing. By the time they heed the alarm, their practice may be in a deep financial crisis.

Many early symptoms of impending financial doom are ignored or not even noticed. Often these warning signs do not raise concern at first glance. However, when thoughtfully examined, they are important indications that some basic procedures and processes need attention to head off financial trouble.


Walk through the medical office.

Look around. Are patient medical records/charts stacked up on workstations throughout the facility? This is the first warning sign of operational inefficiency.

Why are stacked charts problematic? Generally, a patient chart is pulled the day before a visit and a fee ticket is attached. Missing charts can result in missing fee tickets and charges. Stacked up charts can indicate missing dictation, which means overlooked or delayed charges. Charts on desks are not readily available for replying to phone calls or correspondence. Inefficiencies in the control of medical records create cost because of the unproductive use of staff and resources.



Listen.

How many calls are put on hold because staff doesn’t have time to answer telephones? Inefficient processes for handling telephone calls creates the need for more staff. Unanswered calls may cause delay in receiving payments and will certainly damage patient, colleague and vendor relations. Bottom-line? Cash flow problems.



Sit in the waiting room.

What is the atmosphere? Is it frantic, confused and out of control? Frequently, too many staff are situated at the front desk, staff that do not have responsibilities that coordinate with front desk functions. Phones are ringing, papers are flying, and people are talking loudly across the room. Are patients standing due to overcrowding? Or is the waiting room an organized, comfortable place that can have a calming effect on the apprehensive patient? A bad waiting room environment may cause a patient to leave or never come back. It’s another financial warning sign.



Take a look at how the office is organized.

Front desk staffers responsible for appointment scheduling, check in and check out are located in the reception area and supervised by the office manager. Billing and collection staffers are located in the reception area and supervised by the manager of finance. However, if the two groups never communicate or coordinate, it’s another financial red flag.

A separation of responsibilities and lack of communication between front desk and billing staff always results in a loss of revenue and increased costs. Processes must be in place to assure coordination of essential activities including accumulation of correct patient demographics, coding and charge input, co-pay posting to accounts, and communication of denials.

Who handles the financial functions of the practice? Do practice managers/physicians receive daily, weekly and monthly reports that provide the information needed to prevent a financial crisis? Physicians must know their practice. Physicians generally know how many patients they see; however, they don’t always know how patient visits translate into financial results.

There are several critical performance measures that must be reviewed on a regular basis because they can be early warning signs of financial problems.

• Patient Visits. How many patients are seen and what are the associated charges? Are the patients new or established? Was the patient encounter a consultation or a hospital visit?

• Procedures. Were they conducted in the office or in the hospital?

• Charges. What were the gross charges and over the counter payments generated by the patient visits? This information should be generated and reviewed weekly, month-to-date and year-to-date.

• Gross collections. How are charges translating into collections? Information should be monitored weekly and month-to-date and compared by month.

• Payor Mix. How much cash should the practice collect based on annual gross charges and payor mix?

Ask questions.

If charges are lower than normal for any given month, find out why. Reductions in charges could be a result of some of the identified inefficient processes. Charges should be entered daily to create a consistent filing of claims and, subsequently, a consistent cash flow.

Inadequate financial reporting, uncoordinated administrative processes and lack of knowledge are always factors leading to a financial crisis. After the walk around the medical office, make necessary changes. Involve staff in challenging the status quo. Get those charts in the chart room. Reduce activities at the front desk to create a welcoming and soothing environment. Work with professional advisors as a team to create the reports that can identify symptoms of financial ailments in time to take action.



Sara S. Lankford, CPA, a principal at Nashville accounting firm Carter, Lankford CPAs, PC, can be contacted at sara.lankford@clcpas.com.




September 2007

Tags:

Related:

Bookmark:

Digg

Facebook

Technorati

Newsvine

Google