How to Boost Your Medical Practice Revenue

This year's MGMA conference in San Antonio offers several sessions on how practices can boost revenue. It's a critical issue as reimbursement continues to decline and practices are forced to do more, with less.

To help provide some tips for how physicians and practices can thrive in this unstable environment, Physicians Practice spoke with two of this year's MGMA presenters. Both will be conducting sessions that include key revenue boosting tips.

Pimmie R. Lopez, MBA, FACHE, is president of Practice Colleagues, LLC. He provides operational leadership and consulting services to independent and hospital-owned medical groups throughout the country. He has also served as the senior executive of medical groups
in primary-care, specialty-care, and hospital-based specialties. He's known for his unique expertise in financial turnarounds, organizational development, and the strategic alignment of medical groups in urban and rural markets.

Lopez will be co-presenting session B6: How Physicians can Save Time, See More Patients and Improve Practice Revenue with family physician Daniel Konold on Monday, October 22,
at 1:30 p.m.

Sarah J. Holt, PhD, FACMPE, is a medical practice executive in several healthcare organizations. She teaches graduate level university classes in healthcare administration at Saint Louis University in Missouri, and she teaches healthcare policy, management, and reimbursement in the MBA program at Southeast Missouri State University. She also authors and facilitates online classes for MGMA and speaks nationally on healthcare management topics to physicians, management, and staff.

Holt will be presenting session A10: Financial Resilience in Uncertain Times on Monday, October 22, at 10:15 a.m. She will also be presenting session E14: The Pros and Cons of Franchise Medicine on Tuesday, October 23, at 1:45 p.m.

Physicians Practice: What type of revenue gains or losses do you think most small- to medium-sized practices will experience this year?

Lopez: Small and medium practices are at risk of reduced revenue in coming years unless they begin preparing for "value-based" reimbursement. While insurers are already providing incentives and bonuses to providers for achieving quality targets and improved clinical outcomes, it's likely that the achievement of such targets will become an increasing requirement for payer reimbursement. Medicare also intends to reward groups of providers that have formed accountable care organizations (ACOs) based on their effectiveness in improving the health of their Medicare patients and for related cost reductions.

Practices that adopt provider compensation plans that include nonproductivity-based criteria will be better positioned for value-based reimbursement. Some practices already include patient satisfaction ratings, cost containment, and quality outcome criteria in their provider compensation plans. It's reasonable to assume that payers will have different versions of value-based reimbursement models. Unlike fee-for-service and managed-care plans, the value-based model will primarily focus on improved quality of care at a lesser cost. However, rather than waiting for imposed changes and having to conform to them, practices would do well to partner with payers early in the development process to provide essential input in value-based plans that'll surely affect their future reimbursement.

Holt: Revenue cycle improvement requires constant focus. The practices that study revenue cycle issues assess their own organization, implement changes for improvement, and focus consistently on monitoring the revenue cycle. Those organizations will have gains.

Gains will be small at first but as processes are honed, gains will improve. Those organizations that have not done the assessment and evaluation will have losses in this environment. As revenue tightens, a total understanding of and focus on the issues is required.

Physicians Practice: What are your top two recommendations for how a practice can improve revenue?

Lopez: While there are many opportunities for a practice to improve its revenue, in today's environment I find the best opportunities for revenue improvement include: A., enhanced physician production, and B., improved practice efficiencies. National studies estimate the cost for waste and inefficiencies in healthcare expenditures to be as much as 30 percent. Clinical services accounts for one of three principal areas of this staggering waste. This figure comes as no surprise to me after witnessing extreme variations in the operational processes and efficiencies of hundreds of practices throughout the country, including practices within the same medical group.

Because of my exposure to medical groups on such a large scale, I've been able to identify common differences between high- and average-performing practices. However, the most glaring difference is that high-performing practices are far more structured, with highly-refined patient flow processes in place that enable their physicians to work much more efficiently. Surprisingly, I've not found the staff in these high-performing practices to necessarily be any more prepared or harder working than staff in average performing practices. Nevertheless, they're trained and expected to closely follow well-defined practice regimens.

Holt: First, my top recommendation for how practices can improve revenue is to create an environment of understanding that everyone in the organization is responsible for revenue. For example, when physicians miss charges, nurses fail to have patients sign an ABN, precertification does not occur, or the front desk enters insurance incorrectly, all these things impact the revenue cycle in a negative way. When everyone in the organization recognizes the role they play and concedes that the revenue cycle is not just the responsibility of the insurance department, revenue will improve.

Second, the recommendation is for practice executives to take a real, concerted interest in the work of the insurance department. Insurance staff members tend to be tucked away from the rest of the organization. That isolation fosters one of the main characteristics of insurance staff - to act with autonomy. When practice executives become involved with insurance staff members by holding regular meetings, insurance staff members respond by taking on more responsibility once they have the goals of the practice clearly articulated by the practice executive.

Physicians Practice: What is the easiest revenue boosting opportunity that you think many practices miss out on?

Lopez: A sure way to increase practice revenue is through improved provider coding. I repeatedly see this single activity raising provider revenue by as much as 20 percent or more, even without any increase to patient volume. Whether it's because of inadequate coding knowledge or conservative coding practices, potential provider revenue is unnecessarily left on the table. A practice can easily determine a provider's coding ratio simply by dividing his total Work RVUs by his total encounters. The resulting ratio can then be compared to the specialty data available in MGMA's Annual Physician Compensation and Production Survey.

Given the numerous intricacies of coding, it's incumbent upon practices to ensure that coding instruction be made available to providers on a regular basis. Too often providers go for extended periods of time before receiving needed coding instruction and updates. I've found that the frequency of coding instruction varies widely among practices. However, shorter but more frequent education intervals appear to be the most effective for sustained coding improvement by providers. Setting aside 10 to 12 minutes in a monthly provider meeting for coding instruction and updates is a practical way of accomplishing this.

Holt: Many practices fail to set expectations with patients about their financial obligations to the organization. Financial expectations should be communicated clearly with every new patient so that they are aware of their obligations to the organization before services are rendered. The areas that should be focused on are unmet deductibles and coinsurance. When patients have unmet deductibles each patient should be informed about the amount remaining on their deductible and the organization must make a decision about how to collect that amount. I suggest that before scheduling an expensive service that the patient be required to remit at least a portion of the deductible with a plan to pay the rest.

Coinsurance has become increasingly difficult to collect. Many patients feel that because they pay high premiums, have a high deductible, and pay their copay that their insurance should cover the rest of their services. Patients fail to understand that they owe a coinsurance after insurance has paid. The increase in premiums and deductibles have caused patients to be reluctant to take responsibility for the remaining portion of their account after insurance has paid. An initial conversation with new patients explaining financial expectation/obligations can avoid difficulty in collecting coinsurance and tamp down dissatisfaction from patients.

Physicians Practice: What is a common mistake that practices make that harms their overall revenue?

Lopez: The most common mistake that I see in practices is scheduling inefficiencies. This includes late provider arrivals, overabundance of same-day appointments, excessive appointment durations, unmanaged no-show frequency, no adjustment for seasonal-volume variations, inadequate planning for peak demand cycles, excessive provider staffing, overly customized provider schedules and needless downtime (e.g., excessive lunch timeframes, allowing meetings to cut into patient-care time, simultaneous scheduled time off by providers, etc.). The extent of harm to a practice's revenue is indeed proportional to the number of its scheduling inefficiencies. While it's difficult to quantify the actual cost of these inefficiencies, they're nevertheless representative of the estimated 30 percent waste and inefficiencies in the healthcare delivery system.

Conversely, financially successful practices are highly committed to the maintenance of efficient scheduling processes and readily understand the connection to their bottom line. Management and providers work collaboratively to refine each step in the scheduling process not only to maximize provider production, but to enable the very best patient experience. They're attentive to fluctuating patient volumes and plan work schedules accordingly. In one Midwest practice, I recall the providers electing not to take time off during the peak volume months to ensure their availability to their patients and to maintain optimal production. Given the extraordinary cost of operations, practices should continually look at their scheduling processes to realize even greater revenue potential.

Holt: One of the most common mistakes that practices make that harms their overall revenue collection is inadequate training at the front desk. Front-desk employees should be well-versed in insurance rules and know the common types of insurances in the area. Often front-desk employees are not trained to read and understand insurance cards and insurance carriers' requirement relating to how the information is to be submitted to the carrier.

When front-desk staff members enter wrong information in the practice management system, the insurance department must spend their valuable time correcting mistakes that should not exist. Many insurance-department staff members report that they spend most of their time correcting errors generated by the front-desk staff members. When front-desk staff is trained properly, then insurance staff can use their time appealing claims that have been paid incorrectly and generate greater revenue for the practice.