Efficiency and profitability is becoming increasingly important for orthopedic surgeons wishing to remain independent from hospitals. "Fifteen years ago, surgeons could make pretty good money even if they weren't efficient," says Kevin Weinstein, vice president of marketing at ZirMed, a company focused on reimbursement solutions, patient payment solutions and revenue cycle management. "Reality is, with declining reimbursements and rising costs, you don't have that margin of error anymore. If you're not a well-run practice, you're in trouble."
Mr. Weinstein discusses three ways practices can increase efficiencies in revenue cycle management.
1. Analyze practice data. Analyze the different procedures practice physicians perform to understand what financially drives the business. Figure out at the cost-accounting level which procedures, physicians and hospital locations are more profitable than others. "There might be a large ticket item that brings in a high reimbursement, but maybe a smaller ticket item is less costly," says Mr. Weinstein. "Physicians might want to specialize in those procedures to increase profitability." Additionally, you can use this information during payor contract negotiations.
2. Know your payor mix. Figure out how much of the business is covered by each payor. Then, line up the payors and calculate denial rates, contractual pricing rates and the actual reimbursement rate you are receiving from them as well as the amount of time it takes to receive reimbursement. "You might find that your best payor who pays you in the shortest amount of time might deny half your claims," says Mr. Weinstein.
3. Send patient bills out immediately and check up on them often. After the patients see their physicians, the billing charges are submitted and entered into the system, processed into billing claims and then submitted to payors so they can process the claim. This system allows time for the physician's office to calculate how much of the bill the patient's responsibility is. This process takes about 20 days on average, and if the claim is received back on the first of the month but the practice doesn't run patient billing statements until the 30th, that leaves four full weeks before the statement is even mailed to the patient. Mr. Weinstein suggests high patient responsibility practices send out the statements two to four times per month.
Additionally, don't be afraid to send billing statements early and often. If the patient hasn't made a payment, don't feel bashful about sending out a second bill before the first 30 days are up.
Learn more about ZirMed.
Read other coverage on revenue cycle management:
- 4 Technologies to Improve Orthopedic Practice Revenue Cycle Management
- 7 Steps to Improve the Financial Performance of Orthopedic Practices
Mr. Weinstein discusses three ways practices can increase efficiencies in revenue cycle management.
1. Analyze practice data. Analyze the different procedures practice physicians perform to understand what financially drives the business. Figure out at the cost-accounting level which procedures, physicians and hospital locations are more profitable than others. "There might be a large ticket item that brings in a high reimbursement, but maybe a smaller ticket item is less costly," says Mr. Weinstein. "Physicians might want to specialize in those procedures to increase profitability." Additionally, you can use this information during payor contract negotiations.
2. Know your payor mix. Figure out how much of the business is covered by each payor. Then, line up the payors and calculate denial rates, contractual pricing rates and the actual reimbursement rate you are receiving from them as well as the amount of time it takes to receive reimbursement. "You might find that your best payor who pays you in the shortest amount of time might deny half your claims," says Mr. Weinstein.
3. Send patient bills out immediately and check up on them often. After the patients see their physicians, the billing charges are submitted and entered into the system, processed into billing claims and then submitted to payors so they can process the claim. This system allows time for the physician's office to calculate how much of the bill the patient's responsibility is. This process takes about 20 days on average, and if the claim is received back on the first of the month but the practice doesn't run patient billing statements until the 30th, that leaves four full weeks before the statement is even mailed to the patient. Mr. Weinstein suggests high patient responsibility practices send out the statements two to four times per month.
Additionally, don't be afraid to send billing statements early and often. If the patient hasn't made a payment, don't feel bashful about sending out a second bill before the first 30 days are up.
Learn more about ZirMed.
Read other coverage on revenue cycle management:
- 4 Technologies to Improve Orthopedic Practice Revenue Cycle Management
- 7 Steps to Improve the Financial Performance of Orthopedic Practices