When we are called in to take over a PT Clinic’s Billing, it is often because the owner has had a revenue crisis. That is a horrible state to be in: decreasing revenue, bills mounting up, unable to pay bonuses or raises, worried about the ability to keep the doors open in a few months.
Usually these revenue crises happen because at least one person is not doing their job. Perhaps it’s the Billing Manager. It may be the Billing Company contact. Usually the front desk manager is also dropping some balls.
Before the crisis is really felt, there are some signs that it is coming.
It is really important to not ignore these indicators. I know, it can be difficult. To address these issues you will have to have tough conversations, spend some time to understand where things are falling apart and you will also need to have a contingency plan in place in case you decide to move in a different direction. Each of these are enough to make a busy PT owner procrastinate on the issue, hoping that things will get better by themselves.
But that never happens.
So don’t avoid the issue. Meet it head on and take action. The longer you wait, the harder the road will ultimately become. As a mentor of mine likes to say,
“Life is hard. But the harder you are on yourself, the easier life is on you.”
So do the hard thing now. It’s time to set your Revenue Cycle Management (RCM) straight. Here are some of the signs that you have a problem brewing. Act now before you get to crisis mode.
- Decreasing Revenue Per Visit
This can be a little tricky because it can be seasonal (the effect of deductibles) and subject to changing payment policies. However, if it has dropped you definitely want to know why.
- Lower Monthly Revenue Without Commensurate Lower Visits
This can also be seasonal, but certainly one to watch. Compare same month revenue year-to-year. If it is significantly lower or lower for more than one consecutive month, it may be time to take action.
- Feeling the Pinch
If you don’t have sufficiently accurate data to see if you have the first two indicators, this is usually a good alternative. Do you feel that you are moving more toward a paycheck-to-paycheck existence? Are you having a hard time putting money in savings? If that’s the case, then you should have someone help you analyze the numbers to see where the problem lies. Usually PT owners think, “I need more patients!” However it can be a bad payor mix or RCM problems instead. Both are relatively easier to fix.
- A/R and / or ARC Ratio is Growing
Usually this is a sign that your RCM has some deficiencies, caused by either people or processes. It may require an expert to help you sort out where the holes are in your RCM bucket. Be aware that it is possible for A/R to be shrinking and your RCM to still be poor. People can be very good at hiding their poor performance. Write offs, incorrect adjustments, incorrectly placing accounts in Collection are all ways that these numbers can be fudged.
- Patients are complaining
Health care billing can be confusing for patients and it is not necessarily odd that they complain about statements that they don’t understand. However, if you are noticing more patient complaints than normal, it could be a sign that someone in the process is not keeping up.
There are a number of other indicators that should prompt you to take a deeper look into your RCM. Those will usually require you to dig into your billing software. But if you are experiencing any of the issues above, it’s time to get some answers.
Act now before things have a chance to become worse.
We are here to help if you would like someone to dig in and find out where the problems lie.
The sooner you uncover the issues, the faster you will be back to financial health. Most importantly, it will keep you from experiencing a revenue crisis.