Increase Your Practice Yearly Revenue by $100,000 or More

1) On February 17th of 2009, President Obama Signed into law a $19 BILLION Stimulus Package called The American Reinvestment and Recovery Act (ARRA). $17 Billion of that money is to be distributed as Incentive Payments to Physicians, Hospitals, Nurse Practioners, and MidWives as a financial incentive for healthcare provider’s to convert their Paper Medical Records to Electronic format which is EMR (electronic medical records) or EHR (electronic health records). You can get this reimbursement from either Medicare OR Medicaid. The stimulus package would provide healthcare provider’s with $44K over a 5year period plus an additional 2% if the healthcare provider uses ePrescribing. Here’s the break-down:

If you demonstrate use of EMR or EHR by the year 2011 you will receive
$18k (2011), $12k (2012), $8k (2013), $4k (2014), $2k (2015)
Total: $44,000

If you demonstrate use of EMR or EHR by the year 2012 you will receive
$0 (2011), $18k (2012), $12k (2013), $8k (2014), $4k (2015), $2k (2016)
Total: $42,000

If you demonstrate use of EMR or EHR by the year 2013 you will receive
$0 (2011), $0 (2012), $15k (2013), $12k (2014), $8k (2015), $4k (2016)
Total: $39,000

If you demonstrate use of EMR or EHR by the year 2014 you will receive
$0 (2011), $0 (2012), $0 (2013), $12k (2014), $8k (2015), $4k (2016)
Total: $24,000

If you demonstrate use of EMR or EHR by the year 2015 or later you get $0 and:

Fee reductions: Providers who do not demonstrate meaningful use of an EHR by the end of 2014 will see, in their 2015 fee schedules from Medicare, a decrease of 1 percent. An
additional decrease will be affected in 2016 and 2017 down to a total of 97 percent of the
regular fee schedule. The Secretary of HHS can reduce the fee schedule even further, by a
maximum of 5 percent beginning in 2018, if the nationwide EHR adoption rate remains below
75 percent.


If you demonstrate use of ePrescribing by the year 2009 you will receive a
2% Incentive with no Penalty

If you demonstrate use of ePrescribing by the year 2010 you will receive a
2% Incentive with no Penalty

If you demonstrate use of ePrescribing by the year 2011 you will receive a
1% Incentive with no Penalty

If you demonstrate use of ePrescribing by the year 2012 you will receive a
1% Incentive and a 1% Penalty

If you demonstrate use of ePrescribing by the year 2013 you will receive a
0.5% Incentive and a 1.5% Penalty

If you demonstrate use of ePrescribing beyond the year 2013 you will receive
No Incentive and a 2% Penalty



Now here’s why this information is so important. If Medicare will penalize you for not utilizing EMR or EHR, you can best believe other carriers will follow.

Besides the reimbursements, this is really good news because Electronic Records will make your office more efficient which will increase productivity because your staff won’t be spending their time trying to run-down those paper files that always seems to get misplaced. Since you can dictate directly into the EMR or EHR Software, there’s no need for a transcription service anymore. You won’t need anyone to file those records anymore either, because all the information can be entered directly into the software and can be viewed with the click of a mouse. Also, you’ll save a considerable amount annually due to not having to buy all the stuff associated with those paper file folders. Without all those files taking up space, you could expand your practice by adding another examination room or maybe bringing another physician into the practice. The possibilities along with the amount of extra revenue are numerous. If you want to know more, please feel free to contact me.


2) Now let’s take a look at your Accounts Receivables. In particular, your accounts receivables in excess of 30-days or more. How much is out there? I’m willing to bet the amount is significant. Before I give any advice you’ll need to do a couple of calculations. First you’ll need to run 3 reports, if you use a billing service they might need to provide you with the numbers.

Run the reports for All Insurance Balances. Run the 1st A/R report for (31-60 days), run the 2nd for (61-90 days), and run the 3rd for (91-120 days). Now add all 3 balances and divide by 3, this will give you your monthly average. Now multiply your Monthly average by 12 and you can now see you’re missing out on a lot of revenue. If you can keep your Accounts Receivables to under 30-days (it can be done) your monthly average is the amount of Revenue you’d be adding to your practice each month times 12.

If you do your own billing there are several options available to you. The first is, you could hire an agency to come in and work with you, the only problem with that is they probably won’t provide a solution that will keep your Accounts Receivables under 30-days so they can keep you as a client. The second is, and very seldom do I recommend it, but you could factor/sell your Accounts Receivables for a small percentage which is a whole lot better than living with that large amount tied-up in the A/R. Or you can learn how to forensically analyze the A/R and pinpoint the activities that are slowing down your cash-flow.

If your billing is Out-sourced and your A/R is constantly over 30-days, you may want to consider transitioning your billing to in-house. There’ll be more revenue and you’ll save the cost of the billing service. There are Medical Billing and Coding Schools in nearly every major city as well as online. You could get some pretty-good competent help at very low costs because you are giving that new graduate experience. But be careful and be sure to provide good training or things could back-fire quickly. In addition, you could use your new found cash from your A/R to fund the transition to Electronic Medical or Health Records. The experts are saying, transition as soon as you can.

Once you add it all up, it’s quite easy to increase the revenue coming into your practice by $100,000. Bring the A/R down to 30-days, Converting to Electronic format and losing the transcription service along with the filing clerk, using ePrescribing, add another exam room or physician to the practice, and it’s definitely doable.

In The Name of The Father, Thank You and God Bless You All.
The Medical A/R Guru

An Easy Way to Calculate How Much Your A/R Is Costing You Yearly

Healthcare providers across the country are losing out on a significant amount of revenue yearly. A single provider with a small practice can lose out on $60K or more in a single year. Here, I will provide you with a simple way to calculate just how much revenue your practice may be losing out on.

With today's online submittal process, a clean claim is generally paid within 14-days. However, because some of your patient’s will have 2 or maybe 3 coverage’s you will not receive payment from one or all carriers within that 14 day time frame. So to make this process more practical, we can calculate for All Insurance balances over 30-days. It doesn't matter if you Bill In-house, or your Billing is outsourced, you can still do this calculation but you may have to have your billing service provide the numbers below.

First, you will need to run 3 reports on your Practice Management Software for (All) Insurance Balances. Run the 1st Report for (31-60days), then the 2nd for (61-90days), and the 3rd for (91-120days), then add all 3 balances, and divide by 3. This will give you your monthly average. Now multiply your monthly average times 12. Now you can see just how much revenue you’re operating without, not to mention Insurance Companies are making interest off that amount. Even if your A/R monthly average were a mere $5K, you’re losing out on $60K per year in revenue and we haven’t even calculated the amounts over 120 days, if applicable.

Now I’m sure you’re probably thinking “I have people working the A/R” as I am more than sure that is the case. However, just as fast as your people can resolve a claim, a new claim will take its place which is why your A/R never seems to be on the decline.

I’ve been informing providers for a long time that they do not have to live with so much revenue tied-up in their A/R. In reality, rarely should your A/R go over 30-days. Even if you paper-billed 3 carriers, it is totally realistic to receive final payment within 30-days. In 16 years I’ve never had an A/R I was assigned to go beyond 30 days.

Be proactive about your A/R and you’ll start to see that money coming back into your practice where it belongs. Best of luck to all of you.
MedicalArGuru

Medical A/R - Be ProActive and Watch it Fall

Show me an Insurance Carrier or TPA that will pay or reverse an overdue claim simply because someone inquired about it, and I’ll show you an Insurance Carrier or TPA you'll be having payment issues with in the very near future, not to mention, that company more than likely will not exist in a couple of years or will have exited that line of business altogether.


Time and time again, whenever a medical accounts receivable report is generated and ofcourse some action is going to be required; the very first act is to print the report and hand it to a rep who grabs their list of payer phone numbers and starts dialing away. Although not totally worthless, all that calling without preparation wastes more time than it does producing results, which often leads to employee frustration. Working the A/R report is a dreaded task for most back office personnel and is a direct contributor to Employee “Lack of Motivation” to the project, or even worst “Turnover” when the employee has a chance to jump ship and leave their unresolved claims issues for someone else to figure out.

Being Proactive is the key to reducing the "overall" amount of the accounts receivable. Unfortunately, traditional A/R reps have 2 basic and natural instincts when it comes to collections:
1. Get the money in the door as fast as I can!
2.Whatever needs to be done or corrected, do it quickly so I can achieve objective #1.

However, neither does any good at reducing the overall A/R, reason being, as fast as the rep works to get a claim out of the A/R, another one or possibly more will take its place ensuring that the A/R will remain at a high level. Being proactive is the only solution.

I welcome your comments.