In this rapidly evolving healthcare industry, medical practice is one of the industries that has faced numerous challenges. Not only the changes in the medical billing and credentialing have put them in hot waters but inflation also has burnt possible hopes of many practices. This is because the insurance companies and reimbursement parties have levied significant liabilities to meet in payment structures.

Even more, practices have to increase the wages of the staff with the increasing inflation else the market trends are rapidly evolving to benefit employees. For the same reasons, employees are expecting wage hikes of about 20%-30% from their previous wage rate. And this understandably increases the demand for skilled employees. However, there are other ways medical practices should look at, and one of them is to outsource tasks that require skilled workers such as the medical billing process to medical billing services.

Although, due to inflation, where many businesses have reached the verge of consequences, there are ways that medical practices can look upon.

Outsource Business Functions

This function will come into play when your administrative staff leaves the job and you try to refill the positions. In place of finding a skilled candidate with high salary expectations, you can outsource some of the functions of your practice temporarily or even permanently.

On the other hand, you can find a competitive administrative service-providing company that is less expensive and their ROI is more efficient than a full-time employee working 8 to 9 hours a month. The administrative services they provide include credentialing, medical billing, recruiting, and authorization.

Outsourcing credentialing is one of the great examples to cope with inflation. Credentialing function requirements increase and decrease based on the time of the year. Depending on the size of the practice, many times outsourcing credentialing takes less time than often in claiming reimbursements. One suggestion that needs to be considered is that you should ask for a reference before hiring a medical credentialing service-providing company so that you are sure that you are working with a reputable name.

Keep Reviewing your Contracts with your Payers

Oftentimes, payers make complex agreements that practitioners hardly understand. This is why most of the time they are unaware of the fact that how badly they are getting paid. In addition, payers often reduce the price for their panel physicians without any notice.

Payers often make these explanations due to inflation. The best thing to review the rates from payers is to research and find out the market allowable rates.

• Take these allowable rates and multiply them by the CPT codes mentioned in the payment agreements with payers.
• Count the total number of management visits and evaluations and divide them with the total payer revenue. The solution given will provide you with the revenue you get from each patient.
• Compare this figure to your expenses and then,
• Compare it with all your payers for each CPT code.

You may find out that you are providing services for the payers who actually are not providing you the revenue. It’s the high time when you should negotiate on the contracts and probably stop accepting those rates from payers. Finding new payers with competitive rates will automatically improve your profit margins.

Negotiating Reimbursement Rates

Managing your practice’s revenue cycle successfully, negotiating is one of the important and fundamental aspects. When rates are not changed by the payers and you wait for the next three years to negotiate, then there’s a chance that you are missing a significant amount of revenue by just not negotiating. Suppose if the inflation rises 5% yearly, then after three years, your revenue will be 15% less.

The best suggestion here is to negotiate the Cost of Living adjustments (COLA) every year on account of inflation. In case, you have an agreement in place, compare all the payers, and research market rates and then it will be a wise decision to negotiate when you understand and know, how and what to ask for.

Reviewing Account Receivable And Collections

Medical practice cannot simply get a raise in the rate. They have to find alternatives to get the price they owe. For example, reviewing the receivable and evaluating the amount of money the practices ate collecting or are pending.

The collection company standardized the 96% collection rate for a successful and growing revenue. If your account receivable has a rate of collection below 96%, then you should focus more on receivables, reviewing denied claims, and identifying procedures that make you leave the money on the table unconsciously.

Many times the insufficient collection system becomes the main reason why practices leave the money on the table that gets down the drain when not collected within a specific time.

Oftentimes, if not reminded by the front desk, many patients do not realize that they have to pay deductibles. Eventually, a large amount of deductible piled on compared to those who meet. Therefore, your front desk needs to keep reviewing and reminding patients about the deductibles that they need to pay upfront.

Improving Margins

All the other ways to cope with inflation can help your practice but cutting out the unnecessary costs is vital in improving the margins of any business. In this digitalized era, many businesses set their spending on autopay and forget to check or review what they have been charged for. Here they need to rectify these habits and take the financial reports on a monthly basis to review their expenses. The report will tell you the number of services that have been raised from the previously billed amount. Identifying this might push you to find some other service providers. Examples of these services are administrative service suppliers, email hosting, internet service, office supplies, etc. When all you need to cut the cost, start reviewing your monthly financial reports.

Endnote

It is not easy for any business to run successfully keeping the inflation trend high. Also, payers have already made the game difficult for the practices to remain in the game while improving revenues. Try adhering to these fundamentals to combat inflation and manage your practice efficiently.