The end of the year is the prime time to take a comprehensive look at your practice. Reviewing where you're at can help you identify what you're doing well, and where you have opportunities to improve. Running a robust practice requires diligent attention to the business of pediatrics. In this post, we'll outline 4 strategies to help you evaluate where you're currently at, and make a plan for increased success in the new year.
1. Conduct a Pricing Review
A pricing review is something that should be done more than once a year, but if you haven't done it recently, make sure to do so by the end of the year. This is a common report for practices to run annually to look at both pricing and payment analysis. A pricing review allows you to compare what you charge with what is actually being paid.
The report needed to complete a pricing review is a 'Reimbursement Analysis with RVUs by CPT'. This report will show you the payment received per code across all payers, thus allowing you to compare reimbursement rates per procedure.
Comparing charges to payments lets you see if you are leaving money on the table. A payer is not going to let you know if they actually pay more than what you currently charge. So, you have to be the one to determine the appropriate rate. If you see that a payer is paying you the same as your billed fee, it is likely they are willing to pay more. In other words, their 'allowed amount' for that code may be higher than your current charge amount. If that is the case, you are leaving money on the table every time you bill that charge.
Some practices find out what the allowed amount per code is, and that's what they charge. But if your rates are set exactly at that amount, if and when a payer starts paying more for that code you'll lose out on the increased income. A good rule of thumb is to find out what your top payment rate is for each billed procedure and set your price to be about 20% higher than that top payment rate, billing this same price to all payers. This will keep you from potentially losing out on revenue if payment rates suddenly increase without you knowing.
While you're doing your pricing review, you might also want to run a Gross Collection Ratio Report. Where your pricing review will show you payment rates per CPT code, this report will show you the percentage of overall charges that you're collecting on. This is one measure of how well you are doing with A/R followup. In general you want to keep your collection percentages as high as possible, knowing that you won't have a 100% collection ratio if you deliberately set your fees higher than allowable amounts. A low gross collection ratio could be due to a number of factors. Think of this report as the '30,ooo foot view' and if something looks off, you'll need to dig a little deeper to determine the culprit. Some causes of a low collection ratio could be lack of effort with followup on rejected or unpaid claims, or charge amounts set considerably above payer allowed amounts.
2. Run a General Productivity Report
Reviewing visit volume trends over the past year will allow you to reflect on how busy you were in the year that is wrapping up, and you can also use it as a template for what to expect going forward. Having an idea of what to expect for visit volume can also help with planning for additional staffing needs in the new year.
PCC's Dashboard software provides visits productivity and data trends, allowing you to find answers to questions like:
- What were my sick, well, or total visits for the year?
- What was my visit volume for a specific month?
- What was my visit volume like for the same time period in the prior year?
3. Take a Look at a Patient Population Report
Another Dashboard report useful to run at year-end is called a Patient Population Report measuring practice growth. This lets you know if you are adding or losing patients, or holding steady. You can look at your practice population as a whole, or break it down by age group. For example, you might want to focus on your newborn patient population as you want a steady influx of newborn patients to keep your patient population from aging out over time.
A report like this can help you keep track of where you're at, inform you of age gaps in your practice, and help you see when it might be time to intensify your marketing efforts in order to draw new patients to your practice in the new year.
4. Think About Strategic Planning
Year-end is a great time to brainstorm ideas for the coming year. Consider whether you have opportunities to get more patients in the door. Use PCC's Dashboard or other practice management reports to identify how many patients are overdue for well visits or immunizations. Consider how much it would be worth to your practice if you were to get even half of those patients scheduled for their overdue well visit or vaccinations.
Or maybe there is something clinical to focus on in the new year. Ask yourself,
- Should we add any new ancillary services such as lactation consulting, nutrition, or mental health services?
- Should we offer any new procedures such as additional immunizations, fluoride varnish, or more screenings?
- Are there training or continuing education opportunities for staff?
- How much do we want our practice to grow in the next year?
Taking a comprehensive look at your practice at the end of each year with the intention of setting and communicating new goals can lay the groundwork for greater business success. This is always time well spent.