4 Meaningful Ways to Increase Your Medical Practice’s Revenue
Over the past several years, medical practices (especially primary care practices) have struggled with their revenue streams—and the COVID-19 pandemic accelerated this trend. In an AMA survey, most doctors noted a significant drop in revenue during the pandemic; the average decrease was 32%.
Addressing these issues requires a multifaceted approach that embraces both new trends in healthcare and well-established best practices. Here, our physician and medical practice attorneys suggest practical steps you can take to improve your practice’s profitability and revenue stream.
1. Identify Missed Opportunities With a Gap Analysis
Even if you have a well-established medical practice, it is likely that you are missing out on opportunities to increase your revenue and patient volume. A gap analysis can help you identify room for improvement. During this exercise, you and your staff will review your current systems, assess their performance, and build a plan that addresses gaps in your medical practice.
Now, let’s explore the essential steps in your healthcare gap analysis.
Define the Gap Analysis’ Goal
Assessing your entire practice in a single gap analysis would likely be a daunting task. Instead, identify a few KPIs (key performance indicators) that you would like to improve. They might include:
- Reducing the number of days your claims spend in accounts receivable
- Increasing your number of new patients
- Cutting your practice’s number of no-shows and cancellations
- Improving your claim denial rate
If you are not sure how to identify the right KPIs for your practice, reach out to a medical practice attorney or consultant.
Critically Assess Your Medical Practice’s Operations
As your practice evolves, you will inevitably outgrow some of your old systems. Now is the time to critically look at everything you do and dig into your data. What are your staff and patients’ most common complaints? Are you having a hard time meeting certification or compliance standards? Are your patients or best employees leaving your practice at alarming rates?
During this process, you will find gaps in care and procedure; both are worth noting. For example, if your patients are failing to schedule annual exams or regularly no-showing for appointments, these are gaps in care. These gaps cost you money. One study suggests that every no-show and unfilled appointment slot costs your medical office $200.
As your practice evolves, you will inevitably outgrow some of your old systems. Now is the time to critically look at everything you do and dig into your data.
Procedural gaps involve organizational missteps or omissions that create inefficiency or result in financial losses. For example, you might discover that your medical billing team makes mistakes because they are using too many paper-based systems or lack training. Or, they might not have consistent systems when it comes to patient collections.
Do not sweep these gaps underneath the rug or make excuses. Instead, acknowledge them and start building systems that will help you rise above them.
Create Systems That Help You Reach Your Goals
Now that you know where you need to improve your practice management, you can start identifying possible solutions. During this process, weigh the costs and benefits of each solution. Sometimes, a possible solution might achieve your goals, but is too costly or time-consuming to practically implement.
For example, while you could hire several more front desk workers to call and email clients, reminding them about appointments, you might be able to use automated software that can seamlessly text and email your clients for a fraction of the cost.
Monitor Your Improvement and Adjust Your Tactics
Once you have implemented your new systems, carefully track your practice’s performance. Are you seeing steady improvement? Are you identifying other gaps and missed opportunities that you should address? Keeping track of your progress helps prevent a major crisis later.
2. Do Not Sit on Your Unpaid Claims (or Ignore Claims Denials)
Inefficient claims management is one of the top reasons that medical practices lose out on revenue. If your claims are spending more than 50-60 days in accounts receivable, you likely are experiencing cash flow issues.
However, denied claims do not just slow down your revenue stream. Every time your staff must rework a claim, it costs your practice about $118 per appeal.
Suppose your office sees 400 patients each month. Insurers deny about 13% of provider claims. That means that 52 of those monthly claims will get denied. If you rework them, you are going to pay at least $6,136 per month (or $73,632 per year) in administrative expenses.
And even worse, at least half of denied claims are never resubmitted, which means those practices are not getting compensated for their care.
Your office staff needs clear workflows and systems to ensure that they submit clean claims, understand each payer’s procedures and expectations, and can track each claim throughout the accounts receivable process.
Missed filing deadlines are one of the most common issues with unpaid claims. Make sure that you understand all the filing deadlines associated with your claims. There is a lot of variability between payer contracts. You might have 90 days or a year to request payment—or you might have as little as 15 days.
And, when a payer denies your claims, file corrected claims as quickly as possible. Those same filing deadlines often apply to corrected claims—so you might have a very short time frame to resubmit your reworked claim.
Collaborate with your billing team to manage their workflows, ensuring that you submit more clean claims, do not miss out on unbilled claims, and track their progress. (There are automated tools that can help you streamline this work).
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3. Renegotiate Your Payer Contracts
Too few physicians and medical practices review and renegotiate their payer contracts. Insurance companies are sometimes willing to offer more agreeable terms to high-performing medical groups. Your organization should highlight the following factors during your negotiations:
- Low readmission rates and strong clinical outcomes
- Appropriate delegation of care to lower-cost, high-quality providers (like nurse practitioners and telehealth services)
- Issues relating to access to care or scarcity of providers in your community
- High utilization rates for low-cost, preventive services (like well-care visits)
- Metrics highlighting your patient experience
Notably, these factors align with the Healthcare Effectiveness Data and Information Set (HEDIS), which many plans must report on to maintain their health plan accreditation and Medicare star ratings.
If you are contributing to the healthcare plan’s bottom line by improving their HEDIS metrics and their ROI, you can credibly demand more favorable terms in your payer contracts.
If you are not sure where to start with the negotiation process, contact our law firm. Bryant Legal Group has helped numerous medical groups and physicians review, negotiate, and enforce their complex payer contracts.
4. Embrace Your Patients’ Evolving Healthcare Consumerism
In many communities, especially large urban areas like Chicago, consumers are demanding more of their healthcare providers. They are looking at reviews, clinical outcome data, and other factors when deciding whether to work with (or stay with) a medical practice. If you are not delivering them care when and where they need it, you are likely going to lose out of business.
This might involve reducing your patients’ wait times, offering after-hours services, virtual visits, and new services (like walk-in immunization clinics or in-office laboratory testing). These changes, while sometimes work intensive, will boost your patient experience and appeal to savvy healthcare consumers.
Marketing can also play a role in increasing your revenue. You can build trust, loyalty, and brand awareness by connecting with your potential and existing patients online. Consider enhancing your website (for example, by including a patient portal, e-visit information, and online payment options), deepening your social media presence, and encouraging your patients to post testimonials and ratings on popular review sites.
While healthcare marketing might not provide an immediate increase in your medical practice profits, it will (over time) enhance your practice by boosting patient satisfaction and creating goodwill in your community.
Bryant Legal Group: Respected Medical Practice Attorneys in Chicago
Bryant Legal Group has earned a reputation as one of Illinois’ premier law firms for medical practice and payer-provider disputes. We have helped healthcare providers across the state renegotiate their contracts, navigate their complex provider-payer claims, and manage their revenue cycles.
We take a client-centered approach that is practical, sophisticated, and aggressive. If your organization has questions about boosting revenue and profitability, please contact our office for a free consultation. We can help you understand your legal options and rights.
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