The Holes In Your Leaky Practice Bucket

If you have ever heard me speak at a live event, there is one slide that always exists in the presentation.  The slide asks of you are an owner working on your business or the owner working in your business.  You, as a private practice owner, need to understand you are not just running a practice but running a business.

When you think of your business as a pail full of water, you have to think of all the holes which the water can leak out from.  One of the primary functions of you, as a business owner, is to prevent those leaks.  The average private practice leaks 10 to 15% of their profit through those holes in the bucket.  How can you help prevent those leaks?  Let’s look at three areas to start:

The Front Desk

You might think the person sitting at your front desk is just there to answer phones and welcome patients.That thinking itself is a leak in your bucket.The front desk, other than the physical therapist, is the most important person in your office. This position verifies the insurance, inputs all of the patient data, AND collects payments due.If any of these are not done with precision, you will lose money every day.Solution:Have well trained front desk personnel with processes and procedures to do their job quickly AND correctly.

Billing and Claims

Many owners fail to understand the true importance of this position and they outsource as one less headache.True the basics of billing are simple, but when dealing with any insurance company nothing is simple.To be paid promptly, and correctly, your claims must be accurate and timely.Yet, on average, 30% of all claims are rejected which results in lost revenue and profit.On top of the lost profit, what is the cost to re-file that rejected claim?The time and attention it takes can cost another 20% to the original cost of that claim.Solution: Proper training at the front desk and proper procedures of how billing is input and processed.Ensure the claim goes out “clean” the first time.

Debt Management

Reducing bad debt can quickly add profit to your practice.What exactly is bad bed?Bad debt is considered dollars that should have been collected but weren’t.These dollars might be co-pays not paid at time of service, co-insurance not collected, claims not filed timely.How can you monitor this?Look at you 90+ day accounts receivable, more than half of that will be bad debt.Solution: Payment is due at the time of service.Do you go to the grocery store, but a cart full of food, and tell the cashier you’ll pay next month?Why should you allow your patients to do the same?

You are a physical therapist AND a business owner.  Start running your practice as your business…put processes and procedures in-place, train your staff on these procedures, monitor your metrics and be successful!  Need help figuring your leaky bucket? Click Here to schedule a FREE consultation.

Andrew Vertson, PT, DPT, ATC
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