2009 November | The Strategic Chiropractor

Three Investments You Need to Make in Your Chiropractic Practice

Written by Tom Necela, DC, CPC, CPMA, CCP-P on November 24th, 2009

Topics: Business, chiropractic business, chiropractic practice management

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By the time many of you read this, we will be nearing Thanksgiving, Black Friday, the official start of the holiday season and for some of you, the worst time of the year for your chiropractic practice. In fact, I have spoken to quite of few of you recently who are getting downright cranky that the holidays are approaching and once again, they look like they will thwart reek havoc on your schedule.

Quite frankly, many of you need to stop worrying about the imperfections of your holiday schedule and instead use the time for rest, relaxation, or fun with family and friends. While some may scoff at the idea of taking a vacation, a few days off or spending time doing anything non-business related during a recession, I consider it an investment.

In fact, given the present economic upheaval, the most surefire investment a chiropractor can make is one in himself or herself. I am no wall street guru; I do not pretend to know all there is about real estate, precious metals, tax lien certificates or even storage unit auctions as means to earn a fortune. One thing that I do know is that dollars invested in myself, my practice or my business have one common denominator that can contribute to success and one thing that I can control: me.

Part of that investment needs to be in activities that rejuvenate you. For the Latin scholars reading this, you will note that the word rejuvenate stems from the same root as our word juvenile. In other words, to rejuvenate yourself is to make yourself young again. Although I do not claim to have found what Herodotus, Alexander the Great and Ponce de Leon all searched for – the mythical fountain of youth – I have observed three things that play a common role in the lives of successful chiropractors. Since you won’t have to check your mailbox for any Christmas present from me this year, let me share the “secrets” with you. Each of these “secrets” to chiropractic happiness and fulfillment are what I have seen manifested in docs with fantastic practices. With this knowledge, I hope to encourage you to make a proper “investment” in your own success and position yourself to have the best year ever in 2010 (regardless of what the economy is doing):

Investment #1: Willingness.

It always amazes me how the very best practitioners — ones who seem to know the most and who have mastered their craft and business in many ways – still possess a level of open-mindedness, humility and willingness to learn that surpasses most of their peers and even many younger docs who should lack the “know it all” attitude. In fact, I have yet to meet a doc with a booming business who is not someone who would fit the moniker of a “lifetime learner” and who is always willing to improve.

Age does not play a factor in these successful docs because they have discovered one important element of the fountain of youth: a brain engaged stays sharp, regardless of its age. As a result, these docs stay forever young because they are forever engaged in trying to improve themselves personally, professionally and as the CEO of their business.

Best way to utilize your “willingness” investment: Before things feel like they are about to cave in, take a moment (or a day or a weekend or more) and reflect on what you CAN do to positively impact your business rather than focusing on what the economy or other arbitrary events may hurl your way. Use your new skills, a fresh perspective or just pigheaded determination to get your brain to find some solutions on how you can improve. But this will only happen if you put in the time and effort to sharpen your brain and are willing to focus on what YOU can do to grow your business.

Investment Myth to Ignore: One of the stumbling blocks that I see many DC’s fall over (and early in my career, myself included) is the belief that they have to do it all alone. Sure, your brain is a wonderful piece of God’s creation and generally underutilized. However, there is no rule that dictates you have to be the one to figure out all the ideas by yourself. In fact, one of the simplest ways to ensure that you are stuck in the same frustrating rut forever is to create your own paradox and allow yourself to be boxed in by your own constraints.

Here’s a perfect example: I get many calls and emails from flustered docs who can’t grow their business or improve their income because they don’t know how. Yet, they either don’t seek assistance or reason that they can’t afford it because they lack income. Don’t allow yourself to fall victim to your own Catch-22. It has nothing to do with talents, funding, opportunity, location, economy, or many of the other excuses we use for our own subpar practices. The only thing necessary to break the cycle of doom is…(you guessed it)… willingness.

The world is full of examples to this point. It is the reason some athletes are paid millions while superior talent sits at home undiscovered. Why some musicians play on stage for all the world to hear while those with better chops beat the drums in their bedroom. Why some business owners launch their success while every conceivable argument for sanity speaks against them. Each are willing to pay the price – be it in time, effort, or financial – to succeed. With proper focus, willingness can overcome much, if not all, adversity the world throws our way.

Investment #2: Rotate & Replenish

Though success can be defined in many ways, I would argue that lopsided success is really not success at all. In other words, if your business provides you with a fantastic measure of financial or professional satisfaction and comfort but your family, your marriage or your sanity has been sacrificed upon the altar of your practice, you do not meet the definition of a success in my eyes. Certainly, financial success is important for all of our businesses. I have yet to meet a DC who runs a 501(c)3 practice by any legal definition, but too many of you are practically running your business without profit. Certainly, this is not good, but it is not the whole picture.

Chiropractors need to grasp the principles that generations of farmers have come to understand. You can only farm the same soil for so long before you need to rotate your crop, replenish the soil or risk failure.

For some of us, this means we need to go home to our families at a decent hour before the relationships wither up. For others, it means we need to take time off and get our brains going in a different direction for a change. Still others should perhaps focus on the “rotate” principle. In other words, do something DIFFERENT, perhaps within your business or perhaps in your personal life. Just do something that takes you out of your comfort zone or that has potential to get you out of your rut.

I see two things happen to chiropractors who fail to do this: They either burn out or they tune out. They lose all motivation to practice because they have been stuck in the same rut for so long that they feel they can never escape. Burn outs stop marketing, stop trying to learn, let their paperwork pile up and drag themselves to work everyday because they need a paycheck. What’s scary is that burnout is not exclusive to DC’s in practice for 20+ years; I have observed this phenomenon in frustrated docs who have been in practice 5 years or less!

Others have been doing the same thing for so long that they effectively ignore their surroundings – they are tuned out and sometimes aware of what is even happening to and around them. They practice in offices that look like vintage 1989 and have the procedures and systems to match. They have been coasting for so long that they simply forget to apply the gas. Gravity will eventually pull their practices to the ground. Ironically, most “tune outs” notice this several years before they want to sell and retire. Thus, they have positioned their business for the worst possible return on their investment of a lifetime of work.

Regardless of which camp you may be closer to, realize the need to rotate and replenish as a key towards long term chiropractic success.

Investment #3: Give Back

Successful people in any walk of life are not selfish. They realize they have not achieved their success on their own, therefore they are willing to share their success with others. Even if you don’t count yourself a total success in every avenue of life or practice, there is probably something that you are good at. Commit yourself to giving back in that area. (Caution: be judicious here and look at yourself with a critical eye, as you don’t want to be the blind leading the blind. Truly pick something you KNOW or that colleagues tell you that you do well.)

In addition to making you feel good, giving back has a strange way of furthering you along. Anyone who has done missions work, community service or just spent time with marginal or special populations will tell you that they received much more than they ever gave. Similarly, those who tithe know that you don’t give a portion of your income to the church because you expect God to multiply it, but often your faithfulness is rewarded in just that manner.

So, give back. If you can’t think of where you should start, then start with the simplest form of giving: gratitude. Be grateful and thankful that you have a career in which you can touch lives, help people and make an honest living working in nice surroundings (no matter what your office looks like, it probably beats working on a roof, on the back of a garbage truck or slogging through a tube pushing fish into a container below). Thank your patients who have given the hard earned money in support of your business, your family and your lifestyle.

In some way, giving back helps us keep perspective on the big picture of what we are doing here which somehow helps fuel us to make our practices and the world a better place. Perhaps that is why so many successful DC’s give back – to their alma mater, to their profession or to their community. It’s one of the few perpetual cycles in life that is nice to be a part of. If you are not doing something on a regular basis that has absolutely no ties to marketing, business development or other financial gain, I challenge you to do so. You will feel good and probably gain as a result anyway- truly a win/win!

Hopefully, this will be some good food for thought to savor over your Thanksgiving holidays.

Happy Thanksgiving – Be well!
Tom Necela, DC, CPC, CPMA

P.S. One last comment: insight is not good enough. It takes ACTION! So, after you have mapped a plan for your success, decided on areas to improve, or have committed yourself to changing directions, you need to get moving and take concrete steps towards the fulfillment of your plan! Not sure where to start? Need some direction? Know you can’t do it all alone? Fill out my Practice Analysis Questionnaire and I will review your specific situation FREE of charge and contact you to discuss my findings. No obligations, no hidden fees, no credit card needed to start your “free” trial.

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The Top 3.5 Ways to Save Money in Your Chiropractic Practice

Written by Tom Necela, DC, CPC, CPMA, CCP-P on November 17th, 2009

Topics: Billing, Collections, chiropractic billing, chiropractic business, chiropractic practice management

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Many chiropractors today are seeking ways to increase revenue and reduce the costs of practice operations. In today’s post, I will share with you a few excellent ways that I have found to help curb expenditures so that there can be “more money than month.”

1. Know the costs of providing your services.
At my seminars, I am frequently asked about how to set fee schedules. Specifically, DC’s often want to or how to implement profitable “cash” or time of service fees that don’t give the farm away and are also compliant. Before any decisions can be made about how to go about this, it is vital that you knows the actual costs of providing the services you render in your practice. Any discussions made without this knowledge are meaningless as they have no context or relevance to you practice. Figure out your “Cost per patient” (or even Cost per Procedure, if you can be that specific) so that you will know exactly what each of the main procedures that you bill out cost your practice to provide. This knowledge will help steer you in the right direction to creating a profitable fee schedule and perhaps even eliminating services or procedures that are a waste of time or money.

2. Setting up a sound budget annually and review it! A budget provides a planning mechanism that forces us to monitor variations in our practice spending, but it also allows us to allocate money towards necessary elements of our business such as marketing. Once cost categories are broken down, I have found very few practices that were not able to save thousands of dollars per year! The most common item overbudget? Staffing! An expense category that frequently surprises doctors? Telephone expense. I have found lines being paid that were no longer in use by the practice, astronomical cell phone plans, and even the occasional savings be realized with some good comparison shopping.

3. Outsource, Liberate or Just Get Rid of the Dead Wood!
Although I mentioned budgeting in step two, the reality is that most cost savings in the area of comparison shopping and appropriate budgeting pale in comparison to overpaying staff. Quite frankly, some of you need to take a good hard look at your numbers and get rid of the dead wood around your practice! Employees that are overpaid and underworked are costing you far more money than you will ever save in watching your spending on pens and paper. Similarly, employees that are inefficient in their job are costing you big bucks as well. For example, if you are paying an employee to do your billing who is collecting an unacceptable percentage of your services, that employee may be doing their job, but they are not cost efficient. Why? You can outsource your billing to someone who is only paid when they collect, as opposed to your employee who is paid whether they collect well, poorly or anywhere in between. For some of these staff you need to liberate them so they can find meaningful employment elsewhere in a field in which they possess more talent or interest. For others, you may need to shift their job description towards tasks that produce a better ROI or for which they possess better skills. Finally, in this tough economy, there is absolutely no reason to tolerate and pay for any staff member who does not put 110% effort into their job, who does not play well with others or who is a thorn in your side. In virtually any market in the country, one quick trip to Craig’s List will reveal dozens of job seekers who would love to take their place and give you a bigger bang for your buck. Save your money by not trying to “save” marginal or mediocre employees. It almost never works and in the end, your time, money and effort would have been better spent on a new prospect.

3.5 Evaluate the Performance of Your Billing (For all you Jeffrey Gitomer fans, here is reason # 3.5) While it may be obvious if your front desk CA is a dud, the next questions many of you will ask is…”How can I tell if my billing person is doing their job well?” Or “How can I tell if I am spending too much money on my billing service?” Evaluating the performance of your billing staff (or service) is a hard science we were never taught in chiropractic college but can be easily learned. For starters, I would suggest you look at your Accounts Receivable and Your Collections vs Services.

For most practices, your A/R should be heavily skewed towards the Current-30 day mark and taper off towards the 60,90, and 90+ days of aging marks. If not, you may have a problem. On the other hand, your Collections should match your Services as closely as possible. Obviously, collecting 100% of services is the best, but depending on your practice mix (cash, insurance, PI, WC, etc) lower percentages may be acceptable as well. While it is difficult to give a catch-all formula that works for all practice styles, I can tell you that it is nearly impossible to be profitable if your collections percentage approximates your overhead. In other words, the average overhead for clinics is 50% and I have met doctors with 52% collections who are puzzled why they are struggling to make money. If you are in this situation (or getting too close for comfort), I suggest you contact me for assistance.

Incidentally, if you need additional information on how to meaningfully evaluate billing performance, I would recommend my program “How to Oversee Your Chiropractic Billing Staff or Service.” Sure that’s a blatant commercial, but there is no other resource that I know of in chiropractic that covers this important topic in such detail (which is why I wrote it!).

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How Can I Increase My Chiropractic Income?

Written by Tom Necela, DC, CPC, CPMA, CCP-P on November 10th, 2009

Topics: Billing, Business, Coding, Collections

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At one point in time, virtually every business owner – chiropractors included – has asked the question “How can I improve my income?” Today’s post will discuss this mega-dilemma of nearly all entrepreneurs.

But before we discuss potential SOLUTIONS, let’s take a critical and closer look at the question, knowing that the only way to arrive at better answers is to ask better questions.Truly, do you really want to just increase your income? Most would shout: “YES!” But looking at things from a broader perspective, the astute entrepreneur would probably also want to know the costs involved with increasing income.

Let’s take a look at two common ways to increase income. First, you could raise your fees. This almost immediately produces an income boost. The cost to do so is nothing. Sounds perfect? And while increasing fees is one thing I believe is critical to your financial success, it does have limits. After all, in theory you could double your fees and double your profits. You also may multiply the number of patients who head for the door. So, although raising fees may be smart, it is a limited strategy by nature.

Now let’s look at the example of new patients. Most chiropractors would agree that having more new patients is key to increasing income. Certainly that is often true. But don’t be too hasty in proclaiming new patients as the premier method of increasing income. Why? Two words: acquisition costs. If your new patients come from referrals, the cost to acquire them is nearly zero so this can be a profitable venture. On the other hand, if the new patient walks in as a result of an ad you placed, you need to now calculate the costs of the ad and the potential income the patient will generate for your practice. In this way, some new patient acquisition methods can certainly be profitable while others less so or not at all.

So, perhaps a better question to ask is:

What’s the most cost-effective improvement I can make to increase income?

In the October 9, 2009 edition of Medical Economics, healthcare consultant Keith Borglum gives the answer, plain and simple: “The most cost effective improvement is usually in improving your coding.”

Of course, as a Certified Professional Coder myself and one who routinely utilizes proper billing and coding to help improve revenues for my consulting clients, I certainly would agree. Sure I am a bit biased, but here’s the reasoning behind Mr. Borglum’s proclamation:

“An extraordinary number of physicians fail to stay current in their knowledge of coding, resulting in reduced reimbursement or delayed and denied claims. Many physicians purposefully undercode out of fear of penalties for overcoding or unbundling. Others leave their coding to support staff – an inappropriate approach virtually guaranteed to result in errors …”

Although this consultant is speaking in reference to Medical Doctors, in my experience, we chiropractors are really no different. In chiropractic school, we were taught examination procedures based on creating a working diagnosis so we could accurately assess the patient’s condition and create an appropriate plan of care. In other respects, our exams were also about protecting ourselves from malpractice resulting from potential hazards that could be mis-diagnosed. But I have yet to meet a chiropractic graduate from any school who was taught how to properly document an exam for purposes of correct coding and billing.

As a result, most fall into one of two camps mentioned above. Conservative chiropractors tend to undercode or underbill, thus denying themselves reimbursement for procedures they actually performed. More aggressive chiropractors tend to bill for procedures out of some sense of justification for the time they spend performing a service that may not necessarily match up with coding or documentation requirements. As a result, they overbill or upcode.

Many clients come to me seeking ways to improve income, but most also have some predetermined methods that they believe they need to use to achieve this and hope that I can somehow teach them a new “trick” or “secret method.” On the contrary, most clinics I see would benefit not from something new, but by returning to the old.

In other words, they can reliably improve income by making sure they are being paid for what they are already doing. They can increase revenues by maximizing reimbursements and minimizing errors that cause them to leave money on the table. Proper billing, coding and documentation can help you achieve this – without the added expense of new equipment, extra staff or additional funds in the marketing department.

On top of that, if you consider correct coding from an expense point of view, proper coding not only has the potential to increase your income, but also prevent you from losing income –few strategies can ever achieve both.

If you want to get down to pure return on investment, taking a coding class for $100 could easily find you at least one item that you could improve. Even if that resulted in a $25 increase for a service or procedure you performed just a few times a week that could result in a $5000 increase over the course of a year or a 50:1 ROI! Personally, I have had seminar attendees tell me that one of my strategies was worth $25,000 to their bottom line! Take that one step further and spend a few hours consulting with a coding expert and you could easily turn your investment into a 6 digit return. I do this routinely for my clients.

So, the next time you are seeking ways to increase income in your practice, remember the following:

All income increases are not equivalent – consider return on investment
Correct coding can help you prevent income loss AND increase income

One of the most basic steps towards improving your coding should include the purchase of the ChiroCode deskbook. Quite frankly, no office should be without it. Every office I have seen without one of these books that is making major coding errors that are costing them money and exposing themselves to audits. Unfortunately, I can think of no exception to this rule.

Now is the time to start planning and investing in next year’s success!

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Upcoming Chiropractic Billing, Coding, Documentation Seminars in Seattle & Portland!

Written by Tom Necela, DC, CPC, CPMA, CCP-P on November 7th, 2009

Topics: Uncategorized

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Discover the latest strategies to maximize reimbursements AND reduce audit risk from Tom Necela, DC and The Strategic Chiropractor!

Medicare Recovery Audits started in August – are you ready?
What you need to know about the HITECH Act of 2009, EHR stimulus hype & your compliance
Learn Surefire Methods for Defensible Documentation
Avoid the 4 Deadly Mistakes of EHR or computerized SOAP notes that trigger audits
Learn ’09 Premera Blue Cross, Aetna & Cigna policy changes that affect your practice!

Also — save $$$ on taxes and get your corporation in gear with Jim Bowen’s fast paced, business & tax info that you just can’t get anywhere else!

Registration for all seminars is available online

at my co-presenter Jim Bowen’s website at www.bowen.us/seminars

Hope to see you there!

SEATTLE, WA

Saturday, November 14, 2009

River’s Edge Best Western
15901 West Valley Highway
Tukwila, WA 98188
425-226-1812
http://www.bestwesternwashington.com/hotels/best-western-rivers-edge/

PORTLAND, OR

Thursday, November 12, 2009

Avalon Hotel
455 SW Hamilton Ct
503.802.5800
http://www.avalonhotelandspa.com/

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Answers to Common Chiropractic Medicare Problems

Written by Tom Necela, DC, CPC, CPMA, CCP-P on November 3rd, 2009

Topics: Audits, Billing, Business, Coding, Documentation, EHR / EMR, Medicare, Medicare ABN, OIG Report, compliance

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In my last article on The Perennial Problem of Medicare for Chiropractors, I offered to respond to some common questions and dilemmas that you have been experiencing in regards to Medicare and your chiropractic practice. Since the blog was posted last week, we received a total of 326 responses with questions, comments, angry remarks about CMS and a few demonstrations of our collective chiropractic misunderstandings about all things Medicare.

In other words, the rumors are still out there, docs are still frustrated and problems still abound. To be fair, I did receive ONE response from a DC who was a bit perplexed about all the fanfare and indicated that Medicare was the easiest payer to deal with. Certainly, his response was the exception, not the norm. The one caution I would raise for docs who similarly feel that they are sailing along without any trouble: the RAC audits have started and they may change your opinion of the matter.

Now, let’s get to the questions! Obviously, I cannot address all 326 responses, so I have summarized the concerns into a few basic categories as follows:

Payment Denials or Downcoding. Several readers were upset that Medicare had denied or downcoded the level of service and paid them less (or not at all) as a result. More were confused about what this means. Since your adjustments are the only service Medicare pays chiropractors for, the “level” of service refers to the number of areas that you adjust and bill for – i.e. 98940, 98941 or 98942. When I perform Documentation Reviews for clients, the most common mistake I see here is that your objective findings don’t match the level of service billed. In other words, you billed a 98941 (3-4 region adjustment) but only had objective findings for perhaps 1 or 2 areas (or less). Therefore, Medicare concludes that either you didn’t meet medical necessity for the service you performed at all or that you only met medical necessity for a service that was lower (fewer areas) than the one you billed. The result: your claim will be downcoded (i.e. a 98941 will be paid at 98940 rates) or denied ( you didn’t meet medical necessity at all).

Fixing Problem Claims. This question of what to do with incorrect, incomplete, or problematic claims came in a variety of formats. Per Medicare Transmittal 1588, you can submit a corrected claim if your original claim was filed in a timely fashion and was incomplete. By incomplete, Medicare means items are missing such as NPI #, patient demographic info or other such requirements on your claim form. Incomplete does not mean that you get to re-submit your corrected claim because your original clinical documentation was substandard or missing items you should have included in the first place.

Error Rate and the Aftermath. Error rates probably mean bad news for most DC’s! Error rates are the % of claims submitted in error to Medicare that are determined to be such after a review. Error rates can result in overpayment demands (Medicare paid you, but since 20% of your claims were in error, they want a refund) or can lead to future audits (your error rate is too high, therefore Medicare will audit you again in the future to monitor your progress) or can even cause “Pre-Payment Reviews” (Medicare determines that your error rate is repeatedly too high and they will have to review your documentation prior to approving any future payments). As I said at the start, none of this is good news, although if you are receiving notices of PrePayment reviews, you definitely need help in the area of proper billing, coding and documentation.

Avoiding Medicare Patients. Some of you indicated that the only sure-fire way to avert Medicare disaster was to avoid treating Medicare patients. Certainly, you have the right to refuse to treat Medicare patients so long as you do so within the confines of your state laws. Whether this is a good tactical move may be questionable, as the Baby Boomers represent the single largest segment of the population who will be driving lots of healthcare dollars in the name of Medicare. To exclude them may represent a significant portion of your practice base. Also, be careful when you state that you do not treat any Medicare patients. By the questions some of you posed (whether hypothetical or not), you ARE treating Medicare patients but you are simply not billing Medicare for the service. If you are not doing this correctly, you could be accidentally committing fraud by doing so.

Medicare, EMR and Stimulus Funds. Several questions came in regarding integration of EMR and Medicare. According to the program, physicians (including chiropractors) will be eligible to receive stimulus funding as soon as 2011 for EMR that meets certain “meaningful use” criteria. At this point, the specific details of these requirements are still to be determined. While I am a big proponent of moving to EMR, in this respect, I agree with the ACA’s advice on the matter: “do so with the fundamental focus of improving patient care.” In other words, get the EMR because you want it to help your documentation, your clinical practices and business management – not because you may get some money from the government.

CERT Request and Audits. Apparently, there are many of you who wonder if CERT requests are an audit. CERT stands for Comprehensive Error Rate Testing and it’s likely many of you have received such a notice from Medicare. It is their way of randomly testing the accuracy of payments made. So the key word is random and is in no way an indication that you are doing things wrong (or right for that matter). Comply with the request and do not ignore it. For more detailed information on the Audit process (for both Medicare and other third party payers), types of audits and what to do I suggest you get a copy of How to Prepare Your Chiropractic Practice for Recovery Audits so you can understand what auditors are looking for and how to respond.

ABN Mysteries. ABN questions dominated my inbox in varying forms and it’s obvious there’s still a lot of confusion over ABN’s. First, by definition the ABN is an advanced notice (meaning, you have to give it to the patient beforehand not to cover your tracks afterward) that Medicare may not pay for the service you are about to render. Secondly, to simply have your patients sign an ABN each and every visit is incorrect. It presupposes that none of your chiropractic adjustments are necessary. This is not something you want to communicate to Medicare or your patient! Finally, for more detailed discussion of ABNs, let me refer you back to an older post entitled: ABN Abuse: A Common Chiropractic Practice.

FREE or Discounted Medicare Services. The “Can I include Medicare patients in my Free or Discounted…” question was posed in several ways, but the same theme is underlying. What can I give away or discount to my Medicare patients? Here is your answer. According to OIG interpretation of Section 1128a(5) of the Social Security Act, exam specials, coupons, or similar discounts should not exceed $10 individually or $50 annually per patient. So, your FREE exam or adjustment may be problematic in that it either exceeds the $10 value or that you don’t charge enough for your services. One way, you’re in trouble with Medicare; the other, your business is not likely to generate a profit if you are charging less than $10 for exams, x-rays, adjustments, etc.

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Three Investments You Need to Make in Your Chiropractic Practice

The Top 3.5 Ways to Save Money in Your Chiropractic Practice

How Can I Increase My Chiropractic Income?

Upcoming Chiropractic Billing, Coding, Documentation Seminars in Seattle & Portland!

Answers to Common Chiropractic Medicare Problems