Although some pundits have declared that the worst of the recession is over, I know that some offices are seeing the pinch of the slow economy and/or the holiday season on their patient’s finances.  And while it may be true that you cannot get “blood from a stone,” don’t take comfort in all the talk of economic doom and gloom by leading yourself to believe that everyone’s practice is down right now.  Those lies are told by those who want others to join them in their own shortcomings.  Plus, it most certainly is not true.

However, this is not to say that chiropractic offices that are thriving in this marketplace by doing the same old thing. For example, my client who called to tell me he was still alive (hadn’t heard from him in a while, so I sent him a search & rescue email!) has been busy adapting new strategies for his office, adding staff and been busy, busy, busy to the tune of a $60,000+ increase in the last three months since he hired me.  His excellent stats are not the result of pure luck, being in the right place at the right time or multiple mantras chanted towards attracting infinite abundance.  Sorry to all you fans of “The Secret” or other similar think and grow rich spinoffs – this fella did the work, made some proactive changes and is reaping the rewards of his smarter strategies.

Let me make one thing clear: I am not telling you to start to do your own billing, over the counter collections or put a register in your treatment rooms to collect co-pays!  However, I do think that, as the CEO of your business, you need to spend time in consideration of the way your office currently handles finances.

Unless you have been wearing blinders for several years now, $5 co-pays and $250 deductibles are becoming as rare as a monogamous celebrity.  In many cases, the insurance step children have taken their place in the form of $50 co-pays and $5000 deductibles.  Obviously, the clinic who approaches patient finances like it were 1985, 1995 or even 2005 has strategies that either won’t quite fit in today’s environment or ones that don’t even border on reality.

Instead, savvy practices that are succeeding today are coming up with an assortment of ways to make sure that the patients still get the care they need AND to ensure they are paid to deliver it.  Here are a few ideas and tips to think about in this regard:

1. Your Credit Card machine is mandatory. The first line of defense for a patient who doesn’t have cash on hand – be it for a co-pay, deductible or to purchase the bulk of needed care –  is to have a credit card machine.  You are a dinosaur if you don’t.  Those of you who would laugh at the notion at someone practicing without a credit card machine need to meet some of the characters who send me snail mail because they “don’t do internet.”  I bet they “don’t do credit card machines.”  And it is likely, they “won’t do practice” for long either.  Get the machine.  And for those of you who have one, shop yearly for transaction rates, fees and other little ways the companies will suck more of your money than need be.

2. Consider Auto-Debit. Some people don’t like the idea of paying 22.5% interest on their credit card which seems to be the direction many companies are headed.  As an alternative, allow them to make payments.  But whatever you do, refuse to accept payments the old-fashioned way!  In other words, someone owes you $500 and your well-meaning staff member agrees to accept $50/month payments only to find out that 10 months turned into 17, included 19 reminders sent by your staff to get the $500 and in total, you actually lost money by spending more in staff time than you received.  Instead, use auto-debit through your bank or a processing company such as FirstACH.com or PaySimple.com.  Patients are used to having their bills paid this way, and with a simple form, they can pay you the money over time without having it be a headache and a financial nightmare on the back end.

3. Make Sure Your Hardship Agreements are in Writing. Some of you are too easy on what constitutes a hardship in your clinic and you waive co-pays at the drop of the hat.  Not only is this potentially dangerous for legal and/or contractual reasons, it may make little business sense.  Certainly, if someone is in need, you want to get them the care because you have a good heart.  But be sensible about this.  DEFINE what a hardship is and stick to it.  I get way too many emails from staff that complain about their doctors being all over the map in this regard.  Get the poverty levels for your area and see what your state says about who doesn’t have any money and who should qualify for your generosity.  That way, when someone approaches you with what seems like a legitimate financial challenge, you have some concrete criteria to see if they meet the definition legitimately.  One final note: your hardship agreements should be in writing and be temporary (put an end date in which the hardship ends or must be re-qualified).

4. Beef Up Insurance Savvy, Cash Friendly Services. Even though much of the coding, billing and documentation advice I give slightly favors third party payment systems, it is a wise move to have services that are both reimbursable through insurance and for which patients readily pay cash.  My favorite choice in this category is massage therapy because it costs little to start up, has excellent profit margins, generates quick cash flow, is frequently reimbursed by insurance companies and routinely paid for in cash as well.  My How to Build a $300,000 Massage Practice in Your Chiropractic Clinic program is one of our top sellers for this reason – and it continues to get rave reviews because the program is a simple step-by-step model for how to create a successful massage department.  Certainly, massage is not alone in the insurance savvy, cash friendly category; but I do believe it outweighs the other choices by a large margin.

5. Clean Up Your Messes. Many of us are willing to point the finger at the patients or the economy for our financial struggles when the real answer is the mess that is in our own backyard. To put it bluntly, you will never achieve high levels of financial success if your Accounts Receivables are too high or inappropriately pushing beyond the 90 day mark.  If your billing person (or system or company) is a mess and can’t get you paid, there is no amount of compensating you can do on the other side to squeeze more profits out of your patients that will ever balance the scale.  Finally, if your documentation and your coding systems stink or were passed down to you by Uncle Louie, DC who was a big roller in the 70’s,   you are in for financial trouble at the least.  In today’s marketplace of heavily scrutinized claims, post payment demands and recovery audits, it makes little sense to bill for anything and everything with little attention paid to proper billing, coding or documentation standards because you will only to pay it back later.  Instead, spend some time cleaning up your own messes.   If you have even an average practice in terms of volume and visits, I can virtually guarantee you are leaving hard-earned money on the table because of your lack of expertise in these areas.  I say this, not to brag, but because this is what I do every day of my consulting business and there is literally that much to improve in most of our practices.

So, which of these steps are you missing in your practice?

Is it all of them?  Can you survive doing business the same way you are doing it now or is it high time to “kick it up a notch” and change with the times.  You may not be able to do much individually about the state of the economy, but you can do a whole lot about how your private practice handles finances.  So, get to work.  And if you don’t know where to start, consider completing my Practice Analysis Questionnaire so I can give you some guidance in this regard.  There’s no charge nor any obligation to utilize my services, but I am willing to give you some candid opinions/recommendations (like ‘em or not!) for those who take the time to fill out the questionnaire.

Happy Holidays!

Tom Necela, DC, CPC, CPMA

P.S.  For those of you who would like more in-depth strategies, check out my Chiropractic Collections & Financing Secrets program which has dozens of different tips and techniques to improve collections.

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