Recently, Business Week reported on the growing number of cash-crunched entrepreneurs who are suddenly finding out that their credit limits have been either suspended or downsized. It’s an ugly issue that all chiropractors hope to avoid, but the reality is that healthcare is not totally immune to the tightening of economic belts around us.

In fact, according to the American Hospital Association, 50% of America’s hospitals are currently operating in the red, up 17% from 2007. In the stats from the Small Business Watch report add up correctly, chiropractors are no exception. The May 2009 edition of the report indicated that 50% of small business owners have experienced temporary cash flow problems in the last 90 days.

Because many practices see a significant portion of their income from third party reimbursements, insurance companies (who are feeling the bite of the economy as well) that delay, deny or routinely underpay our claims can have a major impact on our cash flow. As the number of people who can afford insurance decreases, as members pay their insurance premiums late and create cash flow problems for the insurance companies themselves, be assured that it will get proportionally more difficult to get reimbursed from third party payers.

As chiropractors, what can we do to either proactively plan to avoid these struggles or remedy them as quickly as possible. Rather than gripe about the injustice of the system where banks and insurance companies can change policies at their own whim, here’s a list of action steps to take NOW toward some workable solutions:

  • Consider Medical Factoring. This is a little used route in chiropractic, but common in medical practices. Essentially, you receive a line of credit for your Accounts Receivables. The Medical Factoring company will loan you money based on the presumption that you will eventually be paid for the work that you do. If you are having serious cash flow issues, consider this option before taking major budget cuts, firing staff or eliminating necessary expenditures. See International Factoring Assn for more info
  • Eliminate Waste. Hopefully, your front desk CA’s salary is not a target, but you should look carefully within your practice to determine if there is unnecessary spending going on. This would be a good time to evaluate ongoing bills by comparison shopping to see if you can save some money. Take nothing for granted. Make a list of all routine expenditures (phone bill, internet, x-ray processing, ancillary products, etc) and have the most budget conscious C.A. spend a few hours bargain shopping. Here’s a recent success story: One of my clients suffered a health issue that put him out of work for nearly six months. He acted on my suggestion to evaluate every expense in order to keep his office afloat on a bare bones budget in his absence. He reported that his very thorough C.A. found nearly $2800 worth of bloated expenses to put on a diet to the tune of a $33,000 per year savings! The doctor’s cost? 6 hrs staff time @ $10/hr!

  • Bullet-Proof Billing, Coding & Documentation. You cannot afford the luxury of delayed or denied claims due to internal errors in the billing, coding or documentation department. Even if your clinic is producing vigorously, do you really want to waste dollars on preventable errors? If your practice management or billing software has a “denial report,” run it. See all those claims listed? That is work you have already done for which you have not been paid; worse, it may be your fault. At a recent seminar I was giving at a chiropractic college, I asked new grads how much training they received in Billing, Coding, Documentation or Collections. If you are a doc who has been in practice for a decade or more and feel slighted by the lack of “practical” skills you were taught in this department, you are not alone. While it may be appalling to some, the new DC’s received the same amount of training in these skills as you: zero.

Perhaps it’s time you dedicated some resources to the backbone of what get’s you paid each and every day. Have your staff and/or your software check to make sure your claims are clean BEFORE they leave your office. Attend a seminar on billing, coding or documentation strategies (I’ve got two coming up in Seattle and Portland with Jim Bowen). Fed up with trying to piece all the info together? Don’t know where to start? Help is available: my email is

Hopefully, everyone reading this is informed enough that these are mere warnings or proactive tools you can use in an emergency. If so, congratulations and keep up the good work. If these words hit a little too close to home for your comfort, get started on fixing these problems so you can turn things around as quickly as possible!

Tom Necela, DC, CPC