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.
Before we discuss potential solutions, allow me to throw another question at you:
HOW do you want to increase your income?
For many DC’s, they will add a caveat: “…without working more!” This is not because chiropractors (or entrepreneurs in general) are lazy. Most owners could verify that they work harder and, often, longer hours than any employee would tolerate. In fact, what most business owners are really longing for is a way to work more EFFICIENTLY and EFFECTIVELY.
Is Raising Fees or Increasing New Patients the Answer?
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. With insurance allowables, you also know that strategy doesn’t work across the board. 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 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 and Professional Medical Auditor myself, I agree and admittedly, I am a bit biased. But here’s the reasoning behind Mr. Borglum’s proclamation, which is both logical and true to my experience as well:
“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 …”
Chiropractors are No Different
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.
Proper Coding & Billing Makes Sense (and Dollars)
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 or $200 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 5 digit return. One of my favorite examples: 20 minutes into a visiting a client’s office, I found one error that cost them $42,000 in the previous year. I can’t calculate that ROI as the numbers are astronomical, as is the fact that once corrected, that client will reap the $42K per rewards for years to come. Similarly, I had a recent phone conversation with another client that revealed a $50,000/year coding error being made for no apparent reason that pure unadulterated ignorance. The client was uncertain whether to be depressed (that he lost that money each year for the past 15 years) or elated (that he could earn it with one small change).
Before you mistakenly believe that these things only happen in rock-star practices and that I am discovering only the rarest of gems, think again. I am certainly no superman. And my clients are amazingly human as well.
But here’s the thing: if you are making $10K/year mistakes on some items, missing $15K/year opportunities on others and uncertain how to capitalize on $25K/year possibilities in other areas of your practice, eventually that money begins to add up to big dollars and little sense if you don’t do something about it.
It’s Not ALL About Audits
Finally, I know that in recent years, there has been much written about audits. And they are a real, scary possibility for all of us. May I remind you, however, to keep things in proper perspective. Although it is possible (perhaps even probable) that many chiropractors are doing things incorrectly in terms of their billing, coding, documentation and compliance, that certainly does not mean that everyone will be audited.
On the other hand, however, if you consistently under-code or fail to bill for your services, one thing is guaranteed: you will ALWAYS be paid less than you should for your work. After all, no one will pay you, if you don’t ask properly.
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 billing and coding can help you prevent income loss
- Correct, billing and coding can help you 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. And 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.
Secondly, take an active part in improving your billing, coding and documentation knowledge. This is for both the doctor and the staff. Read blogs, articles and attend seminars.
If you are tired of being put to sleep and want more interactive instruction on proper coding, billing, documentation and business development,I have some upcoming seminars you may want to attend as long as your brain can stand 12 hours worth of material stuffed into a six hour format. Disclosure: I drink too much caffeine, talk fast and we cover a lot of ground. If you can hang (and you can), see my EVENTS page for more info and upcoming dates and locations.
Now is the time to start planning and investing in success for THIS YEAR and beyond!