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 a recent 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
Additional Resources and Suggestions
One of the most basic steps towards improving your coding should include the purchase of a coding book. 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.
For an even more hands-on investment, consider a chiropractic billing seminar. Of course, I’m partial to mine, but there are several good ones out there.
Finally, some of you are leaving lots of money on the table and exposing yourself to audit risks by your lack of knowledge in the chiropractic billing, coding, documentation arena — not to mention your business strategies. You might consider submitting a FREE Practice Analysis to discuss your situation and how we may be able to assist you.