Are High Overhead Costs Holding You Back?
There’s so much you’d like to do to improve your practice. You know an updated office with a more comfortable feel would help enhance the patient experience, and there’s plenty of technology you’d love to invest in so you can provide even better patient care. The problem is, you can barely keep up with your current bills, and there’s no way you can take on more.
High overhead costs can really hold a practice back. Instead of focusing on growing your practice, you struggle to make ends meet each month. It’s frustrating and stressful, but there are changes you can make to get your practice back on track.
Before you can do that, you need to understand why your overhead costs have gotten so out of control. I know this can seem overwhelming, but not to worry. I’m here to help determine the source of your overhead woes so you can finally meet your full potential.
You Have Too Many Employees
Before bringing a new team member on, make sure you actually need another employee. Take a step back and look at your team’s performance. Are all team members properly trained? Did you provide them with detailed job descriptions? Do they know which systems they’re accountable for? If the answer to any of these questions is no, a little guidance from you, the practice CEO, might be what it takes to improve efficiencies and reduce overhead costs.
You Give Out Raises Just Because
If team members know they’re getting a bump in pay each year, they have no reason to improve their performance. They get a bigger paycheck but productivity doesn’t improve – leaving you with higher overhead.
Payroll should be between 20-22% of your revenue, with an additional 3-5% to cover payroll taxes and benefits. If you’re giving out raises without any increase to your revenues, I can guarantee your payroll costs are well beyond that benchmark and a source of your skyrocketing overhead.
I suggest you only give out raises when they’re earned. Make expectations clear, and let employees know exactly how they can earn more money and under what circumstances raises will be discussed. Clearly established performance measurements will give employees goals to work toward and the motivation they need to excel – which in turn will boost production numbers and put a dent in those high overhead costs.
You Can’t Remember When You Last Raised Fees
Not sure where to start? I suggest you develop a fee structure that’s fair to both you and your patients. Base your fees on solid data, and be sure to let patients know about any changes.
You Don’t Focus on Recall
I recommend empowering your Patient Coordinator to take ownership of this system, calling and scheduling a specific number of past due patients every day. You’ll get more patients in the chair and improve patient retention numbers, which will do wonders for productivity and your bottom line.
If your out-of-control overhead costs are holding you back, it’s time to make some changes. The thought of this can be overwhelming, but you don’t have to do it on your own. Feel free to contact me if you need more guidance. I’ll help get you back on the right track.
Next week: How to lower overhead costs so your practice can thrive.
For additional information on this topic and more, visit my blog: The Lighter Side
Interested in speaking to me about your practice concerns? Email email@example.com
Out of Time for a Timely Filing?
Timely filing is when an insurance company puts a time limit on claims submission. For example, if a payer has a 90-day timely filing requirement, that means you need to submit the claim within 90 days of the date of service. If you file a claim after the filing period has expired, most insurance companies will deny the claim.
Many practices write off the balance and don’t bill the patient because it was the fault of the practice. But timely filing should not stop you from chasing that insurance claim payment! When timely filing is the reason for the claim denial, it is always prudent to appeal the claim.
Some insurers require claim submissions within 30 days and others allow up to two years. To increase collection for these claim denials, it is important to know the guidelines. I have seen many claims end up being paid, even after the insurance company said time was up on them considering it.
If the provider of services became ill enough to close the practice or there was a weather condition such as a tornado, flood or hurricane, it stands to reason that the practice would not be able to get claims out. Even if you had a serious plumbing issue that closed the practice operations, you could document that and use in your defense.
One practice lost its long-time office manager to a prolonged illness and the woman they hired was not experienced and did not file the claims for six months. After appeals to the insurance companies, most of the claims were paid.
There is a huge upside to fighting the timely filing clause, and that is getting paid. But more importantly, the patients are grateful for your efforts.
Some diligent office managers go after claims much older than a year and have been successful in getting payment. Most insurance companies archive their claims after approximately three years, therefore you must request copies of the EOBs – which can only be sent to the office by mail and may take several weeks to receive.
Timely filing errors have been seen more with the advent of EFT or electronic funds transfers. The doctor will receive payment from the insurance payer directly to the bank, but the office or business manager must post the payments to each of the accounts. Since the money is in the bank, this posting is often postponed. If the posting isn’t done promptly, the risk of claims that must be appealed starts to build up to an enormous administrative problem.
One office manager who was a recent hire in a practice wrote of her shocking realization after looking at the aging report:
When putting together an appeal, write from the perspective of the patient, not the office. After all, the patient who gives you the correct information and is covered by the plan is entitled to get coverage.
Here is a story from an office manager who goes the extra mile for her patients:
“I won a timely filing appeal for a patient who had $1000 in benefits available but had only used $11 for a limited exam. She had been referred out to an endodontist and then back to the practice to place a crown. During this time the practice changed ownership. With the ensuing chaos, no one followed up on the crown claim and the letter from the insurance requesting more information. My first appeal submitted all the necessary info but was denied for timely filing. Expecting the crown payment to use all her benefits, the patient paid the endodontist out of pocket. He never submitted a claim. So, this bill for the crown was a financial hardship for her. Writing this appeal from the patient’s perspective got the claim paid to the maximum allowable.”
Need Front Office Training to learn about timely filing and good business systems? Call McKenzie Management today to schedule a personalized course.
McKenzie Newsletter Information:
To unsubscribe: To discontinue receiving the Sally McKenzie management newsletter,
click on the link at the very bottom of this page for instant removal,
To report technical problems with this newsletter or to request technical help,
please send a descriptive email to: firstname.lastname@example.org
To request services, products or general inquires about The McKenzie Management Company, LLC activities
please send a descriptive email to: email@example.com
If you would like to have any of your dental practice concerns answered personally by Sally McKenzie,
please send a descriptive email to her at: firstname.lastname@example.org
Copyrights 1980-Present The McKenzie Management Company, LLC - All Rights Reserved.