Small shifts that make a big difference in finance 12 month plan to lower your overhead - PowerPoint PPT Presentation

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Small shifts that make a big difference in finance 12 month plan to lower your overhead

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  1. Steven A. Adams, CPC, CPC-H, CPC-I, CPC-P, CCS, CCS-P, PCS, FCS, COA Small shifts that make a big difference in finance12 month plan to lower your overhead

  2. So What’s Wrong?

  3. Inman Equation 4 - 5 = -1 R - OH = P It’s not 1’s fault

  4. What Can You Do?

  5. Object of the Game Average practice with a 60% Overhead Has a 5% Increase in Revenue Or a 5% Reduction in Overhead Results in a 10% Gain in Profit

  6. 5 / 10 Rule A Small Change Makes a Huge Difference

  7. Before We Begin On the financial statement, there are more than 30 lines showing us how we spend our money. But there’s only one line that focuses on how much we make. Increasing revenue while decreasing overhead is the key to financial success.

  8. A/R < 18% > 90 days Patient Debt < 20% of A/R PQRI E-Rx EMR bonus Stimulus Package ’09 Coding Correctly CCI Edits Fee Schedules / Contracts Preventive Services G0101 Q0091 G0372 99406 99407 G0102 G0179 G0180 Top Line Stuff

  9. Now Your 12 Month Plan to Reduce OH

  10. Month 1 Staffing Needs

  11. 5 Things to Consider • Largest expense 23-30% • List what you believe to be the problems in the office • Can you outsource to save money? • Have staff list top 5 things they do - look for overlaps • Look for high paid people doing low pay work mgma.com

  12. Month 2 Employee Salaries

  13. 5 Things to Consider • Don’t just count FTE’s consider a budget for staffing • Create a grid with positions and create maximum salary • Consider raises based on incentives plans for each position • Make your money their money • Show employees their entire benefit package annually salary.com

  14. Month 3 Health Insurance

  15. 5 Things to Consider • Does everyone at your office need their coverage? • Drop the dental and vision and/or charge a percentage of the premium to your employees • Consider a high deductible HSA / HRA catastrophic plan • Partially or fully fund the deductible with an “HRA” • Watch the person making this decision ehealthinsurance.com

  16. Month 4 Retirement Plan

  17. 5 Things to Consider • Pay yourself before anyone else – look out for you • IRA income limits abolished in 2010 for converting to a Roth IRA but stay for contributing • Take your 401K/201K and diversify and reallocate • Invest in an IRA through MAG with a 7% guaranteed growth rate • The average doc will need $3,000,000 in retirement to live on 12,000 per month cbpp.org

  18. Month 5 Sick Leave and Overtime

  19. 5 Things to Consider • Average sick is 5 days, average vacation is 10 days • Update policy manual to reflect separation pay and unused time • Just switch to CAL time 17 work hours for 1 CAL hour • Make your time their time • Why are your employees working over time

  20. Month 6 Lease Agreements

  21. 5 Things to Consider • Operating stop provisions • Net rentable space and net usable space • Is the insurance necessary • Would it be cheaper in the long run to own a building than to rent office space • Look at the leases and interest on your equipment – you’re killing me officefinder.com

  22. Month 7 Medical, Lab and Office Supplies

  23. 5 Things to Consider • Make a budget and stick to it – Tie it into a staff bonus – Make your money their money • Consider ILS through MAG • Have one person responsible for supplies • If pass through billing for labs check the bills • Requisitions forms work and should be reconciled by you magmutual.com

  24. Month 8 Outside Services

  25. 5 Things to Consider • Usually overlooked • Outside services CAN save you money and help ensure compliance: • (coding and documentation, payroll, bookkeeping, billing, collections, budgeting, yard, janitorial, hardware, software, HR management) • Inquire about free services available from vendors, IPA, Malpractice • You’re paying for advice, so listen • Always ask for a discount sadams@magmutual.com

  26. Month 9 Postage and Telephone Calls

  27. 5 Things to Consider • Stop sending indefinite statements • Use a system like MD Messages to confirm patient appointments and for lab results • Look at having statements done off-site by your billing vendor • Look at stamps.com instead of a meter • Put in a 900 line for rx refills mdmessages.com

  28. Month 10 Advertising

  29. 5 Things to Consider • How did your patient find you in the first place? • Satisfaction survey helps show you what works • Did the color add in the yellow pages work? • Are you on the web? • Its always cheaper to keep an existing patient than to find a new one. Marketing never stops masseyeandear.org

  30. Month 11 Patient Refunds

  31. 5 Things to Consider • Refunds are not a good thing • Patient refunds should be researched to find out what went wrong? • Refunds to governmental and private payers must be made immediately • Make sure you find out why a plan requested money back • Take corrective action – keep that cash magmutual.com

  32. Month 12 Petty Cash, Bank Charges and Other Things That Cost You Money

  33. 5 Things to Consider • Make sure all petty cash is accounted for with receipts • Make sure you only have one receipt book at the front desk • Call the bank and ask if there is another option for your primary account based on your activity • If you use a credit card do you have one with points that can be used for future purchases • Call your mobile carrier and find a way to reduce costs magmutual.com

  34. Remember…

  35. Object of the Game Average practice with a 60% Overhead Has a 5% Increase in Revenue Or a 5% Reduction in Overhead Results in a 10% Gain in Profit

  36. Any Questions Office: 888.624.6474 Direct: 770.241.4344 E-Fax: 404-848-8661 E-mail: sadams@magmutual.com Facebook: facebook.com/people/Steven-Adams/1154124331