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Biggest Reasons Why Medical Practices Fail to Maximize their Revenue

September 22, 2014

When we talk about medical practices, we are referring to hospitals and doctors, who are more commonly known as healthcare providers or simply providers. They diagnose, cure, advise or prescribe medicine for ailments. The fact is that even though the main task of providers is to treat patients they still need to maximize on their revenue to stay afloat. Especially in this day and age when the competition is severe. The healthcare expenditure in the U.S. is characterized as the most costly per person compared to all other countries and despite this, the quality of healthcare outcome is low.

Industry News:

According to the World Health Organization (WHO), the total health spending was approximately 17.9% of its GDP, the highest in the world. Aggregate hospital costs are $387.3 billion, which is a 63% increase since 1997. The health share of GDP is expected to reach 19.5% by 2017. The government spends about 45% to 55% on healthcare. The provider industry is pegged at $296 billion with an annual growth of around six percent.

Failure in Maximizing Revenues

From the data above one understands that there are several opportunities for the healthcare industry in the US. However, there are several reasons why they are not being able to maximize their revenues:.

  • Front office systems and procedures are weak:
    We have seen that the providers keep on following the same old technique that has been in existence. They do not try and refurbish the way the office runs. The systems that are being used in the front office or the ERP or program that the provider uses is outdated; due to which they are not being able to keep up with the latest changes; which results in providers not being able to maximize their revenues.
  • Bills contain inaccurate and outdated codes:
    The bills that are being raised many a times contain outdated codes due to which the payer does not process the bill. This results in medical practices losing out on their revenue.
  • Fee schedules are not updated:
    Many times the fee schedules that need to be paid are not updated. Due to this the payers do not know what amount needs to be paid, or if there is a revision and it is not updated they are not aware about it. This becomes another reason for revenues not maximizing.
  • Physicians downcode their level of service:
    In case of critical care services physicians often downcode their level of services and hence get paid lesser than what they should actually get. Due to this medical practices are not able to maximize their revenue.


We discussed a few reasons why medical practices are not making money. As discussed, the main aim for providers is to treat patients but along with it they have to make money to stay operational as well as deliver high quality care to patients. The issues they are facing can find recourse in outsourcing the billing process to improve their revenue. With the help of MedicalBillersandCoders.com they can have a dedicated team who can work tirelessly in ironing out the bottlenecks in the medical billing process which help them in maximizing practice revenue. MBC is a consortium of billers and coders spread all over the US and they provide customized services to around 40 specialties.


Category : Revenue Cycle Management