Building the right budget for your practice in 2017
With the economic uncertainty emerging out of the Affordable Care Act (ACA), it's important that physicians keep an eye on the expenses and incomes from their medical billing and coding processes. A practical budget estimate is one of the most important tools for a practice owner. The estimates help practices to identify the key factors of their revenue cycle management and what expense can actually be controlled.
Here are few basic tips to set up the right budget for 2017
Finding revenue sources
Find out how you are generating your revenues by evaluating the codes that you frequently code for. Your practice management software should be able to generate a report based on the CPT code. Review this report and find out where and which area your time is profitable and which activities when delegated to nurses and other staff can prove profitable.
Compare your analysis with standards available from MGMA or professional specialty associations.
Review a report by billing payers and identify who is paying you. What is your payer mix? Is a huge percentage of your revenue coming from one or two payers? What is the reimbursement rate for those payers?
Consider working with the payer mix to allocate in a different way, within your active patient base, to avoid a heavy concentration with any one payer, working toward a more balanced mix by Reviewing in your practice and reviewing the codes you most commonly bill for.
Review your Contracts
For possible negotiation of reimbursement rates, review your past contracts. Does the reimbursement and contracts for each payer match the terms of the contract? Is your collection percentage in line with industry averages for your specialty?
Analyzing office schedule
How far are you at booking appointments? Are they full? Does your practice allow for long and short appointments? Often times, small adjustments can improve patient wait times and increase the number of patients who can be seen in a day, reducing the lead time for call-in appointments.
Review bill schedules
Identifying and applying the appropriate level of review for complex bills, including surgical, hospital, trauma, and ambulatory surgical center bills can cost thousands of dollars in overpayments. Hire experts to review bills to ensure that Fee Schedule / UCR were applied properly.
Building your budget
Now, you may begin to establish a revenue budget or you can make adaptation to last year's revenue number that will possibly be above the 5 percent annual automatic budget increase.
On the expense side, budgeting is something more than finding the right ways to save money on you practice.
Standards and Benchmarks are accessible to consider each expense category as a percentage of your medical practice revenue.
This is indeed good beginning point to discover if your practice's expenses are in line and to establish a budget for the coming year based on your budgeted revenue. Adjustments can then be made for particular line items as required
While many think that preparing a budget means copying last year's numbers, increasing revenue by 10% and decreasing expenses by 20%, the reality should be much different. And so will the results.