The five mistakes below are so common that almost every business owner has made at least one of them.
1. Not Knowing Your Best Patients
This sounds very inhumane. I get it. All patients are important and there are plenty of situations during which we need to be conscious of our moral obligations to treat. Particularly when you're starting a new practice, any patient is a good customer. But as you grow, you need to be more strategic by looking at your data. Identify who your best patients are by looking at the return on your treatment investment. Identify your best CPT codes, ICD-10 codes and payer reimbursements. Consider what you like to do the most. Your goal should be to adjust your marketing efforts to bring in more prospects that match your ideal criteria.
John’s tip: Use automated marketing systems that make this lucrative project easy. For example, TRAKnet has a few automated options that are integrated right into the software.
2. Blowing Through Your Marketing Budget Without Analysis
Even the most seasoned entrepreneurs fall into this trap. I have seen far too many practice owners do just a little keyword research, set up some Facebook ads and call it a day. Sure, the ads received clicks. But they did result in patients? And are they the patients that are typically defined as your “best patients”? Identify two to three marketing channels that you want to test. Allocate a small budget to these tests and track the return on investment to ensure they are profitable. Only then should you scale them to spend your budget on channels that worked.
John’s tip: Always have re-targeting campaigns set up for prospects that visit your website. The cost to keep those campaigns going is cents on the dollar as compared to your base ad campaigns. It often pays to use companies who can turn-key this initiative for you. Top Practices (toppractices.com) is one such company.
3. Not Understanding The Importance Of Having Working Capital
Far too many doctors defer looking at their finances on a regular basis. Many have never created a budget. Without working capital, a business owner won’t be able to grow their company or pay bills, employees and vendors.Identify your working capital needs beyond the cash that you already have. If you are falling short, you can be proactive rather than reactive by either trimming down on expenses or applying for a business loan.
John’s tip: Get your financial documents in order and review your end of year profit and loss statement and year over year variations in revenue and expenses. After that, create a 2019 budget.
4. Hiring The Wrong People
Be aware of the “halo effect”, whereby we assume that because people are good at doing A, they will also be good at doing B, C and D (or the reverse—because they are bad at doing A, they will also be bad at doing B, C and D). This causes a pitfall of liking a potential candidate based on a few traits while glancing over red flags and missing skills. Craft job postings that are unique to what you need in a candidate and that fit your company's culture. Don't copy another company's job description.
John’s tip: Base your hire to match your practice’s job descriptions. Perform comprehensive interviews that are both question-based (but know the law and what you CAN’T ask!) as well as role-playing. Have the candidate also interact with other members of your staff in order to assess the “cultural fit”. Provide abundant training, feedback, and performance reviews. Be slow to hire…but fast to fire!
5. Be Keenly Aware of Your Utilization Profile
CMS has directed its Medicare Administrative Contractors to focus audits and claim reviews on providers with consistently high error rates. It’s more important than ever to understand specifically what shortcomings could put your claims process under the microscope. High use of modifiers, documentation that is lacking medical necessity, over utilization of specific codes, etc. can all trigger a targeted audit.
John’s tip: Review your Medicare Part B Reimbursement Statistics (BMAD Data) available free to APMA Members at APMA.org. Identify your outlying areas. Keep in mind that this data is generally about 2 years lagging. TRAKnet has a real-time integrated feature known as Code Audit Compliance which helps you recognize your top CPT code utilization compared to the utilization of your peers nationwide.
Start off 2019 on the right foot (pun intended). Avoid these top 5 practice management mistakes and enjoy a prosperous new year!