Written by Peter G. Fernandez, D.C.
Sunday, 01 April 2012 00:00
|Doing your own remodeling… will cost you more.
urphy's Law” is an old adage that is typically stated as: "Anything that can go wrong will go wrong". When you start a new practice you’ll experience many examples of Murphy laws. I’ve opened over 3,000 new practices. Just when I think I’ve heard them all, a new twist on Murphy’s Law comes along. Here are a few of my favorites. I offer them with the hope that they just might help you avoid getting “Murphied”.
There is no way you can do your own construction and save money. Imagine painting your own office. You’ll have to purchase ladders, drop cloths, rollers, paint brushes, paint, paint thinner, etc… then you’ll have to spend hours doing the work... and then cleaning up. Can you paint your space cheaper than a professional painter? Heck no! Remember, the professional painter already owns his ladders, rollers, paint brushes, drop cloths, etc… he won’t have to purchase them and he’ll know how to cover twice as much wall space with less paint. And he’ll finish your paint job in 2 days vs. you doing so in one week.
I’ll tell you about an experience of mine. I was going to hire a subcontractor to pour the front steps of my new house. His bid was $1,500. When I told my contractor about the bid he said, “The H with the $1,500 – I’ll get it done for $150”… and he did. You can’t beat a pro at his own game. When you do something that is outside your expertise (chiropractic), it will cost you twice as much. Hire someone that has the expertise.
Don’t listen to your friends or relatives… they’re wrong.
Beware. When you rely on your friends’ or relatives’ advice … it will cost you more. Nothing is impossible for people who don’t have to do the work. Every one of your friends and relatives will have ideas on how you should become successful that don’t work.
There is an exception to this rule. If your friends and relatives are entrepreneurs (e.g.: started and are running a business) their advice can possibly help you. However, if they work for a salary, and have never started a business, they won’t have the foggiest idea on what you are going through. Their advice will usually be totally wrong.
To illustrate the point, I’ll relate a personal experience. A few months after I opened my practice, my mother visited. She immediately expressed her concern that I was spending too much money on my work attire. I was wearing dress pants, white shirts and ties, and dress shoes. Nothing special. My mother said, “Your brother and brother-in-law are both professionals and they go to work in khaki pants, tee shirt and tennis shoes.” Every time she visited me, I heard the same story… over and over again.
Well, at the next family reunion I cornered my brother and brother-in-law. I said, “Which one of you goes to work in khaki pants, tee shirt and tennis shoes?” They looked at me with disbelief and said, “Mom told us you did!”
As it turned out mom was wrong. Both of these professionals dressed for work like the professionals they were. They wore “professional attire” - dress pants, white shirts, ties, and dress shoes.
Don’t depend upon friends and relatives to do your remodeling.
Friends are friends. Relatives are relatives. Some are dependable… most aren’t. Some are knowledgeable about construction… most aren’t. Usually, when a doctor has friends and relatives help with office remodeling, it will take twice as long to complete because the doctor can’t get them to show up to do the construction. And every month delay in completing your remodeling costs you $15,000 to $20,000. You can’t afford this loss when opening a practice. Also, when friends and relatives do your remodeling for you, they usually do so without city permits. This will backfire on you. The city will require you to tear out your remodeling and redo it according to city code, greatly increasing your delay. Remodeling without city permits will also increase your liability, because when something goes wrong - because you intentionally didn’t follow city building codes or have them inspected by the city - and a patient gets hurt… you are guilty of neglect of patient welfare.
The day your equipment is supposed to arrive… it won’t.
We’ve all heard the old saying “When something goes wrong… blame someone else.” It’s an old saying because people do it all the time. I consulted in the opening of a new practice in California. My client doctor received a view box that was broken. He called me to complain that his view box arrived broken. I called his equipment company, raised “H” with them, and they sent him a new view box. When the new view box arrived, it too was broken. Now the doctor was really furious. He called me to complain, saying he felt I was to blame. I pointed out that the equipment company was not to blame. I wasn’t to blame. I asked him if he “really thought that I found out when his view box was due to arrive, got on a plane and traveled 1,500 miles to his practice door, and then jumped on his view box until it was broken?” I also asked him if he thought the equipment company broke their own view box before they had it delivered. It was, in fact, the delivery company that was to blame. Two lessons can be drawn from this example. First, find out where the problem really is - and then fix it. Misplacing blame doesn’t really solve anything. Second, sometimes your new equipment will arrive as scheduled… but won’t work. Murphy’s Law!
If everything seems to be going well, you obviously don’t know what the hell is going on.
If everything seems to be going well, obviously you have overlooked something. Watch out, Murphy is coming!
Did you encounter a different Murphy’s Law when starting your practice? If so, I’d like to hear about it. Send it my way at
. I’ll see that it gets published along with your name.
Dr. Peter G. Fernandez is the world’s leading authority on starting a practice. He has 30 years’ experience in starting new practices, has written four books and numerous articles on the subject, and has consulted in the opening of over 3,000 new practices. Please contact Dr. Fernandez at 10733 57th Avenue North, Seminole, Florida, 33772; 1-800-882-4476;
, or visit www.practicestarters.com.
Written by Chris Tomshack, D.C.
Sunday, 01 April 2012 00:00
ay back in 1997, I realized my wildly successful practice was, in fact, broken. And it all began with a simple question posed to me by a former high school classmate.
“Chris, where’ve you been?”
At the time, I had no answer. All day I had been busy. I saw a ton of patients, and each of their lives were improved because of the care my team and I were administering. I was feeling great about the direction my practice was going. Life was good…or so I thought.
It was summertime, which meant the sun was still shining when I left my office and drove to my daughter’s softball game around 7:30 p.m. A neighbor of mine, whose daughter was a teammate of my daughter’s, stopped me as I approached the diamond.
“Where’ve you been?” he asked. Still energized from my day, I didn’t notice his accusatory tone. I rambled on about how many patients I saw, how great I felt that I was changing lives, and how tired I was after a long, busy day.
“No,” he said. “Where’ve you been? The game’s almost over.”
I shot a glance at the scoreboard and my heart sank. It was the bottom of the last inning. The last batter was at the plate. I had missed it…again.
It was that moment…that horrible feeling…that made me realize I needed a change. I needed to build a better practice. The problem was I didn’t know where to start.
Regardless of where you’re at in your career, whether you’re like I was and you want to transform your clinic or you’re just starting out, building a practice is a scary proposition, and it’s never been more difficult than in 2012.
And why wouldn’t it be? You went to school to become a chiropractor, not a business professional. Sure, you probably thought you’d pick it up on the fly, but the reality is neither time, nor the banks, will wait for you to figure it out.
The majority of your work has been focused on becoming an expert in chiropractic techniques, not marketing, managing a staff, and running a real business.
Even if you give it your best, it might not be enough, because you likely don’t have all the answers…all the input.
An article from October of last year in The American Chiropractor reported that some 82 percent of practicing chiropractors nationwide struggle to pay their bills or don’t even pay them!
An article from October of last year in The American Chiropractor reported that some 82 percent of practicing chiropractors nationwide struggle to pay their bills or don’t even pay them! You’ve probably heard that out of all chiropractic graduates, 50 percent fail and nearly 20 percent never even use the diploma, which many spend anywhere from $150,000 to $200,000 acquiring. That’s a large debt load to service.
Now that’s just plain stupid. How is our profession supposed to achieve the level of utilization it should have with numbers like that?
Today’s chiropractor can’t just be a skilled practitioner with an enviable bedside manner. Today’s chiropractor must always remember: you are no longer just a doctor… you’re a small business owner whose business should be delivering superior patient care.
That’s key, because the majority of your day is going to be spent running your practice, and not necessarily seeing patients.
Business never stops, and neither should your education
I have a list of success secrets taped to my bathroom mirror. I committed them to memory long ago, but I still enjoy the gentle reminder each and every morning. In fact, I keep the same list in my pocket, so that I’m always able to reflect when I need to, and pass on to others some of the principles that continue to resonate with me. I learned this habit from one of my mentors.
While each secret inspires me in different ways, #4 on the list may be the one that continues to impact my life on a daily basis: “Never Stop Learning.”
To maintain success you have to constantly change and grow. Sure, becoming a doctor of chiropractic is one heck of an achievement, but unless you’re setting your sights on the next accomplishment—maybe it’s growing your clinic and your impact on your community, or maybe it’s simply providing the best care possible to your patients—complacency always leads to mediocrity. Want to become a better doctor, a better person? Become a fountain of knowledge—always keep learning. Sharpen your tools.
Read books, take some classes, do whatever you have to so you can learn how to manage a staff, market your clinic, run systems analysis and everything else that keeps your practice moving forward.
And please don’t forget: If you practice today the way you did last year, your skills are already deteriorating. Improvements are constantly being made in how we can deliver exceptional care to our patients. Let’s keep our feet out of concrete and strive to be current, to be the best. Your patients deserve it!
Oh, and while you’re in education mode, pick up some books about leadership. One that I really like is Be Great by Peter Thomas. The bottom line is you’ve got to walk the talk. Once you start improving yourself, your ability to motivate your staff will improve, and that’s crucial to your success. You’ll need to train and motivate your team EVERY DAY so that your patients always have a 100 percent positive experience.
Here’s a real life example of how important this is: A colleague recently emailed me about having to replace a front desk team member who made it clear daily they did not want to be there. Negativity can become infectious real quick, and that’s exactly what happened. This employee’s attitude infected everyone. The replacement was the exact opposite, and her presence benefited the practice immediately. For starters, the numbers started climbing and future appointments shot up after her hire!
This new team member not only brought an exciting new energy, she never forgot that serving the patients was the reason she was there. She believed in the systems that were in place and truly wanted to be there because she knew she was improving the lives of the people who walked through those doors.
That’s how big a difference having the right people on the bus can make, and it’ll be your job to not only find them, but keep them in the proper frame of mind. Always remember to train your team to ask the simple question, “What’s best for patients?” Then do it.
Some other ways to strengthen your business sense:
If you want to become a master at spotting short-term negative trends before they become financial quagmires, you’ll need to become familiar with tracking EVERYTHING. You’d be surprised how much a solid metrics analysis system can bolster the efforts of you and your team.
Also, research other successful businesses and adopt the same techniques to make your practice run effectively and efficiently. This will likely lead you down the path to systemization—it’s no secret I’m a firm believer in an office that runs on autopilot, an office with systems.
Most chiropractic clinics are personality dependent, which means if the lead doc takes a two-week vacation, patients won’t schedule their appointments until he or she returns. You need your patients to feel comfortable no matter who they interact with, and you’ll do that by having effective systems in place - systems for incredible care and systems to allow you to unplug while the office runs at peak performance.
Money: Why Can’t It Grow On Trees?
Starting a clinic is going to be expensive. Equipment. Staff salaries. Utility bills. Lease or mortgage payments. Plus a marketing budget to let people know what great services you offer.
You’ll need at least six months of capital to get you going. The worst thing that can happen is your business starts to pick up steam, but then you run out of money because you didn’t fund it properly.
For most docs this means pulling out bank loans, and that isn’t as easy as it used to be. Before the Great Recession struck, getting a loan was as easy as having a pulse. Not any more, and especially not for those with poor credit.
You’ll need at least six months of capital to get you going.
Making yourself attractive to banks is more about what you don’t do than what you do. Don’t, for example, rack up a bunch of credit card debt while you’re in school. You’re a student, live like it. Also, it’s a good idea to have money saved up. Having at least 20 percent down will not only make those monthly payments easier to handle, but will make you look like you have the discipline not to default on the loan.
You don’t have to go it alone
A few months ago I sat down with a young man who had just graduated chiropractic school. He told me his plan was to open his own practice somewhere close to where he grew up in Columbus, Ohio.
It had been his dream to start his chiropractic career by opening his own practice, rather than work as an associate, and he wanted it sooner rather than later. The problem is he didn’t have the cash, and after I told him all that went in to owning a clinic, he was perplexed. He had no idea. The key is to have mentorship readily available when opening a new practice.
Owning your own practice is great. It gives you the freedom to treat patients the way you want to, and you always leave your office feeling good that you changed lives.
And there’s nothing wrong with spending a few years under the wing of an established chiropractor. Find someone whom you admire, someone who already has success in the field, and ask them to mentor you. Most docs will jump at the chance to share their knowledge. We all get into this field for the same reason: To make the lives of our patients better!
You want to be successful? Here’s a little trick I’ve learned: Wake up early. Michael Masterson, in his book Automatic Wealth, talks at great lengths about this.
What does this mean to a practicing doc, busy all day with patients? It means this: Set your alarm clock an hour earlier than you would normally wake up. If you want to be successful and do what successful docs do, instead of watching the news, you’ll jump out of bed early enough to attack the day. First, read your goals and affirmations. Do some quality reading. Start the day by programming your mind for success. Skip the news entirely.
You want to be successful? Here’s a little trick I’ve learned: Wake up early.
Morning is also a great time to exercise. If I don’t work out right in the morning, it just doesn’t get done, and this is such an important step. You must maintain your health if you want to preach to others about theirs. While you’re working out, listen to audio books so that you’re feeding your mind while improving your body.
Remember: successful doctors do what unsuccessful doctors refuse to do. It costs you nothing to wake up an hour earlier, and before you know it, 30 days later, it becomes part of your routine. Be diligent.
Steve Prefontaine, an Olympic runner from back in the 70s, had an awesome quote, which was "to give anything less than your best is to sacrifice the gift." Let’s not sacrifice the gift. Live to your full potential.
Building a practice in 2012 can be a struggle, but if you understand first what you must do to reach that point, it will be a whole lot easier. Even if you’ve got a successful practice now, make sure you hold on to that success by continuing to change and grow. It took me feeling like I let my daughter down to evolve my thinking and actions. Don’t let it get to that point for you. Now get to work!
Chris Tomshack, D.C., is CEO of HealthSource Chiropractic and Progressive Rehab® and currently oversees 346 offices throughout the nation. By supplying its doctors with a comprehensive set of systems, HealthSource positions its clinics to provide a singularly unique health care experience to patients, while focusing on community outreach and educational programs. HealthSource Chiropractic can be reached by calling 440-934-5858. For more information on HealthSource go to www.HealthSourceChiro.com
Written by Williams Owens Jr., DC, DAAMLP, CPC
Friday, 16 March 2012 22:56
t wasn’t until 1983 that the American Medical Association changed is stance on affiliation with chiropractors as being unethical. That is not too long ago and it seems that, in some circles, the medical community is coming around faster than the chiropractic community; chiropractors are good at holding grudges. The truth is, it is not about chiropractic, physical therapy or medicine, it is about patients. The research is building on the benefits of chiropractic care and many (not all) of our educational institutions are contributing to the literature. It is time that you stop confusing the politics of medicine with community medical providers; they are generally not the same. Many of the local MDs that I work with on a daily basis and the ones I learn about while consulting across the country are open to learning about chiropractic. That openness includes genuine interest in a drug-free and non-surgical option for their patients as well as simply loving chiropractors because we refer patients! In the end, it doesn’t matter because we are trained to care for patients, and the more we can do that, the better.
I am not talking about assimilating into the medical model, running a MD/DC practice or being afraid to talk Subluxation to medical providers. I know for a fact that you can have the referrals and stay genuine to the chiropractic model, which is why the MD sends referrals to me and not the physiatrist or PT. The beauty is in chiropractic being a separate and distinct profession doing what no other health profession does. MDs will listen to and understand the chiropractic model, as long as it is not given to them as though they were a patient. There is a HUGE difference between a patient report of findings and an MD report of findings. The major tenets of chiropractic are why we are the third largest healing profession in the United States, and we need to be better at explaining it instead of running away from it. After all, it has gotten us this far hasn’t it?
The chiropractic Achilles heel is our self doubt when it comes to communicating effectively with medical professionals around our practices. For 116 years doctors of chiropractic have been the very best at educating our patients. We have stellar reputations and enjoy the highest patient satisfaction rate of any healthcare profession. What we are lacking is translating that ability in teaching to the medical community. The trick is to understand how to communicate in the fast-paced healthcare environment with the same effort and effectiveness we have at spinal screenings and patient education seminars. The number one way to communicate effectively is through reporting. In my private practice, I have learned a lot about orofacial pain management, orthopedic and neurological surgery, trigger point, epidural and facet joint injections as well as how a rheumatologist or neuropsychologist evaluates a patient. I learned over time which doctors were thorough and which ones cut corners. I looked at which ones provide information as part of a team and include chiropractic and which ones don’t. How was all this possible? I read their reports! Medical doctors are trained to create and read reports. That is how they communicate and it allows them to be instantly updated.
Currently the chiropractic profession is severely deficient in modern reporting techniques and this is hurting our ability to break out of the 7% utilization rate. After 116 years we continue to treat less than 10% of the population. Why? The reason is we have not been able to build advocates through reporting. Our reports are filled with technical chiropractic jargon, which would be great if chiropractors referred to each other, but we don’t. We need to focus on reporting the patient’s condition in a manner that builds confidence in our clinical abilities and the assessments of our patients. We need to be out in the community giving MDs reports of findings and building advocates all around us. It is only then that we will see the other 93% of the population.
Dr. Owens has established the nation’s first chiropractic elective in a Family Residency Program with the SUNY at Buffalo School of Medicine and Biomedical Sciences. He has developed and credentials chiropractors to teach courses approved for CME credit to the medical community. He can be reached at 716-228-3847.
Written by Tom Owen III
Friday, 16 March 2012 22:49
lthough chiropractors are generally hardworking, dedicated professionals who strive to correct subluxations in order to benefit the overall well-being of their patients and community, they still might be clueless on how to run an efficient and profitable practice. Technique expertise and talent are not enough.
Matter of fact, the myth upon graduating simply isn't true. We've all heard it before: Get your degree, drive down the road until you run out of gas, throw up a shingle, and watch the new patients flood in. Any chiropractor practicing in today's economy will tell you it's simply not true!
So where does one start?
Many successful entrepreneurs will tell you their success stemmed from some form of coaching or consulting.
What? You've never seen yourself as an entrepreneur?
Well face reality because you are! It's up to you to go out and build a business around your definition of chiropractic. Unlike medical doctors, you don't have the luxury of joining the local hospital in order to draw a paycheck. Your time, energy, and entrepreneurial spirit are what pay the bills.
Some doctors believe success lies in establishing good rapport and having a positive reputation within their community. Even though those things are essential, they aren't the foundation of a successful business model that's part of an efficient system toward future growth. These types of chiropractors would avoid many mistakes, pitfalls, and loss of money simply by following the guidance of a well-seasoned coach.
For the graduating chiropractor, even more variables come into play. You need to thoroughly understand your market and the potential patients you'll serve. One way this is done is by performing a thorough demographic analysis. This helps you identify your target market as well as how many chiropractors are currently practicing in your chosen market. The physical location of your chiropractic office is also very important. But the aforementioned is just the start. Consider this: what should you consider before signing a lease? What about leasehold improvements? Do you know how to negotiate with a landlord for optimal financial benefits? That's just scratching the surface. We haven't even talked about how to determine what type of marketing works within the community you've chosen!
Although it is hard to make any accurate comparison between chiropractic and top athletes, sports coaching might serve as a good example. Even when reaching a high level of expertise, skill and recognition, top athletes still require a coach to supervise their training. This is because no matter how hardworking and dedicated they may be, they still might forget or miss certain details that will impair their performance in the long run. Being able to control and keep track of all nutritional requirements, vitamin supplements, motivation to train harder or any small injuries is frequently beyond the abilities of even the most disciplined athlete. Additionally, it is difficult to push themselves hard enough in their training to reach peak performance. Although a few adjustments to this comparison are required, it does not have to be different with a skilled and dedicated chiropractor.
Additionally, once your practice is up and running, maybe you'd like to spread those entrepreneurial wings even further. What better way to do so than by utilizing a coach that understands the dynamics of running either an associate practice or multiple practices spread out through various different communities.
By utilizing an experienced coach, you can avoid many headaches! A highly trained coach who possesses the necessary expertise with financial details, advertising and promoting, and business management will benefit you greatly in the long run, leaving you focused solely on your practice and on refining your skills.
Written by Ray Foxworth, D.C., FICC, MCS-P
Friday, 16 March 2012 20:02
1 Know Your Numbers
any doctors do not really know the cost of doing business. We THINK we know about what it costs to run our practice. You may know what your monthly expenses are, but do you know the actual cost of providing an office visit? Don’t fool yourself into thinking it costs the same to adjust 10 patients as it does 25, just because you are already there.
According to whose numbers you read, overhead in a typical clinic runs about 50%. Don’t assume this is your number! A recent article I read suggested the following formula to determine your overhead. While it may not be 100% accurate, it will give you a ballpark number.
Unless you know your numbers, you are at a serious disadvantage when it comes to deciding to participate in your managed care contracts or other provider agreements. While it may be great to be “on the list”, if the list you are on is paying you LESS than what it costs to provide care, you are better off being OFF the list!
Otherwise, it’s like buying oranges for a dime and selling them for a nickel and wondering why you aren’t making any money. Getting a bigger truck is NOT the solution! Signing MORE contracts for less money than the cost of providing care is NOT the answer to improving your practice! You can’t make up for a loss by increasing volume.
2 Let’ Talk Fees….or Perhaps Let’s DON’T!
You never want to “talk fees” with your colleagues. This is considered price-fixing and there is a law against it that can land you in hot water. You would be amazed how many times we hear doctors say they just asked friends around their area to see what the going rates were. This is flat out illegal…so don’t do it! Don’t take our word for it; here’s the definition of price fixing and a link to the Department of Justice:
Price fixing is an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold. It is not necessary that the competitors agree to charge exactly the same price, or that every competitor in a given industry join the conspiracy. Price fixing can take many forms, and any agreement that restricts price competition violates the law. In many cases, participants in a price-fixing conspiracy also establish some type of policing mechanism to make sure that everyone adheres to the agreement. http://www.justice.gov/atr/public/guidelines/211578.htm
So, for obvious reasons, we won’t get into how much YOU should charge, but we can encourage you to at least review where you are in relation to others in your area using the resources that are available.
Knowing what ALL doctors, not just chiropractors, are charging in your area is just a good business practice to make sure you maximize your income when possible. You could be charging less and getting paid less than everyone around you and never know it. There are several resources to assist you in finding out the fees in your immediate area. You’ll want to use these resources to help you determine your ACTUAL fee. More about what your ACTUAL fee is in a few minutes.
So, How Many Different Types of Fees Can You Name?
Here is a sample list from the National Association of Heath Underwriters to get you started!
- Actual Fee – What you actually charge for a service. (Typically your “highest fee”, also known as “my normal fee” or “what I would like to get paid”!)
- UCR fee schedule – Charges of health care providers that are consistent with charges from similar providers for identical or similar services in a given locale.
- Global Fees – Negotiated fees that are all-inclusive (one fee is paid for the entire range of services provided for a specific episode or episode of care.)
- Negotiated Fees – Managed care plans and providers mutually agree on set fees for each service. This negotiated rate is usually based on services defined by the Current Procedural Terminology (CPT) codes, generally at a discount from what the provider would usually charge. Providers cannot charge more than this fee.
- Prevailing fees – Amounts charged by health care providers that are consistent with charges from similar providers for identical or similar services in a given locale.
- Allowable fees – Fees permissible by health plans, or mandated programs such as Medicare, Medicaid or Workers Compensation and PIP.
- Contracted fees – Fees agreed to under a managed care or preferred provider agreement.
- Mandated fees – Fees set by state and or federal programs such as Medicare, Medicaid, PIP and Workers’ Compensation
- Approved Amounts –The amount Medicare determines is reasonable for a service covered under Medicare Part B. It may be less than the actual charge. For many services, including physician services, the approved amount is taken from a fee schedule that assigns a dollar value to all Medicare-covered services that are paid under that fee schedule.
I am sure there are more types of “fees” but obviously this is enough to confuse the issue for most of us. Now, here is YOUR challenge. Regardless of how many types of fees there are, YOU should have ONE fee in your clinic as your “ACTUAL FEE”. Your ACTUAL FEE is part of your FEE SYSTEM.
This is a ROCK solid way to set up your fee system
Your fee system reflects the range of fees you accept as part of your managed care agreements, your participation in mandated programs such as Medicare, Medicaid or PIP and Workers’ Comp, if they are regulated in your state.
While all of these fees may be different, this does NOT mean you have a dual fee system. Why? Because they are “contracted discounts” off your Actual Fee, or they are mandated fees set by either the state or federal government.
Did you notice that nowhere in this list did you see my cash fee, my PI fee, my workers’ comp fee, my family plan fee, my Uncle Dudley fee, or my buy 10 visits get one free fee! Why...because they shouldn’t exist!
3 Develop a Fee System and Stop Playing Let’s Make a Deal!
Your fee is your fee is your fee. Period! Or it should be!
Step back from the laundry list of “fees” you may now have in your office and start thinking in terms of “what is my ACTUAL fee” for each procedure in the clinic. Break the habit of your fee being based on payer type. Insurance companies ARE sending letters to doctors asking if they offer any type of discounts to patients, and IF so, how they are reflected on the claim form. Guess what? There is NO place on a CMS 1500 claim form to SHOW a discount. Do you smell a rat?
If you have your fee system set up properly, you should be able to answer the above question like this, “I only have one fee for my clinic services and the only time that fee is discounted is when it is part of a contractual network agreement or a documented financial hardship.” This is a ROCK solid way to set up your fee system and IF you follow it in practice, you’ll be able to practice with much more peace of mind!
Now let’s look further at this “fee system”. Within your fee system, there are layers. (UCR Fee Schedule, Contracted Fee Schedules, Mandated Fee Schedules and Hardship Agreements).
Review the diagram to better understand the Fee System Concept:
4 Build Your Fee Schedule and Your Financial Policy!
Once you’ve identified your Actual fee, then make SURE you are letting your patients, EVEN YOUR CASH PATIENTS, know these are your REAL fees! Many doctors have been giving discounts to their cash patients and have NEVER let them know what their real fees were! If you’ve been in practice very long, you’ve probably had this come back to bite you when the cash patient gets involved in an auto accident and gets the Explanation of Benefits and sees your REAL fees for the first time. NOT A PRETTY SIGHT! Once you have determined your actual fees for services, stick with them until you evaluate your fees in the next year or at some given interval.
Now let’s talk about an Office Financial Policy. Having a proper Fee System allows you to set up a simple office policy that can be summarized on a single piece of paper! Keep it simple and straight-forward.
If you find yourself or any of your staff saying, “Wait until Suzy comes back and she can review our financial policy with you” then it is too complicated. Anyone who is at the front desk should be able to discuss the basics. If they can’t, you have to ask yourself why not. Is your fee schedule really dependant upon who is paying the bill?
If your fee system is set up properly, and you have an ACTUAL fee established for your services, then the only time that you should charge LESS is when there is a contractual obligation or special circumstances. After you have set your policy, follow it! All patients should be aware of the financial policy. Here is a good example of a simple but solid policy:
What about pre-paid care plans and time of service discounts? Are they legal?
That depends on whom you ask and where you practice. In some states, collecting in advance or offering “unlimited care at a fixed fee” is considered the business of insurance and is prohibited, unless you want to go apply for an insurance license!
Some states require doctors to “escrow” the funds you have collected in advance and only draw down funds as services are rendered. IF you have determined they are legal where you practice, make sure you dig deeper just to be on the safe side. Don’t rely on the word of your colleagues who may say, “We’ve been doing that for years,” so it must be ok. Because something is commonplace does not mean it is legal.
If you are offering these plans you should find out if you can offer the plan to insured patients. Some provider agreements prohibit collecting any part of the deductible or copayments IN ADVANCE of services rendered. So, read your agreements closely. Our consultants advise us to NEVER collect in advance on federally insured patients like those with Medicare.
We obviously like patients to commit to treatment plans and pre-pay plans seem to help them stick with it. A popular alternative that avoids the problems with some pre-pay plans is a good auto-debit system that incorporates legal network discounts offered by a Discount Medical Plan Organization. This type of system allows you to offer discounts to insured patients on their NON-covered services. You simply set them up on auto-debit and have the patient sign an agreement to receive care and debit their credit card or bank account weekly, bi-weekly or monthly. You should NOT offer discounts on deductibles and co-payments, but only on non-covered services (like the visits when insurance runs out). With auto-debit, the patient is simply paying on their account, after services are rendered, which avoids the problems of collecting deductibles and copayments in advance.
I would also suggest you avoid offering free services as a reward for someone committing to 10 or 20 or X number of visits. These offers are still an inducement if someone else (like the government) is paying the bill. There is a $10,000.00 fine PER occurrence for this type of violation.
Now, a bit more about Time of Service or Prompt Payment Discounts. Here are the facts as we know them:
- Time of service discounts ARE permitted in a few states.
- Not all states define the percentage allowed.
- Even if your state DOES permit Time of Service Discounts, state laws do NOT supersede federal laws and you should be mindful of federal regulations regarding charging “Fair Market Value”.
- The OIG did issue an opinion to a hospital in 2009 indicating that between 5% and 15% could be considered a “reasonable” prompt payment discount. BUT… there were restrictions on WHEN it could be offered, and it could not be advertised (and that does not mean an ad run in a newspaper…word of mouth can constitute advertising!) There were some other caveats as well.
While a time of service discount may be permissible in some states, the problem is that far too many doctors hide behind this term when what they are really doing is trying to hide a dual fee schedule. The discounts they offer are FAR above any reasonable bookkeeping reduction. Our advice is to confirm what your state permits and, if NOT defined, err on the side of caution and follow the OIG’s guidance of 5%-15%.
5 Keep it Current!
Do you review your fees annually? Some carriers raise their fees at the first of the year, others in April and some in June. Talk to provider services and get the date on your reminder system to have someone verify the allowable; they do change and you could be leaving revenue on the table.
6 Train Your Staff!
Congratulations, you have developed a fee system, and you put it in writing, now what? Train your staff! There are rules and regulations when it comes to operating your own clinic. Is your staff up on the latest information available? If not, then you are putting them and yourself at risk! There is a wealth of information and training material available through your state association and companies/consultants that specialize in the field of chiropractic.
What you measure improves. Monitor to ensure your staff fully executes your financial policies. Review your financial policy during weekly team meetings and see if every new patient the prior week had their financial policy formally covered. You know how important a good report of findings is for patients. Treat the financial review with just as much importance. Money or confusion about responsibility is one of the top reasons patients drop out of care. This is an easy fix with a sound financial policy. If your staff receives resistance from any patients about your new policy, problem-solve it together. Talk about it and remember to congratulate them for following policy.
7 Things to Avoid!
- Do not undermine your front desk and insurance staff by talking fees with patients UNLESS that is YOUR normal office policy. Set and follow your policy and let them do the talking.
- Do not have inconsistent collection policies. Set and follow your policies on collections and apply them equally to all patients.
- Do not tweak your coding to allow for “lower fees”. This is called down coding and many doctors do this if they are trying to lower the fee to a cash patient. Consider using a proper Discount Medical Plan Organization which will eliminate the need for this improper coding and will allow you to document, code, bill, AND discount correctly.
- Do not base your fees or codes on payer type. You should have ONE fee and stick with it. The only time you should discount is when there is a contractual agreement or mandated fee schedule or the patient truly qualifies for your hardship policy. Base CPT coding on payer type ONLY if it’s required by contract or mandate.
Okay… there aren’t just 7 steps; here are a few more pointers!
8 Do you offer discounts?
If so, there are TWO areas of concern to consider:
- Legal Implications: If you do offer discounts, BE CAREFUL! Offering discounts the WRONG WAY can cost you. There are real fines and penalties associated with improper discounts and inducements. If you’d like to review an article on the legalities of offering discounts go to www.chirohealthusa.com/DoingTheRightThing
- Financial Implications: You must know your profit margin to determine if the discounts you are offering allow you to remain profitable. We see far too often that docs are willing to offer discounts without regard to their expenses or maintaining a profit margin. What they fail to realize is that offering a discount to the uninsured or underinsured may be helpful, but it should also be reasonable and not at or below your cost of rendering the services.
How can a discount impact your practice? Did you know that if you were seeing 100 patients a week, and you collected 100.00 per visit, that if you decided to cut your fees by 25% to “attract” more patients, you would literally have to see 133 visits to collect the same revenue! So do the math and make sure you are maximizing reimbursement by at least having your Actual Fee at UCR for your community, and if you offer discounts, offer them within reason and make sure you aren’t charging less than what it costs you to deliver the care.
9 Action Steps!
- Review and set your fees – Determine your ACTUAL fee and stick with it!
- Implement your Financial Policy based on your Fee System
- Consider joining a DMPO if you are offering discounts. These plans allow you to document correctly, code correctly, bill correctly and, IF you are offering discounts, discount correctly and practice with more peace of mind.
Article submitted by ChiroHealthUSA
Dr. Foxworth is a certified Medical Compliance Specialist and President of ChiroHealthUSA. A practicing Chiropractor, he remains “in the trenches” facing challenges with billing, coding, documentation and compliance. He is a former President of the Mississippi Chiropractic Association and served 12 years on the Mississippi State Board of Health. He is a Fellow of the International College of Chiropractic, as well as member of the ACA. You can contact Dr. Foxworth at 1-888-719-9990 or
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