Financial Wasteland: 7 Sneaky Ways Your Practice is Losing Revenue

If you’re like me, when you think of a wasteland, you probably picture an arid desert that’s void of all life—barring a few post-apocalyptic troublemakers à la Mad Max. Hollywood depictions aside, our imaginations aren’t all that far off, because the defining attribute of a wasteland is a distinct lack of growth—or potential to cultivate new growth. And if your practice is smack dab in the middle of a financial wasteland, you’ll find it hard to grow much of anything business-wise. While financial stagnation—or worse, decline—is frustrating for any practice owner or manager, it’s especially discouraging when you feel like you’re doing everything right. Fortunately, if you stay ever-vigilant and keep an eye out for the not-so-obvious signs of financial waste, you’ll have a flourishing revenue cycle in no time. With that, here are some easily-missed problems you should watch out for in your practice:

1. Over-Ordering Supplies

You’ve probably heard this sage advice before: “It’s better to be over-prepared than underprepared.” While that’s certainly sound reasoning in many cases, when it comes to ordering inventory and supplies at your practice, following this rule could lead to double work—and as a result, double spending.

Unfortunately, this is all-too-common in many practices. Sometimes, it’s simply due to oversight that results from unstructured inventory tracking. More often, though, it’s a result of multiple people placing the same order. To avoid this, make sure your inventory process is super clear and organized. If more than one person is in charge of tracking supply inventory, it’s crucial that you keep this information in one spot (like an Excel spreadsheet, for example) and notate the date every time you place a new order.

Also, check out the benefits that come with your various product subscriptions and memberships to see if you’re entitled to any product discounts. For example, WebPT Members have access to deep discounts on therapy products, equipment, and services through WebPT Marketplace.

2. Replacing or Fixing Equipment

There’s no denying that regular maintenance is important. For one thing, it ensures your patients’ safety. For another, regular upkeep helps your equipment stay in shape longer, which means you don’t have to replace it as often. Plus, maintained and calibrated equipment helps you deliver the best—and most accurate—care, thus ensuring better outcomes all around.

To keep things shipshape, make sure you get annual inspections and calibrations. Equipment manufacturers frequently offer maintenance contracts to practices that purchase their equipment new, meaning the manufacturer will perform preventative and corrective maintenance on the equipment for a certain amount of time at a set price. If you can’t get a contract with the manufacturer, consider enlisting the help of an independent medical equipment maintenance contractor. It may seem like an extra expense, but it can pay off in the long run. And you may even find it easier to remember to get regular inspections when you’re paying a monthly fee.

3. Ignoring Contract Changes

Like payer contracts, vendor contracts can change, leading to price hikes and hidden fees. So, keep track of contract expiration dates. And when a vendor sends you a new contract, make sure you really read it. If you don’t like what you see, shop around. You could also join a group purchasing organization (GPO), which can help you leverage buying power and receive vendor discounts.

4. Having High Staff Turnover

As WebPT’s Erica McDermott mentions in this post, some experts put the cost of onboarding a new employee at around $240,000. Plus, as McDermott explains in the same article, hiring the wrong person can cost you more than double the amount of his or her yearly salary. (Yikes!) So, when you find great staff, be sure to reward and recognize them for their hard work. Furthermore, make sure you’re attracting the right staff in the first place by offering competitive benefits and compensation.

Also, it’s important to hire the right people from the get-go. After all, when an employee isn’t a good fit for his or her role—or for your practice—there’s a good chance he or she will end up leaving. And hiring for fit shouldn’t boil down to skills alone. As WebPT President and Co-Founder Heidi Jannenga explains, hiring for cultural fit is crucial to creating a loyal, collaborative team. In her own words, “You can teach skills, but I don’t believe you can teach someone how to be a good person. Good culture is simply a byproduct of hiring good people.”

5. Failing to Set Clear Staff Expectations

Without clear expectations and task assignments, it’s easy for staff members to duplicate work or ignore certain duties altogether—both of which lead to wasted time and money. (The latter could even create a safety issue.) So, to avoid any confusion, make sure you outline crystal-clear expectations for every staff member. To start, write up a job description that lays out specific responsibilities for each role in your clinic. (You’ll probably need to update these descriptions periodically as your practice grows, so don’t forget to revisit them when necessary.) Also, make sure you have an employee handbook that includes all of your clinic’s policies—including those for attendance, social media, and patient payment collection. This is also a good place to include your clinic’s core values and culture commitments.

6. Pairing Patients with the Wrong Providers

As I explained in this blog post, “Patient-provider mismatches not only diminish the level of care a therapist is able to deliver, but also create some serious financial and operational problems.” So, if your practice doesn’t have a system in place for matching patients with the right therapists, then you’re almost certainly missing out on potential revenue due to patient churn. Plus, a high churn rate could also discourage other providers from sending patients your way—not to mention put a serious damper on patient-driven, word-of-mouth referrals.

7. Coding Inaccurately

Of course, when it comes to maximizing revenue, ensuring clean claims is a must. If you want to receive the payments you’re entitled to, make sure you avoid common billing mistakes like:

• omitted modifiers,
• missing certifications,
• miscounted time, and
• misused CPT codes (e.g., those for therapeutic exercise and therapeutic activity).

Fortunately, if you use an integrated documentation and billing platform—like WebPT EMR and WebPT Billing—you can easily vet and scrub claims before shipping them off to payers.

If you’re struggling to grow your practice, then you might feel stranded in the middle of a financial wasteland. Fortunately, there’s an oasis in sight; all you have to do is dodge a few avoidable hazards along the way. Do you have any revenue-boosting tips? Share them with us in the comment section below!