I’m Losing Money but I’ll Make it up in Volume

By Sherry L. Krueger Skrueger@hna-net.com

Do you have the right patient mix?

Patient Mix is a tricky road to navigate. Many practices just assume the more patients it sees, the more money it makes! Well, what if you could see different patients and make more? What is patient Mix? Patient Mix is the equation that leads to all the patients you see in your practice. Simply put: How many PPO patients, HMO patients, cash patients, and Medicare patients do I have? For example a typical General Practitioner runs about 85-90% on the large HMO patient mix structure. Meaning you are contracted with the top 5-10 HMO/PPO in your area because they control a large patient base. You contract with them and they fill your waiting room with patients. But are the reimbursements what you want? Usually not. You may think you make up for less money with more volume but this approach is a formula for disaster.

So let’s assume you are on this model, what would your day look like? If a typical day is 50 patients 40 of those patients would be a lower reimbursement rate of $24 for an office visit 10 would be from a higher rate category of $42 per office visit. You would have made $1380 dollars.

Now let’s change the mix! Same 50 patients seen but… 25 are from the lower rate pool at $24 25 from the higher rate pool at $42 You would have made $1650 seeing the same number of patients! $270 per day more calculated to 5 days per week and 52 weeks a year is and extra $70,200 in revenue from working smarter not harder!

For those of you in a different specialty while the numbers don’t apply the principle stays the same.

So how do you find these higher paying contracts? There are over 20,000 payers in the US. How do you know which ones have the best rates? A quick way to start is by contacting local, regional and national IPA’s and Networks. Their job is to find their doctors the best rates out there. Things to know when contacting an IPA or Network:

All IPA’s and Networks get paid from the doctor. There are several ways they can do this:

1. An upfront membership fee.
2. Contracting with the provider for a percentage of the reimbursement. (your rate is 80% but you must pay a processing fee or 3% of every claim)
3. Or the trickiest is getting paid on a percentage of savings. (They contract with you for 70% and the insurance for 80%, and they get to keep the 10%) This language is NOT in your contract!

In selecting the networks you will sign up with, you should ask the following questions:

1. If you want to know how your Network / IPA makes its money, ask if claims will run through the IPA or Network? Can they give you utilization's? These are key indicators that the IPA or Network is making money on you on the back end! If claims are being processed by the IPA or Network or they can tell you what patients you have seen they ARE getting a piece of the claim no matter what your contract says. HIPAA compliance would not allow them to see the patient records if they are not directly involved with paying the claim.
2. Are they local, regional or national? The local and regional networks can sometimes negotiate better rates if they are specialized (ex: 120 podiatrists in a major metropolitan area). Usually larger networks carry the clout of more doctors and can demand a higher reimbursement rate for their doctors.
3. Can you pick and choose the products / contracts you want to participate with? Many IPA’s and Networks REQUIRE you to take all of the products they contract for. This could not fit well with your practice. Maybe you do not want work comp or auto injury because the fees are to low or you are too specialized for the HMO model. You should have the right to opt out of any product.

>>> Reply to this article

3420 E SHEA BLVD, SUITE 130, PHOENIX, ARIZONA 85028

VOICE 877.311.3338 FAX 602.485.3100

WWW.HNA-NET.COM