How Well Do You Know Your Practice

Multiple times a week, I have the same conversation with a practice.

It always starts with a simple question. How many claims do you file a week? Where are your denials coming from? How much do you make on each procedure you do?

The practice size may as well be irrelevant. I’ve gotten blank stares from practices making $10,000 a month, practices making $100,000 a month, and - just this week - practices making $1,000,000 a month.

Each of these doctors could tell me, probably to the penny, how much they took out of the bank account. But what about the more important questions? How did the money get there? What could the practice have made this month? What should the practice have made this month?

Doing this work is harder than it should be. The dirty secret of medical billing is that the work is easy, it’s getting the data that’s hard.

One day, I’ll publish a full article on why healthcare data is so messy Congress needed to be involved. The one-line version is that because data is spread across so many platforms (EMR, PM, clearinghouse, payer portals, etc.), most practices lack a clean source of truth.

In the accounting world, they call this a ledger – one table with every transaction. A working practice ledger is gold. If you have it, the answers to all these questions are a couple simple Excel manipulations (or ChatGPT queries) away.

At Atlas, we do a lot of work for our practices integrating data sources to create this ledger in our software. From that ledger, we run automated analyses to figure out where to spend our time. To be clear, the ledger itself isn’t special. Downloaded to Excel, the simple version looks like this:

Time to get those reading glasses out!

All it says is “for every appointment you had, how much did you charge, how much were you paid, and by whom”. There are many helpful questions you can ask from this.

• How much do different insurance companies pay for the same work? How often do they deny claims?
• What is the reimbursement rate on different procedures? How often are they denied?
• Why do claims get denied in the first place? What could we solve to prevent them from happening in the first place?

It doesn’t take much to combine this with other datasets and ask the key questions you want to know. Most multi-doctor practices will ask how much each doctor is bringing in. Not only can this tell you how much they could bring in (based on procedure / insurer mix), but how it compares to what they’re taking out (we recommend a minimum 3x ratio for mid-levels and 2.5x for MDs).

At Atlas, we often help doctors use this to build simple models for how much profit they make on each procedure. We factor in everything - supplies and staff time involved, denial / underpayment rates, whatever comes in. If you want a copy of those template reports, just reply and I’ll be happy to send it on.

The point isn’t to drown a practice in Excel. It’s to hand them tools to make decisions.

So that I don’t get the same questions this week … if you don’t know where to find this data, ask your biller. If they’re giving you regular reports, some kind of ledger is probably what underlies it.

Check how good it is. If you’ve got a quality, up-to-date one, great. Start asking the questions you need to ask to get a handle on your business.

It’s hard to improve something you can’t see. Once you have a handle on what’s happening in your own four walls, improvements will fall right out. A straightforward ledger is the first step on that journey.

If I or my team can be of service, feel free to grab time.

Onwards and upwards,

David