Medical Billing is a Significant Part of Selling Your Practice
Selling your practice involves a great many tasks that need to be accomplished to have a successful transition. One of the most overlooked but one of the most critical is medical billing.
Medical Billing Realities
Most patients of your practice don’t pay in full for office visits with cash. There are some patients who pay their copays by credit card on their way out the door, but in most instances, you have to bill each individual’s insurance company for reimbursement for services you provided. If you’re in a solo practice, you rely heavily on revenue cycle management, the timely submissions of claims, and reimbursement from insurance carriers to keep the doors open and the lights on. But it’s not uncommon to find a private practice physician waiting weeks or even months for reimbursement. That’s going to make a prospective buyer wince.
It’s important to understand a new owner’s perspective on medical billing so that your practice looks attractive and you can have a seamless transition. Part of the buyer’s due diligence will be reviewing your accounts receivables to see the outstanding money owed to the practice. This will be an important metric that shows the effectiveness of your collection procedure and the efficiency of your practice’s revenue cycle performance.
Benchmarking in Your Medical Practice
Your practice’s billing service is a terrific source of benchmark data and can give potential buyers a real sense of how your business is run. This data can show you and potential buyers a big picture of your billing and reimbursement trends compared to similar practices in your area and specialty. Billing benchmarks typically come under one of two categories: operational and revenue. Most practice advisors like Sacramento medical practice advisor Andrew Rogerson suggest benchmarking the following metrics as a start:
· The operational benchmarks include: (i) the number of patient encounters per provider; (ii) the number of procedures performed per provider; (iii) a payroll analyses with total payroll as a percent of revenue and overtime hours as a percent of payroll; and (iv) the average hold time, the average wait time, and the average time to appointment for new and established patients.
· Revenue benchmarks can include: (i) the number of days in AR; (ii) the adjustments as both a percentage and dollar figure; (iii) the total revenue and A/R by provider; and (iv) the rejection and denial rate.
Improving Your Practice’s Medical Billing
Upgrading your office’s medical billing practices can help promote your business for sale to potential buyers. Increasing the amount you collect goes to your practice’s bottom line.
There are several ways to do this. One is to use up-to-date medical billing software to more quickly determine whether claims are likely to be accepted or denied based on the constantly changing billing rules for insurance plans and government programs like Medicare and Medicaid.
You can also consider offering a variety of payment options for those patients who have larger outstanding bills and have trouble paying the amount in full all at once. Along those same lines, allow your patients to settle their bills online with a credit or debit card.
These ideas can help decrease the outstanding balances and show that your practice is operating in the black.
Selling Your Medical Practice
Selling your practice can be a wise move, but be certain that you know what you have when it comes to your medical billing. It’s just one of the many steps to successfully sell a medical practice. Click this link if you would like a one-page summary of the Many Steps to Sell a Medical Practice.
Visit Rogerson Business Service website for information or call Andrew Rogerson at (916) 570-2674.