Healthcare CPAs Provide Help to Improve the Health of Your Bottom Line

by Sophia Bennett

Declining reimbursement rates are one of the top problems facing medical clinics today. Given that private and government insurance plans are facing challenges of their own, this trend is likely to continue for a long time.

But there are things medical practices can do to combat the problem of shrinking reimbursements—and smaller profits overall. It’s important to really examine and understand your practice’s reimbursement contracts so you’re in a good position to negotiate with insurance companies.

And there are other things medical practices can do to keep expenses low and the bottom line looking healthy. Jeremy Prickel and Nicole McOmber with Jones & Roth CPAs and Business Advisors, one of Oregon’s largest CPA firms, share several of the tips they give clients looking to save money while never compromising patient care.

Be Proactive about Contract Negotiations
When it comes to securing better reimbursement rates from insurance companies, there are several things medical practices can do to put themselves in a powerful position. McOmber points out that it’s important to be proactive about when it’s time to negotiate.

That way, if you feel like you’re getting a bad deal, you can take the first available opportunity to approach the insurance company and ask for a better rate.

To determine what that rate should be, and make the case for why you need it, pull all your existing contracts and “really comb through them to determine who your higher volume payers are,” McOmber says. “That will help your practice analyze your entire contract situation and determine where you need to dive deeper.”

If an insurance company really isn’t paying enough to cover the cost of serving your patients, it may be appropriate to reject a contract. In making that decision, it helps to have good financial statements that truly reflect income and expenses. It also helps to have an experienced partner who can help you determine the best course of action.
There’s a perception that CPAs can only help prepare financial statements and file taxes.

The right firm can do much more. Jones & Roth routinely helps medical practices with things like determining physician compensation schedules, business planning, establishing policies and procedures, and helping with contract review and negotiation.

“There’s a whole spectrum of challenges doctors run into, from dealing with human resources issues to technology changes and policy reforms,” McOmber says. “Our role is to come in and help them with anything they need.”

Prickel often asks the question: “Even if you have a CPA who does taxes, do you have a CPA who helps you manage your business, your efficiency and your practice overall?” There have been instances where Jones & Roth worked on everything but a medical practice’s tax returns.

Take Advantage of Cost Savings, Economies of Scale
Even if a company can get their reimbursement rates to remain the same, costs are going up all the time. Medical practices can also improve their financial situation with some basic belt-tightening and best practice implementation.

“Physicians need to learn how to save better and be really efficient in their practices,” Prickel says.

That means examining everything from supply costs and staffing ratios. It can sound like a painful process, but there are some relatively easy ways to do it. “We use a tool from Medical Group Managers Association that provides ratios for best practices,” Prickel says.

“We can actually take a group’s financial statements and benchmark them with their peers. It helps them get an idea of how they’re doing in terms of expense management, production and salaries.”

Thanks to Prickel and McOmber’s years of experience in Jones & Roth’s healthcare niche, they can share ideas designed to help medical practices achieve better economies of scale. In urban areas, doctors are connecting with hospitals and larger medical groups. In rural areas, medical practices can propose becoming a satellite office for one of the larger providers in their region. Even people with extreme specialties can partner to cut overhead and other costs.

“We see them partnering with practitioners in a specialty that complements theirs,” McOmber says.

Having a partner that’s aware of industry trends can be a huge benefit to medical practices. Part of Jones & Roth’s expertise comes from their practice of loaning their staff out to offices that need an administrator on a temporary basis.

“It gives us experience managing medical practices,” Prickel points out. “We learn how to fix things and troubleshoot problems in the real world.”

All staff members get some of that real-world experience by visiting every new medical practice when they begin working with them.

“It allows us to meet the staff and gives us a good feeling for how things operate,” Prickel says. “We ask lots of questions. Whether the front desk is collecting copays, that kind of thing.”

That visit can also hold unexpected benefits for the medical practice.

“It’s not uncommon that we find something when we do the visit. In the process of going out and doing an on-site meeting we’ve actually found fraud,” Prickel relays.

More often, however, they find kind folks with a similar mission to help people and make a positive difference in the world. “Our goal isn’t to just cycle through and have a product come in and go out,” McOmber says. “It’s about having a relationship. We think of ourselves as a member of your team.”

Jones & Roth’s healthcare niche offers regular online webinars that are free of charge and open to the public. Contact us to learn more about these webinars and the other services the firm can provide.