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 By Neil B. Gailmard, OD, MBA, FAAO, Editor May 16, 2012 - Tip #533 
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Office Errors Can Reduce Your Net

  Sponsor: AIR OPTIX® AQUA Multifocal

Continuing in our series covering the five methods to increase your practice net income, let's focus on the fourth item on our list: reducing administrative errors. Here is the complete list we are working on:

  1. See more patients per day.
  2. "Sell" more to each patient.
  3. Raise fees (or reduce discounts).
  4. Avoid costly errors.
  5. Reduce expenses.

Errors in the broad sense
I refer to administrative errors as a catch-all category for anything that doctors and staff may do that costs the practice money. I'll provide some examples and some tips for preventing these oversights and omissions, but in the broad sense this category could include any office inefficiency.

Fees that are not posted or collected
One would think that forgetting to charge and collect fees would be a rare occurrence in any business, but it is actually fairly common in optometric practice. Part of the problem stems from office management software programs that are slow and burdensome on the staff. In an effort to check patients out quickly, many offices do not post charges to the patient account while the patient is in the office. Many staff members are just too busy to handle that task at the moment the patient appears at the front desk after spending well over an hour in the office. The patient wants to go and the staff member writes up a paper receipt of some kind, accepts some form of payment from the patient and places the record to the side to come back to and finish later.

With the charges placed on hold and the patient gone, any number of problems can occur that will prevent the charges from ever being entered into the management system. One example might be that another employee cleans up the front desk and files the record away. The danger is that when eyeglasses or contact lenses are dispensed, most office staff members simply look at a patient's record to see if there is a balance. If a balance exists, the staff member collects it. If the balance is zero, the staff member sends the patient on his way and says "Have a nice day!" Of course, if charges are never entered, the balance will be zero!

There are many other scenarios for not entering charges. Contact lens orders placed over the phone is a common one. If an order form is generated, but no charges are entered, the contacts can easily be dispensed and never charged.

We should also mention that optometrists often provide services and procedures at no charge. This might be a free OCT test or retinal photos or a refraction fee that is waived. I do not understand this. I do not believe this gesture results in much patient goodwill. The patient just assumes those tests had little or no value. If the doctor had charged for the tests, the patient or the insurance plan would pay it.

Monthly procedures not followed
Many offices do not get around to sending billing statements in a timely manner to patients. Likewise, these offices may not review payments and claim rejections from insurance plans on a regular basis. No one is really monitoring the accounts receivable aging report. It is imperative that a staff member be assigned with sufficient time dedicated to manage billings and collections for insurance and for patients. Rejected claims can be corrected and re-filed. Balances can be transferred from insurance plans to patients (in some cases). Patients who are past due on payments can be called. Time is of the essence. If these issues are not handled quickly, the chance of successful collection drops dramatically.

Another monthly procedure is patient recall. No matter what system you use, if you omit recall efforts or have an inefficient recall system, you will pay a big price. There is a cost to that.

Theft and embezzlement
While not technically an error, I place employee theft in this category because it is a management oversight if it is allowed to happen on a large scale. I've heard far too many stories told to me by colleagues about employees who steal cash, write fraudulent checks, and take frames, sunglasses or contact lenses for their own use or for friends. I'm sure this has happened in many offices, mine included. We may never be able to completely prevent theft, but using strict accounting procedures and maintaining a close watch on inventory can greatly reduce the problem.

Be sure you have a system in place that requires financial accuracy. The daily production report must always balance exactly with the cash drawer at the end of the day. Have two working cash trays with a predetermined amount of cash to start the day so the other cash drawer always stays with that day's production report until it is balanced. Any over or under cash amounts must be explained. Bank deposits should always match the day's receipts exactly in the form of cash, checks and credit card payments. Bank deposit receipts are returned to the owner and monitored.

There are many ways that a practice can be inefficient and to some extent, those are management errors. One common example is insufficient delegation. Another would be a practice that does not encourage patients to buy annual supplies of contact lenses. Selling annual supplies reduces the transaction cost of having your staff place multiple orders throughout the year. Shipping lenses directly to the patient also reduces transaction cost.

None of us are perfect, but if you review your office procedures and design them to reduce errors and omissions, your practice net income will increase.

Best wishes for continued success,

Read Past Tips Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week

A Proud Supporter of

Send questions and comments to neil@gailmard.com.

Dr. Gailmard offers consulting services to eye care professionals through Prima Eye Group; information is available at www.primaeyegroup.com.

Please Note: The views expressed in Management Tip of the Week do not necessarily reflect those of the sponsor.

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