Like other ODs who own their practice, I get really busy sometimes. Even though I pride myself on delegating many tasks to an excellent staff, I still like to know what is going on in all aspects of the practice. Time gets away from me and some things are overlooked for a while, but eventually I like to circle back and review key elements of our operations. Here is a good overview for you to check on five fundamental factors in your practice.
You should be running monthly reports on money that is owed to your practice from two major entities: patients and insurance companies. It is helpful to actually print these reports so you can review them with key staff members and write directly on the pages as you outline your plan. If you do not have an accurate list of accounts receivable that shows the age of the balances due, you should work with your office management software provider to learn how to obtain it (or speak to your accountant).
The key sections to look at are the accounts that are more than 30 days old. Investigate the claims with insurance companies that are older and also the balances owed by patients. If you have not kept up to date with these past due balances, your staff will need to make phone calls and send letters to find out why the balance was not paid and when you can expect to receive payment. This is not an easy job, but there is a lot of money at stake.
As account balances get older, it is less likely that you will ever collect them. It is necessary to write-off some unpaid balances once they are very old, say more than 120 days past due. If your staff reviews the AR reports monthly in the future, many write-offs can be prevented.
Insurance billing is a department in the office that the OD/owner does not often pay attention to. It is a vital area that you should review. It is very smart for the practice owner to understand the basic process of how claims are generated and filed. Ask yourself if your insurance coordinator were to resign tomorrow, would you know how to train another employee on what to do (or at least get them started)?
Be sure to review both parts of the eye care insurance world: vision plans and medical insurance. They are quite different. Find out if your staff is up to date with claims or if they are way behind from the date of service. For vision plans, who submits claims that include an eyeglass order? Who submits exams only and contact lens orders? For medical plans, what happens when claims are rejected? Are amounts that go toward a deductible transferred back to the patient and billed? Are those balances eventually paid in most cases? For all insurance, who on your staff enters the payments and adjusts off the balances? Review those write-offs and see if there is a way to overcome some of it.
Fee and price lists
Your practice functions with many price lists. Revisit them with your staff and ask how long it has been since they were updated? Here is a list of prices:
Medical procedure fees
Contact lens fitting and evaluation fees
Contact lens products (per box and per years supply)
Frame mark-up formula
Base ophthalmic lenses
Lens enhancement features (add-ons)
Write down your actual wholesale cost for products and see if the profit margin is what you think it is. Is it time to raise some professional fees?
Patient satisfaction is vitally important for continued practice success. We depend on happy patients referring others based on the wonderful experience they had in our offices.
Telephone. Make sure phones are answered promptly and there should be very little use of voice mail. I dislike menus that delay the call and end up going to voice mail. The phone is so important; just answer it!
Office hours. Many ODs don’t really separate the practice from themselves personally. Convenience is part of excellent customer service, so try to expand your hours and be open when it is convenient for the patient.
Check-in and check-out process. Take a close look at the forms you are asking patients to fill out and try to minimize them. Make check-in and check-out fast and easy.
Waiting times. Develop an office culture that tries hard to be on time. Have your tech call the patients in quicker. Have the doctor be more flexible and be more aware, to minimize internal wait times.
Run a simple frame inventory count so you can see how many frames you have in various retail price points as follows:
$150 to $200
$200 to $250
$250 to $300
$300 to $400
$400 to $600
Add up the total number of frames in all categories and calculate the number in each price point as a percentage of the total. Are there some price points that have very few units? Do you have the proper distribution of prices based on your practice demographics and your market philosophy? Are there good style choices in each price point? Is there some understock and is the total number of frames on hand the correct number?
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week
Dr. Gailmard's new book, Practice Management in Optometry: A Blueprint for Success Based on the Optometric Management Tip of the Week, is now available on Amazon.