As a private practice partner, you are a business owner, and with that comes the pros and cons of running a private practice. Many physicians enjoy the entrepreneurial aspects of running a private practice and the idea of creating ancillary income streams in practices is a fun challenge. For others however, finding ways to increase revenue in your private practice is necessary for survival, particularly as inflation, decreased reimbursement, and staffing shortages hit physician practices. Over the last year, secondary to some of these forces, we are seeing more frequent posts from physicians in our online physician communities asking about ways to address increasing overhead. The answer, of course, lies in either making more money, or implementing cost cutting measures to reduce private practice overhead. This article will focus on ways to make sure you’re not leaving money on the table, ways to develop ancillary revenue streams, ways to market more effectively to bring more patients in the door, and ways to optimize revenue cycle management.
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How to increase revenue in your private practice to increase profits or address increasing overhead
One of the benefits of being in private practice is you get to control your revenue. Not only is your income determined by the patients and payor mix you have, but it is also affected by the growth of your business. There are many things you can do to increase your revenue, including development of ancillary income streams, improving your revenue cycle management, adding additional physicians or healthcare practitioners, and bringing more patients in the door. In doing so, not only can you make your practice more efficient, but you can grow a business that can generate income that is derived not just by the clinic patient you see.
Get paid better for the work you already do
Optimize your revenue cycle management
The very first thing you need to do is ensure that you are optimizing your revenue cycle management. This is work you’re already doing, and not getting paid appropriately for it is leaving money on the table for work that has been done. There are many mistakes we see practices making, with relatively easy fixes.
Submit clean claims. Ensure that coding is accurate.
Make sure all claims and billing related correspondence are being submitted within a timely manner. Don’t fall behind on notes or messages from your staff about the need for additional documentation to the point where you’re not submitting things on time. When you’re understaffed, it can be easy for your office to fall behind on billing or ignore communication from the insurance company. However, if your claim falls out of the window it must be submitted by, you won’t get paid.
Do not be timid and undercode or underbill. As important as it is to not overcode, it’s equally important to not undercode. Many physicians on our communities report that they are afraid of audits from insurance companies saying that their billing patterns are outside of the norm. You should absolutely bill for what you did and to the appropriate level of service. As long as you have the documentation to back up your claims, you are fine.
Ensure that your billing team or billing company is staying on top of accounts receivable by aggressively chasing payments and addressing rejections. Run a periodic audit to keep track of your AR and identify problem areas where you’re not getting paid. Sometimes medical practices will choose the cheapest billers possible, and this can work against you. If the billing company is only getting 1% of claims, their incentive to spend the time and energy to get paid for a rejected claim will be different.
Your front desk and billing team must work together to ensure that all copays are collected before service, and any outstanding bills are paid before seeing patients again.
Implement best practices for correspondence and follow-ups to make sure things don’t fall through the cracks.
Enforce your insurance contracts. Sometimes the insurance companies will underpay you and you won’t even notice. Make sure your team is looking at instances where you’re being paid less than what you’re owed and addressing any patterns or irregularities with the insurance company per your contracts.
There’s more to revenue cycle management, which we’ve addressed in several events on our private practice education series. If you’re a member of our physician Facebook communities, check out the recordings!
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Renegotiate your payor contracts
This is another example of where falling into habit can really hurt you. If you have developed a niche expertise or you learn you are providing an essential service in the area that nobody else is able to provide, it’s time to think about negotiating a carve out with the insurance company. If it’s been a while since you’ve adjusted your payor contracts and you’re getting paid less than market in your contract, it’s time to call or email your contact at the insurance company and see about adjusting your fee schedule.
Add ancillary revenue streams
Depending on your practice environment and practice model, there are so many potential ways to increase revenue within your practice. Take a hard look at all the opportunities to complement the services that you offer in your practice. Some more unique options include:
Owning an ambulatory surgery center (ASC)
Sublease your unused practice space to other physicians or related businesses
Add laboratory services or contract with a company that offers these
Add imaging services
Prescription Fulfillment
Product sales
Develop your own product lines
Outsource your billing services to other private practices that don’t have their own teams
Add specialty adjacent services like a med spa, a physical therapist, a nutrition consultant, etc.
Ancillary cash pay services like ear piercings
Learn more and read more details about these revenue streams in this dedicated article about ancillary revenue streams for private practice.
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See more patients
Optimize your schedule
This is an obvious way to increase your revenue - see more patients. So many physicians are stuck in patient templates that fit one phase of their career that may not fit another. As you become more efficient with patient visits and charting, or learn more about the nuances of how to get things done, you may be able to free up space in your schedule to see more patients or add on that extra block time at the hospital. Don’t forget to keep track of inefficiencies and annoyances and adjust your template accordingly a few times a year.
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Reduce the opportunity cost of no shows
Tagging on to the previous point, if you’re seeing that no-show rates are increasing, you may want to consider adding more spots accordingly to account for the no show rate. The other lever here is to think about ways to decrease your no-show rate by implementing practice policies that discourage no-shows. Some examples include:
Sending reminders to patients about their appointments and calling, texting, or emailing to reconfirm appointments
Create a no-show policy that charges patients for no-shows if appointments aren’t canceled in a timely manner
Collecting payments ahead of time
Consider discharging patients from the practice who regularly don’t show up for appointments
Get paid for call or provide on call services to other groups
If your group isn’t getting paid for call services but provides these to local hospital systems, consider asking to get paid for call. Depending on the hospital by laws, your need for admitting privileges, or other perks of your relationship with the hospital, you may or may not have leverage to ask to be compensated for your call services. If you do get compensated but haven’t revisited compensation in a while, consider asking for more.
Additionally, if there are other groups in the area that are struggling with call coverage, we’ve seen some larger groups actually offer to help provide coverage and get compensated for this. If you’re on call anyways and this is a relatively light lift for your group, it could be a great way to create some extra revenue.
Learn more about how much physicians get paid for on call services.
Increase your patient base through effective marketing, SEO, and reputation management
Again, one of the best ways to increase revenue is to see more patients. If your schedule isn’t full, it’s time to make sure that it is. Revisit your practice marketing plan and ensure you’re not missing out on low hanging fruit or tried and true ways to increase referrals. Make a point of creating a plan to outreach to your referring clinicians regularly. Optimize your social media presence. Invest in SEO and reputation management. Address bad patient reviews effectively. Encourage your existing patients to refer their friends and family. These are all things that will pay off with dividends.
Learn more about marketing your private practice effectively.
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Utilize virtual employees to increase your bandwidth
Increasing efficiency within your practice is key to being able to do more - see more patients, bill more effectively, improve marketing efforts, improve communications with your patients, etc. These days, when private practices are often having a hard time maintaining a workforce to deliver their essential services, it can be hard to find in person help for the other things that will lead to increased revenue. Utilizing virtual employees can address these issues, bringing on someone to relieve your overworked front desk staff to call or email reminders to patients that they’re due for their next appointment, follow up on prior authorizations, follow up with billing issues, scribe your notes, get out some social media posts to market your practice, or in general help you or your staff be more productive so that your in house team can focus on patient care, which will always be the core foundation of your private practice revenue.
Learn more about using virtual assistants and tech solutions in your private practice.
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Use telemedicine where you can
Using telemedicine within your practice can be a very attractive feature for patients, and will allow you access to a broader patient base. It can also be a lower overhead way to see patients. Look for integrations within your EMR systems or third party software that allow you to implement these at a low cost and in a way where you can effectively bill for these services.
Learn more about telemedicine.
Hire more physicians or other practitioners, or add more locations
Keeping in line with increasing the number of patients you see, if your practice is ready to expand, don’t hold yourself back. If you’re in the fortunate position where your practice appointment schedule is booked out for many months from demand for appointments, it may be time to consider scaling your practice. Consider adding another location or hiring more physicians or physician extenders.
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Look at ways to make your money work for you
Most private practices are bringing in large amounts of cash on a daily basis. Is this money working for you in the background? Doing things like keeping money in a high yield account that pays a higher interest rate is prudent. Also ensure that the money you’re spending is working for you by using a credit card that provides you with good rewards such as cash back, travel perks, or perks for your business such as discounts on purchasing practice supplies or gift cards on things you as a practice spend money on. Some practices decide to invest together in practice real estate or other ventures. While you need cash on hand for emergency situations, you don’t want it sitting idle.
Learn more about high yield savings and cash accounts.
Learn more about credit cards for physicians and physician practices.
Learn more about investing in medical office buildings.
Conclusion
There are many ways to increase your private practice revenue, which focus on getting paid better for what you’re already doing, seeing more patients, adding ancillary income streams, and finding ways to make your money make more money for you. It’s important to not get stuck in inertia and examine your processes and business models a few times a year to look for areas for improvement and opportunities for growth. Technology has made it possible to find new ways to scale your practice, make it more efficient, or optimize revenue cycle management, and you should keep your eyes and ears open for these as more tools and practice models enter the market.
Additional private practice resources
Explore additional PSG resources for private practice physicians: