#180 Built to Last (Part 1) - Why Growing Practices Hit a Revenue Ceiling

The difference between practices that scale and practices that stall is not clinical skill. It is operational structure. And most practices doing $250K to $500K a month have already outgrown theirs. 

In this episode, Dr. Heather Signorelli breaks down the three root causes of operational chaos that keep growing practices stuck at a revenue ceiling they cannot break through. 

You will learn: 

• Why ambiguity in roles costs you hard dollars in denied claims 
• How running your revenue cycle on memory puts your cash flow at risk every single day 
• Why unsigned charts are delaying tens of thousands in billing every month 
• Three things you can do this week to assess exactly where you stand 

This is Part 1 of 2. Part 2 delivers the exact accountability chart structure, daily checklist templates, and provider productivity metrics to fix what Part 1 diagnoses. 

📊 Free Payment Posting Audit Checklist (free, no sign-up): 

https://eligibility.natrevmd.com/payment-posting-checklist

📅 Book a free 30-min call: 

calendly.com/heather-natrevmd

Transcript

SPEAKER_00 0:04

The difference between practices that scale and practices that stall isn't going to be a clinical skill. It's actually an operational structure. And this is the single insight that separates a thousand dollars a month practice that runs smoothly from one that generates half that revenue but feels like they're always in some sort of crisis mode. Welcome to Nat RevMD, a podcast where we share tips on optimizing medical billing and improving practice efficiency so you can have the business of your dreams. I'm your host, Dr. Heather Signorelli, founder of Nat RevMD. Let's get started. So today we're going to talk about the reality of running an independent medical practice with 10 or more providers. Maybe you're hitting your targets, maybe it's $500,000 a month and net receipts, and maybe your clinical schedule is packed. But administratively, if you're constantly reacting to problems, maybe have issues with staff turnover, maybe you're spending more time retaining people than truly managing them. Maybe you've got issues with billing and denials, and maybe those are increasing, but nobody can really tell you exactly why. Then today we're going to talk through the processes that we see the most successful practices that we work with who have this down pat. And we're going to share some of those tidbits with you so that you can learn from the practices that are doing it really well and that you can implement those within your own practice. Obviously, we all know that if you are experiencing this, you're not alone. Many practices go through this stage as they do scale and as they grow. And really, it's businesses in general. This isn't probably just specific to medical practices. So it's really important that we share some of the success stories from the practices that are doing this right and that we've seen them move into the direction of change so that at the end of the day, they can scale a practice that works really well operationally and allows the owner of the practices to have the bandwidth to actually act as the CEO of the practice. So obviously, we see very different types of practices in that, you know, I'd say $150,000 to $500,000 a month range. We can have one practice that's trying to grow, but they don't have their operations locked down. Their providers are signing out charts very, very late, sometimes weeks or even months after the visit. There's a lack of accountability for the front office staff or a lack of a defined process. And when eligibility isn't checked and no one really knows until you get those denials on the back end. And then there's just this lack of clarity around roles and responsibility in general. And the practice owner ends up being the person who's running around trying to fix it all instead of delegating and trusting the system that they've built. And we've seen practice owners who are exhausted, their cash flow is unpredictable, and growth feels like this hectic stage. And we obviously see those practices leaving money in the table because they don't have those operations down pat. And again, this isn't, you know, related to bad payers, but because of just those operational gaps that are critical to capture. And then we have other practices that we work with where they're growing, they're hitting their revenue targets consistently, they're tracking their expenses, they have defined pay for their owners, not just the providers. Those physicians are signing out their charts within 48 hours. Everyone in the office knows exactly what their role is, what they're responsible for, and who's going to hold them accountable. And then the owners are actually able to then focus on the future of the business while also, of course, I'm sure seeing patients, it becomes this balance and not this hectic, chaotic everyday operations. And I will say, you know, we've had some practices for four plus years and we've seen them grow, right? So as they've gotten hired the right leaders in place, if they've gotten, you know, one process down and moved to the next process, it's it's a matter of baby steps one at a time. We all know that businesses, ours included, didn't start out, you know, with everything down pat. And so how do you do 1% better every single day, but build that into a framework where the owner or just the office manager aren't the only ones? And so you'll notice a theme the last couple of weeks where we're really focusing on this because I we see it from the practices that we work with, those that are have this nailed down or those that are working to improve this week over week versus the practices that continue to struggle. And we want to be able to provide some of those lessons learned that we've seen from our most successful practices from those who maybe are looking to build this within their own team. Obviously, the differences between these practices isn't really a clinical skill. And while we're all taught clinical skills in healthcare education, it's those operational skill sets that are so critical in order to continue to build that business. And again, you may be listening to this and go, I don't, I don't want to get that big or I don't need to get that big. You can certainly take these skills and apply them to your business and not scale, and that's perfectly fine. Or you can use these skills to make sure that you are not able to walk away or be able to sell the business one day if that's what you choose without it all being dependent on you. And so this is about a series that we've been doing where we're diving into why practices hit this ceiling when it comes to revenue and profit. How do we manage operational chaos? Why that operational chaos does cost you money. And then the systems that maybe have gotten you to $100,000 or $150,000 a month, but will break your business at that $500,000 a month mark. And so really important to lay this foundation. And so if you find what we're sharing today a little uncomfortable, we do have a checklist, an audit checklist around payment posting. We talked about that the last few weeks. It's that exact framework that we use when we're working within our new practices as well as our current practices, just to make sure that everything's handled correctly. And so check that out at the link in the show notes. All right, so let's talk about the reason number one of why we see, again, practices struggling with that growth or that scaling. And the first is uh the pain of no accountability. And it really is that first main reason that we see practices stall out. It's really around ambiguity, right? So if a person's coming to work, regardless of what level they are, do they know exactly what steps and functions that they are responsible for? We we recognize that in a small practice or even in a medium-sized practice, everyone may wear multiple hats. The front desk might be also be doing a little bit of billing follow-up and helping with credentialing. And that works when you're one or two doctors, but when you're trying to scale to five plus providers, that cross-training and policies, which we've talked about many times, becomes a liability if you don't have that down and you don't then have the accountability of who's on point versus who is a backup. And so we all know that when everyone is responsible for everything, no one is really accountable for anything, right? So, you know, if prior authorization gets missed, who do you talk to? If the front desk person thought the medical assistant was handling and the MA thought that the billing lead had it, then the results is the same, right? So the claim may get denied, practice doesn't get paid. And so the cost of not having a defined accountability chart, again, back to what are the functions in your office, what are the steps within each of those functions, and then who is actually responsible for that is going to create hard dollars that are lost to these preventable errors. And so you need an accountability chart because it forces you to define exactly who owns what outcome. Um, and then how are you going to measure for that? And it this is something that then allows you to train your people better. It allows you to really identify and focus on the processes so that you then aren't worried about them at midnight or thinking that it's not getting done, and then you're running around trying to check everybody's work. And this one shift ensures your cash flow doesn't depend on the memory or the mood of a single employee, but really back to that process. So really encourage, you know, the last couple episodes we've talked about policies and procedures and putting that into place. Once you get all of those done, or even just a few of those done, then applying those again, you can use AI for this to say, okay, here are the five staff members that I have on staff, or here are the 10 staff members. Let's then create that accountability chart so that then I know who's doing what. And again, not by name, but by role, so that then you can roll that out in your team meetings, in your huddles just to be able to check through, okay, does everybody understand the process? Is the process well defined? Okay, does everybody agree with the accountability chart? Okay, great. Um, who's on point, who's on who's the backup, and then be able to um roll that out systematically. And again, this all doesn't happen in two days. This happens over time a little bit every um, a little bit every month. And so if you're thinking, gosh, I have no policies and procedures, or maybe I have some, but I don't really know if they're accurate, you know, I always really believe in starting with the departments or the functions, then the steps and then the accountability and then the training. And then that that can kind of guide you. And again, these are just things that I've either I've either used within my hospital world or I've seen successful practices use as they roll out and improve. You know, we have a urgent care that we work with, um, doing over a million, well, close to a million dollars a month in net receipts, and just watching them um grow from 650 to over a million or close to a million, um, and the things that they put into place, the really, really big focus on eligibility, the really big focus on COB issues, you know, trying out some new softwares. You know, once they got billing, which was previously in-house off of their plate, um, and they weren't running around chasing billing errors, um, that then they were able to kind of focus on some process things together with our team to really make sure that everything was aligned. And now they're able to scale. They're seeing more patients, they're fixing some credentialing, contracting issues. I mean, it's just one thing after another. And so I think it my son was telling me about the the YouTuber, um, oh, Mr. Beast, Mr. Beast, and how Mr. Beast has been doing videos for YouTube since he was like, I don't know, 12 or something, absurdly young. My son is 13. And he was talking about how he got to where he is now. And the saying was 1% better, you know, every single day or every video. And so you may be looking at your practice, and I don't want you to be frustrated or worried about where it should be. Instead, go, okay, where is it today? And how do I get it 1% better this week and 1% better next week? What is that list of things that I need to do? And I do think that this takes time for you. You have to take the time as the CEO to go and sit and plan and think, what are those things? Most owners and even practice managers or COOs, whoever's running the practice, you inherently know the things that keep getting stuck. And we'll talk about a lot of these concepts over the next couple of weeks as we kind of dive into these operational processes that I'm seeing practices get stuck with and that can really help improve operations. And so really important to again take the time, carve out that afternoon, even if it's on a weekend because you're seeing patients five days a week right now, um, you know, take a pen and a paper and go sit down and, you know, have a cup of coffee, whether you're morning person, night person, find that time to go, okay, let's really sit down and think through where we're at today and where we're getting stuck. Um, we'll talk a little bit about that at the end of this episode around some things you can do. So the other thing we're seeing with practices as they scale is this hidden cost of the credentialing lag. So we see practices hit a wall and failing to manage this credentialing lag. And so when you hire a new physician, new provider, how long does it take before they're actually generating cash for the practice? And most practices we work with, honest answer is either they don't know or it takes too long because they're starting credentialing when they start work versus prior to them when you write an offer, you know, trying to get that credentialing started 90 to 100 days before they actually step up, step foot into the practice. And you have to be careful with this because I know that depending on the provider type, you can try and build them underneath, you know, another physician, but you have to really be careful of incident two guidelines and being able to do that, and especially if it's physician-to-physician, um, there's a lot of rules around that and that may not be quite allowed. And so um, you really want to make sure that you're getting credentialing started as soon as possible. And obviously with your scaling, right, you're adding physicians, you're adding providers. And so that credentialing process um can take, you know, 90, 120 days. And so if that person is seeing patients before they're fully credentialed, um, and maybe those visits are billed under another MPI, it does create some compliance risks, or maybe those are held in limbo, waiting for uh credentialing to go through and then trying to do retroactive, which works with some payers, but not with all. And so you again have that cash flow gap where they're seeing patients, you're paying them, but you may not be getting paid, or you may be hoping to get paid later. And so we see practices where a new physician then may be seeing 20 patients a day, but maybe those claims aren't being billed out for a couple of months, or they're being billed underneath somebody else, and you're just hoping that, you know, that's allowed. Really, I think really understanding the timeline of I'm gonna hire somebody, I'm gonna get credentialing started ASAP, and then I'm going to make sure that we have a wait list or that we're starting to build their patient schedule before they start so that I'm not me as in the owner of the practice, is not covering their overhead, their salary, or funding all the stuff that they need in order to be at the practice. Obviously, there may be some of that ramp up time and you want to build that into your ROI when you're hiring a physician or a provider, but really, really just want to make sure that this credentialing lag is addressed is, you know, obviously there are situations where you're hiring somebody, you need to get somebody on ASAP because you've got patient or you've maybe had somebody quit. And so there's a lag there. Obviously, there's always gonna be things that you can't control, but if you can, try and try and get that done as soon as possible. All right. So the third thing that we see practices struggling with as they're trying to scale is this compliance cash flow chart closure. So the other thing that we so the other thing that we see, the last thing that we we're gonna talk about today that we see as practices are scaling is maybe that CEO owner or you know, physician owner is seeing patients. They're seeing patients five days a week. They're trying to behave as a CEO of their practice, but then now they're running behind on signing out their own charts. And there's uh an inability or a lack in process around chart closure, whether that's for multiple providers or just the owner provider. This is one of the most painful practices or painful reasons why practices struggle is the failure to enforce chart closure policies. And obviously, a claim cannot be submitted until the documentation is completely signed off. People are patients are being seen all week, but then we're not getting charts until weeks, months later. Not only is there then an AR issue because you have all of these claims that are waiting to be submitted, but then there could be potentially a timely filing issue. Um, but then the hidden reason that we really see practices struggle with this is that there are eligibility issues, right? So if the eligibility process in the front desk isn't um isn't nailed down, then you see these patients who have eligibility problems, but then you don't submit their claims for three months or longer, then we're stuck with an issue where now we've got eligibility denials, but we have a shorter time frame to manage those because of the timely filing limits. And those patients have been seen now months later. And so getting their corrected insurance becomes a harder challenge. And typically we see practices where there is a chart closure issue, we're seeing eligibility issues. Those tend to go hand in hand because again, it comes back down to accountability. Who's holding the providers and the physicians accountable for signing out the charts are oftentimes the same lack of process when it comes to holding the front desk accountable. And I certainly see everybody's working super hard. The physicians are typically working really hard. It's not that they aren't working and trying to do everything that they can. It's oftentimes just it's the process of, okay, I have to get these charts signed out. And I have things like getting a scribe to be in the room or a virtual scribe, even. Um, I know there's some AI scribes that are out there. I'm not, I have, don't have experience with those, but a human, live human scribe, even a virtual one, can be on and typing while you talk so that you get back into your notes at the end of the day and those are all cleaned up and you just make sure that the codes are correct. Um, a lot of times with ECW, with ModMed, with some of these other softwares, they're already able to put in some information with regards to the codes. And so that information is in there. So you can get quicker at this. Again, I really believe that this comes down to an accountability process. You set the expectation and that everybody has to adhere to that because oftentimes if one physician or provider is struggling with chart closures, there then becomes a culture that it's okay to have delay in sign out. And then that just kind of snowballs from there. So obviously, you know, practice doing, you know, $200,000 a month in net receipts could lose, you know, 10 to 15% because of those unsigned chart closures that are just taking months and months. So obviously that is a huge impact to the practice, the financial stability, um, and also to the owner's paycheck as well. So, or the physician's paycheck, um, depending on how you um pay your physicians. So obviously, this isn't just about cash flow, it's also about compliance. You know, you want to make sure that, you know, that you document complex patient visits when they happen because weeks later that you may not remember all of the things that happened in that visit. So obviously, best practice here is strict 24 to 48 hour chart closure policy. That's gonna practice or that's gonna protect your revenue, that's gonna protect your compliance. Um, and again, it comes back down to this accountability loop. All right. So to summarize, today we're talking about those three reasons that help growing practices get out of the pain of operational chaos. So the first is really around a defined accountability chart, cost cross-training backups, really that lack of ownership, which can lead to dropping ball. And that could be whether that's in your front desks or your clinical team or your billing team. The other thing is really relying on staff memory instead of these documented daily checklists, which are really, really important for you to have. And again, we talked about a little bit of this last week. We talked about today the credentialing lag. So really making sure if you're gonna hire somebody and you've got that person teed up the moment you sign that contract and you guys define, okay, yes, this person's gonna join us, start that credentialing that day. Like not tomorrow, that day. The other thing is just really delayed documentation and chart sign out. Really, really critical for cash flow. And that's the difference between what we see are really successful practices and those that continue to struggle. Um, and again, I think all of these things connect. And so you need to really be honest with yourself of, okay, why can't I get, you know, this accountability chart or these policies and procedures? If it's time, then the even if it's uh a little bit lower revenue for a half day of a week because you're you're carving out the CEO time to do this, I I recommend doing it because as you get bigger and if that's what you're trying to do, you're gonna struggle at defining these as you scale. And so take the time now to do that. Again, even if that means shutting down the office for a half day and maybe that's once a week, maybe that's once a month, depending on where you're at, and really sit down and go through this and have it dedicated time, no notifications on your phone, no phone calls, turn it all out, you know. Heck, close the windows, just sit in the dark with a light on, no distractions, whatever you can do. So obviously, what you can do this week is really sit down and give the attention that this needs. So I'm asking, you know, do that today, do that tonight, because we're gonna talk in part two of this series, you know, the next group of things that are really gonna help practice who are looking to scale and be successful because the operational chaos is stressful for everybody. It's probably stressful for your staff and they're just not even talking about it. So, really, really important. So, I want to ask the question that you can think through is who owns what? So I want you to pick three critical tasks in your office that are really, really important. And do you have a process and policy defined? And do you have somebody who is truly accountable? So that can be prior authorizations, that could be denial follow-up, that could be checking a patient in, that could be bring rooming a patient, eligibility checks. I mean, I could go on and on, but just pick three. Pick three that maybe are feel like sticky in your office or not not working very well, and then ask your team who owns the final outcome of each of these. And if you get different answers from different people, you definitely have an accountability problem and it's costing you money. So then the other test you can do is what's called the resignation test, right? So identify one person whose sudden absence, right? They did you woke up and they did not come to work today. Who, what would that disruption be? Who would cause the most operational disruption and start with that person, start documenting their daily tasks. And um, you know, not because you think that they're leaving, of course, but because the risk exists, whether you plan for it or not. And we went through a similar exercise within our own team of like, who knows what industrial knowledge with our accounts that isn't documented. And we need to make sure it's all documented because no matter who leaves or what happens, we need to have a source of truth that people can fall back to. And then last is run an un unsigned uh chart report, right? So pull it right now and see how many encounters are older than 48 hours and who um who is the number one person slowing down chart signatures. Maybe it's you, maybe it's somebody else, but it's gonna tell you how much revenue is stuck in the pipeline and The potential risks of again those denials, not only for timely filing, but then for eligibility. And then they result in no payment denials because we can't get the eligibility fixed, because it's been months since the patient was seen, or compliance issues because you're not documenting or you're forgetting the details behind a specific patient episode or issue that you that you were with. So obviously, um, if I've made you uncomfortable, uh, that is the intent here of trying to grow and allow practices to push themselves to be exactly what they deserve and can be. So grab our free payment posting audit checklist. It is the exact framework that we've used to audit new practices and even our current practices. And so it is free, it is quick. Head on over to the show link below. Notes. Head on over to the link below. All right, thanks so much for listening. We'll talk to you next time.