Looking Forward to 2024

Key Factors:

1. Deductibles and Patient Behavior: The beginning of the year often sees patients deferring non-essential dermatologic care due to freshly reset deductibles. With Medicare deductibles reaching $240 in 2024, this behavior directly impacts practice revenues. The patient’s decision-making process concerning when to seek dermatological care is not only influenced by medical necessity but also by financial considerations. Dermatology practices must anticipate this annual shift and strategize approaches to minimize the impact on revenue.
2. Balance Billing and Revenue Collection Timelines: Post-deductible balance billing can extend the revenue collection timeline by 4-8 weeks. This process requires careful management to ensure a streamlined cash flow. Understanding the delicate balance between billing promptly and maintaining positive patient relationships is essential and can be accomplished by implementing efficient billing systems that minimize delays without compromising patient satisfaction.
3. Seasonal Variations and Patient Volume Fluctuations: Factors such as inclement weather, patient travel (‘snowbirds’), and shorter workdays in February affect patient volumes. Utilizing telemedicine options can mitigate interruptions in patient care and access.
4. Insurance Delays and Fee Schedule Recalibrations: Insurers often recalibrate fee schedules and policies at the year’s start, leading to payment postponements. Billing staff should carefully monitor carrier websites so 2024 changes won’t come as a surprise and significantly delay payments. Staying informed about changes in insurance policies and fee schedules is essential.

Proactive Strategies for Revenue Management

To counter 2024 challenges, dermatology practices can implement proactive strategies for effective revenue management.

Key Strategies:

1. Point-of-Service Collections: Although a significant number of dermatology practices rely solely on insurance payments and balance billing-patients, considerations regarding collection at the time of service should be implemented. There is no question that verifying deductibles, how much of the deductible has been met, and co-pays amounts is extremely time-consuming.  Rather than collecting nothing from the patients during their visits during the first quarter of the year, consider assigning one individual to verify coverage, deductibles, and co-pays. This could be a part time college student, family member, friend, etc. After the large expenditures of the holidays, there are many people who could use the extra cash.
2. Collect at time of service. Set a standard amount to collect at the time- of service that is lower than the Medicare deductibles (e.g., $240). For example, collect $150 for all patients.  This will help the cash-flow significantly.  There are some disadvantages to this policy, however.
   • Patients may not be prepared to pay this amount.
   • Some patients may become angry if they had already met their deductibles prior to coming to your office.
   • There will be a significant number of refunds that must be made within 30 days. Running a monthly overpayment/credit balance report is essential to comply with the legal requirements. Waiting until the patient returns for care or calls to request a refund is illegal.
   • Make sure the front office staff understand the office policy and implements it consistently to all patients. This applies to the providers as well. Making exam room exceptions to your policy undermines the staff and is not fair to the patients who do adhere to your financial policies.  Also, keep in mind that “insurance only” billing in violation with the contracts you have with the commercial carriers and can also be a violation of the Federal False Claims Act.
3. Your Cash Cow. Your billing entity is perhaps the most important and critical aspect of your practice’s financial health. At a minimum, reports should be run monthly and quarterly as well as at the year-end.
   The vital aspects include:
   • Claims Processing
   • Reports Generation

• • • Gross Charges
    • Adjustments amounts and ratio
    • Net collections amount and ratio
    • Aging by carrier and patients
    • Write-off by claims and patient owed balance
    • Refund names and amounts

Practice owners absolutely must review these reports personally and understand what the reports reflect.

It’s time to look at and evaluate how your practice performed in 2023.  There are more than just CPT updates for 2024 which need to be evaluated. Running a profitable dermatology practice in 2024 will only become more challenging. This will require practice owners to take an ongoing role by consistently reviewing the data and analytics that provide the keep to financial success. Most practices have a qualified CPA, account manager, office administrator/manager, or COO, who routinely reviews these reports.  The practice owners should meet monthly with the individuals(s) who are responsible for reviewing the reports.  Most importantly the practice owner must understand the impact the reports have on the continued financial health of the practice. Active involvement in the practice’s financial reports should be a priority – you’ll be surprised at what you’ll find!

Read more from our published resources:

PROPOSED PHYSICIAN FEE SCHEDULE ADJUSTMENTS CY 2024
THE FIVE VITAL STEPS IN GETTING A MEDICAL CLAIM PAID
UNDERSTANDING THE ROLE OF MODIFIERS IN MEDICAL BILLING