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Chiropractic services are all about promoting alignment. Running a successful chiropractic office requires maintaining proper financial alignment. Chiropractic offices today face numerous challenges, such as patient retention, administrative overload, outdated systems, and staffing matters. Each of these challenges can impact the office’s financial sustainability and profitability, and all of them can be improved or worsened based on how well that office manages its money.
Financial mistakes, therefore, can be detrimental to virtually every aspect of a chiropractic office’s operations. By identifying, rectifying, and avoiding three of the most common chiropractic financial mistakes alone, you can go a long way toward keeping your chiropractic office on track to success.
1. Improper Billing and Coding
To comply with regulations and get properly reimbursed for your time and work, you must conform to intricate insurance billing and coding systems. Failure to submit claims properly can lead to costly consequences, including denied claims, lost revenue, and possible compliance violations.
Common billing and coding errors include:
- Improper use of CPT codes - Failure to use correct coding to convey what services and procedures you provided
- Incorrect use of modifiers - Inaccurate use of the two-digit codes appended to the CPT codes to give extra information about what services you provided
- Wrong documentation - Such as records lacking details or adequate patient history or containing discrepancies
- Lack of coverage verification - Failure to do your due diligence to account for variations in insurance coverage
- Disregarding denials and appeals - Letting denied claims go unaddressed and failing to appeal them
- Inaccurate patient information - Entering incorrect patient data such as the wrong demographic information, missing key information or ignoring typos
- Failure to consistently follow up - Failing to check on claim status or delaying such follow-up, not communicating with insurance agencies about unresolved issues and inconsistently tracking outstanding claims
- Ignoring policies and guideline updates - Overlooking changes to coding regulations and payer policies, using outdated codes and failing to comply with new guidelines
Any of these errors can raise a red flag to insurance companies, leading to lost reimbursements due to claim denials, triggering lengthy and involved investigations, and even prompting inquiries into possible fraud.
One key cause of these errors is improper or insufficient staff training in billing and coding. Properly and fully training those members of your staff who are responsible for these matters demands consistently educating them about the latest changes and updates to billing and coding regulations.
2. Accounting Errors
Accounting missteps can severely impact your chiropractic office’s cash flow. One common mistake is combining business and personal finances. To avoid the problems that come when you blur the lines between these two, set up separate bank accounts for your business and personal finances to improve accuracy in reporting, simplify bookkeeping and tax preparation, and facilitate compliance with IRS regulations.
Faulty record-keeping is another common accounting error. Its problems range from impaired cash flow to legal complications. To plug these holes, implement a system for keeping diligent records. This can help you avoid underbilling or overspending and make more informed choices about adjustments, expansions, and investments.
Inadequate tax planning can lead to exorbitant fines and financial setbacks. Protect yourself from these dangers by integrating strategic tax planning into your overall financial strategy. This can help you to anticipate liabilities, leverage credits and deductions, and avoid the dangers of overpayments and underpayments.
Ignoring cash flow can create critical situations for your office. By monitoring cash flow vigilantly, you can balance inflows and outflows, reliably cover operating expenses, invest in expansion and growth, anticipate possible challenges and mitigate them before they turn into emergencies, and save for the future. Other ways to help manage cash flow effectively include invoicing in a timely matter, implementing efficient collections procedures, and prudently managing expenses.
Some of the other most common accounting inaccuracies and inadequacies include:
- Failure to consistently and accurately track key performance indicators (KPIs)
- Overspending on office space and equipment
- Overlooking the need for a suitable emergency fund
- Lack of regular financial check-ups
- Ignoring matters of compliance
3. Poor IT Management
Technology is an integral part of every business nowadays, and chiropractic offices are no exception. Using the right technology for your needs and using it correctly can significantly support office productivity and efficiency. How you manage information technology in your office can dramatically impact your financial bottom line.
Cybersecurity matters play a pivotal role in proper IT management. A security breach that results in the unauthorized release of patient information can destroy a chiropractic office’s reputation and potentially embroil it in potentially bankrupting lawsuits and settlements for damages. That’s why investing in the airtight security of your financial and patient data is paramount in preventing irredeemable losses.
Many chiropractic offices, for example, still utilize outdated, server-based software to manage their operations rather than more comprehensive cloud-based software. This one oversight can negatively impact an office in many areas.
Data Accessibility
Failure to access patient data whenever you need it can limit operational flexibility and efficiency. Today’s cloud-based IT allows you to manage these matters from anywhere you can access the Internet. Modern cybersecurity tools can ensure that this access is protected from hackers, malware, corruption, and loss.
Storage Backups and Security
Consistent backups can prevent detrimental data loss from pervasive threats like theft, failure, and natural disasters. Proper data encryption can help to ensure that your vital, private data is more challenging to steal and that, if outside forces access it, it’s harder to read and interpret.
Economy and Scalability
The needs of a growing chiropractic office in an ever-shifting marketplace and economy are constantly changing. Staying on top of these constant changes requires significant adaptability in operational functions. The right technology can make recurring tasks like adding and removing users and upgrading features more cost-effective. It can also expand or contract in line with your business’s trajectory to keep pace with the resulting changes in your office’s needs. This can protect your limited budget from unnecessary expenditures and support a steadier cash flow.
Claims and Billing Efficiency
Filing insurance claims correctly and promptly can be time-consuming and prone to mistakes. Many errors occur when an office depends on out-of-date systems or manual procedures. The right IT can streamline these duties and ensure accuracy with features that automate much of the billing and coding processes.
Appointment Scheduling
Scheduling appointments can take up a large portion of your staff’s time and attention. Relying solely on human resources to manage scheduling can lead to conflicts, gaps, and no-shows. The right software systems can avoid and reduce these potential problems.
Patient Communication
Fostering strong relationships with your patients and giving them quality care requires good communication. Tools like encrypted VOIP can help you send messages securely. Using cloud-based patient portals and automating recall reminders can also ensure prompt and consistent patient communications.
Implementing modern IT tools and resources can help your office streamline operations and avoid potentially severe repercussions. For example, using improper or insufficient IT or failing to maintain and upgrade it adequately can result in unexpected downtime. According to one report, unscheduled downtime can cost your office as much as one-third more in lost revenues than planned downtime. It is, therefore, also imperative to train your staff adequately to operate and maintain these technology tools.
Failure to embrace IT advancements can restrict patient communications, impede workflow, and limit general productivity. By contrast, an investment in good IT is an investment in business security and operational efficiency. Your office’s use of technology can either streamline or complicate operations and enhance or diminish the patient experience.
In Conclusion
Financial mistakes can keep your business from running smoothly and cause considerable stress. These three common examples are far from the only financial errors that can harm your business. However, avoiding them alone can go a long way toward ensuring that your chiropractic office has the most excellent chances of thriving. To explore integral measures for avoiding these common chiropractic financial mistakes in your office, reach out to those with the resources and expertise to help, be that an accountant or an IT provider of critical tools like cloud phone system.
