Missed Charges Are Missed Opportunities
Missed charges are a common problem for most practice managers, but many assume there isn't a problem until they conduct an audit.
How do we start? The first step is to figure out why it happened, and then find a solution that best fits your practice. Here are some common spots where errors develop.
In this profession, if it is not written down or recorded, it did not occur. The invoice provides documentation of actual services rendered during the course of a veterinary visit. If a client is upset and disputes their visit, this documentation can be crucial. Think about vaccines: Failing to capture a vaccine on an invoice creates a domino effect. Aside from sowing doubt in the clients' mind that you actually gave the vaccine, their records, certificates, and the practice management reminder system are not updated. We miss an opportunity to remind them to return, and a reminder to provide the service if they do return. Poor record-keeping creates an impression of lower medical quality, as well.
Ad Hoc Estimates
Another frequent source of missed charges is treatment plan estimates. When practices rely on ad hoc estimates for more complex treatment plans (surgery/extended hospitalization), they often fail to acknowledge critical team elements that must be accounted for both financially and for client documentation. All too often, doctors fail to acknowledge the costs practices incur for nursing care, monitoring, and maintaining the treatment and surgical areas.
An appropriately documented treatment plan also promotes better understanding of the actual costs of care and a higher perception of value for clients. Just think about the difference between a surgical estimate that says, "Dental Package 1: $450.00" versus one that details everything that goes into the dental package (pre-surgical exam, anesthesia, surgical monitoring, scale and polish, dental radiology, and so on). I cannot stress this enough: Document every procedure separately on the invoice to reflect actual services performed so the client sees the value.
For many hospitals, profitability continues to be a struggle. Honest mistakes can mean a major loss of profitability. Even small errors can have an impact on the bottom line.
Say a doctor generates $1,000 of business for afternoon office appointments. If the practice is running between 5-10% profitability, they could reasonably expect to bank $50-100 after operating expenses are paid. If a lab charge is accidentally dropped from an invoice and that particular test costs the practice $76, the practice can be in the red, despite everyone's hard work.
For a surgical example: A treatment plan with missed charges may reflect only surgery time. If we pay our team to care for these patients all day and fail to account for that cost, we may have ultimately performed that procedure at a loss. We need to be paid for what we do — it is crucially important to reduce loss as much as possible.
Keep the Team Informed
The most important part of this system is educating the team about the true costs of doing business. When your team members really understand the consequences of missed charges, they will become part of the solution process, which will help improve your bottom line. They may produce creative ideas, such as posting visual aids about check-in and check-out procedure reminders throughout the practice. They are also more likely to call out other team members who are sloppy with invoicing procedures, create poor estimates, or discount excessively for clients.
Referring to a doctor, one of our team members summed it up quite well: "She needs to think about our team, too. We are dedicated, we work hard, and we want to be paid for what we do. I don't understand why she thinks that our time is not worth charging for." Bottom line: Missed charges are losses that affect the whole practice.
Should you charge the client when your team drops the ball? See "Who pays when a mistake is made?" for some thoughts.