Are You Giving Away Your Profits?

Are adjustments taking over your practice? Before you can answer this, make sure you’re clear on what an adjustment really is.

·      An adjustment is anything you’re writing off of a patient’s account.

·      Example: If a patient comes in and you’re in-network with their insurance, that contract may require you to reduce your fee.

·      When you reflect that reduced fee on the ledger, that’s an adjustment.

My suggestion:

Have a benchmark for your adjustments not to include your insurance adjustments.

The reason I recommend that you monitor those separately is because:

1.    Your insurance adjustments are something that you need to be aware of.

2.    It’s important that you know what percentage of your overall production you are adjusting based on that insurance agreement that you really don’t have control over.

Stick With Your Benchmark!

At the end of every month:

·      Total up the items on the patient’s account that are not insurance related.

·      Look at what percentage those adjustments are of your total production for the month.

·      The benchmark is 3% or less.

You may be surprised when you look at your adjustments at how high they are or you may look at them and find that you’re really doing pretty well. If you’re not monitoring and measuring them every single month, you’re really leaving your adjustments and your practice to chance.

Small adjustments can add up to BIG totals over time if you’re not monitoring them carefully.