By Stacy Calvaruso
Many factors contribute to the ultimate success or failure of an urgent care center. Some are beyond your control, but there are others on which you can exert a good deal of influence — with the right approach.
Two such factors that have an enormous impact on the success or failure of an urgent care center are payor mix (the combination of entities that pay for the services) and patient mix (the clinical diversity of the patients for whom the urgent care center provides care).
The way an urgent care center controls those two factors can affect its ability to prosper, or even stay afloat.
Payor mix refers to the diversity of entities that ultimately foot the bill for a patient visit; this includes patients who pay out-of-pocket and private-sector insurers such as managed care plans, as well as Medicare and Medicaid. It is important to recognize that each payor generates a specific income, which you can identify in order to learn which payors generate the highest proportionate revenue. You can also determine payors’ payment speed, efficiency, and desirability by identifying components of each payor’s revenue cycle: time lag between billing and payment and the percentage of paid charges.
You can increase profits by tracking and using this information to adjust the payors with whom you contract and the proportion of patients you accept from each payor category (i.e., self-pay, managed care, Medicare/Medicaid).
Assigning different factors to patients’ accounts will help you determine your patient mix and to view patients across various parameters.
One of the most common methods is to utilize your accounts receivable aging (A/R aging) reports.
In addition, you will want to review your payor mix based on ICD-9 and CPT categories. It is simple to attach categorizing data to each patient in computerized billing programs; this will enable you to run reports that show the most profitable patient types for your practice.
Understanding both factors — patient type and payor mix — can help you better identify the most profitable providers and patient types.
Many practice management software systems are designed to generate reports that can be helpful in this regard. Typically, accurate, relevant reports can be formulated by specifying the data you want associated with each account (e.g., financial class, payor name, age of patient), entering the data on each patient uniformly, and updating all data at appropriate times.
You can connect your patients’ account profiles with data from invoices (i.e., issuance and the due and payment dates) and clinical records, such as the referring medical diagnosis — your diagnosis and ICD-9 codes from each visit — and CPT codes.
You can also use HCPC codes for combining CPT, ICD-9 codes, and supplies such as walking boots, cervical collars, etc.
Analyzing the Data
A good time to perform a payor/patient mix analysis is about three to four months prior to renewing contracts with private insurers.
Choosing the payors with whom you want to do business is one method of controlling your payor mix. However, you should keep in mind that any observed differences in revenue may be attributable to changes in patient mix, as well. Analyzing both patient and payor mix regularly will help identify reasons for revenue fluctuations. It’s also important to remember that the effect of any one common variable will be lessened with higher patient numbers.
Patient mix effects can be analyzed with or without regard to payor mix. For instance, a report that identifies your annual top revenue-producing services might list CPT codes from billings by their revenue totals. If you have diagnosis information in your patient records, you can determine the diagnosis of patients for whom you provide these top-producing CPT codes.That information can also be connected to payor data and other information.
How is this relevant? Well, you may discover that your practice generates the highest revenue under CPT code 99213 from patients diagnosed with diabetes who have no primary care provider listed. You may then choose to intensify marketing efforts to attract patients with those characteristics; that might include purchasing ads or placing brochures where targeted patients will see them.
You could also make yourself more accessible to your target group by networking with other clinicians in your area and establishing mutual referral agreements.
Conversely, you may decide to stop marketing to and accepting potential patients in your lowest revenue-producing categories—if your contracts permit you to do so.
With careful set-up of accounting systems, routine monitoring, and analysis, you can keep your practice on track financially.