164 What if Reimbursement Disappears

Welcome to the KC CHIROpulse Podcast.  

This week’s topic: What if Chiropractic Reimbursement Disappears. 

The KC CHIROpulse Podcast is designed for Chiropractic professionals ready to elevate their practice to new heights, is hosted by Kats Consultants CEO Dr Michael Perusich and COO Marisa Mateja, both seasoned experts in Chiropractic care and business development.  This podcast provides invaluable insights and actionable strategies to help you create a flourishing and sustainable Chiropractic business.

In this episode, we discuss:

• The hypothetical situation when reimbursement disappears
• How dependent is your practice on insurance reimbursement
• What would your practice look like if reimbursement was suddenly cut
• How can you flip the dependency on insurance into more cash services
• Why cash practices are more profitable
• …and so much more…

In each episode of KC CHIROpulse, we delve into crucial aspects of building a successful Chiropractic practice, covering topics such as establishing a strong foundation, adopting a patient-centric approach, mastering marketing techniques, achieving financial fitness, fostering effective team building and leadership, integrating technology and innovation, and navigating common challenges in the field.

Whether you're a seasoned chiropractor or just starting your practice, the KC CHIROpulse Podcast offers a wealth of knowledge and practical advice to help you navigate the intricate world of Chiropractic business. Join us on this journey as we explore proven strategies, share success stories, and connect with industry experts to empower you in your pursuit of building a thriving Chiropractic practice.

Don't miss out on the latest insights and expert guidance. Subscribe now and unlock the secrets to taking your Chiropractic practice to the next level. Your success is our priority at Kats Chiropractic Business Advisors.

DISCLAIMER:  The information presented in this broadcast is for educational purposes only and is not intended to offer legal, investment, accounting, or medical advice.  Seek the consultation of a professional for advice in those areas. And remember…your results using this information may be different than described.

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Transcript

Dr. Michael Perusich: 0:00

Chiropractors, how stable is your reimbursement? Hi, everybody. Welcome to the KC ChiroPulse podcast brought to you by ChiroHealth USA and Kats Consultants. Welcome everybody to the show. I'm Dr. Michael Perusich. I'm joined by Marisa Mateja. We're your hosts today. And Marisa, I want to talk about this. This idea that you and I banter back and forth sometimes what happens, you know, and this is just hypothetical I don't have a reason to believe this really but It's just an interesting conversation. What happens if reimbursement just dries up and goes away. It's a great question, right? I mean, you're right. We do banter this a lot. We banter back and forth with the idea of Reimbursements always declining, right? So what happens if it does go away, you know, and so it's a great topic and I'm sure there's a lot of docs out there going, because you know, it really goes down to looking at your practice and saying, are you a good balanced practice? And what I mean by that is your insurance versus your cash. Are you balanced on that? Because that's what it really comes down to. If insurance goes away. Where does your money come from? Yeah. So let's dive into that just a little bit. So inherently, I think we all know there's a difference between getting reimbursement, reimbursed by the insurance company and getting reimbursed by your patients fee for service, cash based services. And when we look at the two, so you look at cash reimbursement, you look at insurance reimbursement. The two are diverging away from each other. So insurance reimbursement is having a tendency to keep going down and. The ironic thing is cash reimbursement on the cash side is actually kind of ticking up a little bit, at least from what we see, you know, I can't say that's necessarily across the board in the profession, but what we see with our clients, it's actually going up. And so that creates an interesting conundrum between the two, if you're heavy, heavy insurance reimbursement dependent. You don't have a lot of control there, right? Because, I mean, we can set our fees all day long, but the insurance company is only going to reimburse us what they want to reimburse us, and the rest just is a, is a write off. As opposed to the cash side, on the cash side, we create kind of this, so in investment banking, we called it a safe haven. We, you create kind of this safe haven over there where you do have control over your fees. you can show value to patients and you have control over where you set your fees and how much you're paid for your services and as that goes up and the insurance reimbursement goes down. What happens in the middle is risk. And so if you're heavy insurance, your zone of risk, if you will, is going up as reimbursement goes down, the zone of risk is going up to your practice. and it also creates, a value marker for your practice. It's worth, right? So what your practice is worth, depending on if you're heavy insurance, you're actually worth less in the marketplace. And there's a whole bunch of factors you have to look at there that, you know, for that balance, that's why I said you almost need a good balance of the two, especially if you're going to keep accepting insurance and things so that you've got, that you've got good reimbursement coming in. But if we go back to that risk side of everything, the insurance side is, it's risky. It's very risky and part of that risk is if you're going to be heavy insurance space, then you, you've got to have volume. And so now you're under the gun to bring in more and more new patients all the time. And if you're not careful with that, you create not only a capacity issue, but you start bouncing off the capacity ceiling and you actually keep knocking your practice down. And so then as we see dropouts. Go up, then we want to shove more new patient. So it's the old chiropractic management model. It's more new patients, more new patients, more new patients. And at some point that kind of breaks the practice down too. Because what do we do to keep more new patients coming in? We keep lowering the price, lowering the price and lowering the price. So Dr Fox just said this the other day as we devalue our services. We wind up thinking that working harder is going to save the practice. So we're starting to see more and more new patients, which I mean, come on, everybody, you have to agree with this. New patients are the hardest ones to see. Absolutely. And as you lower your price now it's three, four or five visits before they're profitable. And if they drop out, then you lost money. And so as you devalue yourself and, and you get the mentality that. I'll work harder to bring the practice up and we think that patients are going to notice that we're working harder and find, more value in it. Actually, I think the opposite is true. This is what Troy talks about. The opposite is true because what really happens is as you devalue the patients, devalue your service. Yeah. So you throw yourself in this trap and like that's part of that risk zone that you get into. Yeah. And, and then there's another risk zone, obviously with insurance, it's the audit side of everything. So the more you bill, the more you're on a radar screen, whether you're doing things correctly or not, you know, so I want to put that out there. You're, you're on that, no matter what, if you're billing a ton to insurance. I want to dive into that really, really deep. We need to throw a word from our sponsors in here real quick, but we're talking about what happens if. And again, this is just rhetorical. If insurance reimbursement just goes away, just dries up and goes away, what happens to your practice? How stable is your practice without it? So we'll, we're going to dive into this a little deeper and talk about some of the other risks associated, including, audits, everybody's favorite topic. So we'll be right back.

6:16

So we all feel it. Rent, or dining out, gasoline, or movies. As a matter of fact, the dollar is not going as far for a whole host of reasons. And it's impacting everybody, regardless of your financial situation. Did you know that 38 percent of the overall population is having to reconsider how they're spending their money just to afford the healthcare they need? And if you break it down further, 26 percent have actually delayed the healthcare that they need. Including going to see you, the chiropractor. So here's what we need to know about the breakdown in demographics. You would think that someone who's making 120, 000 or more would be continuing their care right now. But the actual number is 18%. 18 percent of that group is actually putting off health care. And that's a group of people making six figures. When you take that same information all the way down to a group making 40, 000. That number is much higher. It's closer to 40%. So it's never been more important than now to make sure you've made it easy for your patients to come see you, that you have choices for them, and you understand what they're going through at home. We want to make sure your practice thrives during this time, and we encourage you to learn about what ChiroHealth USA can do for you and your practice, and making it easy for patients to see you and continue care.

Dr. Michael Perusich: 7:45

All right everybody. Welcome back to the KC ChiroPulse podcast brought to you by ChiroHealth USA and KATS Consultants. Marisa, you brought this up before the break. Audits, one of the risk zones in practice. So do we get audited on the cash side of practice? I mean, not typically like you would, or the insurance side, correct? But we're not under the gun quite as much. Yeah, you don't have, you don't have insurance companies requesting records to evaluate whether or not they can pull money back out of you that they've given. So that's the reality. Yeah. An audit on the, an audit on the cash side of practice would be your state board coming after you for some reason, or somebody,, some kind of fraud issue or something. So that's not what we're talking about. So on the insurance side, that's where a lot of the audits happen. And so let's talk about the risk factor there. If you're heavy in insurance, if you're, I don't know, pick something. If you're an 80 percent insurance based practice, are you at higher risk of audits than a cash practice? Absolutely. Sure. Because you're throwing more billing out there. The more billing you put into the system, the more possibility there is that you're going to get audited. Now, have we ever heard of a client say, Oh my gosh, I can't wait to get audited. Audits are fun. Absolutely. Absolutely. No, no, no. And, I think the audit side of everything happens because we don't keep up with changes in the rules and the laws of what we're billing. we see this often. We see clients or, or other docs that are not clients too, that. Come to us with questions in regards to their billing and we're looking at it going. Well, you're following rules that are 20 years old. You're not up keeping where you should be and what you should be sending out. And that's where some of the traps fall. For audits, right? It's not keeping up, not reading that wonderful CPT book every single year, and we do need to be doing those things to keep up with it. Otherwise, it's just what we said. You fall into that risk side of everything under the insurance stuff. You brought up to me. an article that you were reading in regards to some hospitals and different things. And I think it's important to bring this up because this is not something that's chiropractic specific, right? It is across the. Board, whether you are a provider, of medical stuff. If you're a DO, if you're a hospital, if you're, it doesn't really matter what kind of facility you are, everybody's seeing declining reimbursement. Everybody's seeing declining reimbursement. So the, the article that I was reading is about rural hospitals and how many of the rural hospitals are operating in the red, so negative cashflow. And how many of them are at risk of actually closing up. And so these small communities are starting to flip out with the idea that they could be losing their local health care if that happens, because that's also going to suck the medical doctors away and those kind of things that work in those hospitals and. The conundrum is balancing rising costs, rising expenses, which we all feel in our chiropractic practices. Face paper today is way more expensive than it was five years ago, for example. So everything's more expensive. Employees are more expensive. Everything. I don't even need to make a list. And then the flip side of that is we've got declining reimbursement. General insurance companies, hospitals are paid differently than in Medicare than part B physicians. So it's not, it's not so much the Medicare, but I'm going to come back to that in a second. And then the Medicaid patients don't even begin to pay for themselves with reimbursement. And so you've got those two things happening. And then you've got in a lot of these rural communities, you've got the declining tax bases. So the way they lived in the past was they haven't made enough from insurance reimbursement to cover all the expenses for quite a while. State and local governments and agencies were coming in through the tax base and subsidizing these hospitals. Well, the tax base in so many of these rural communities is going down because especially after the pandemic, you have more and more people moving to larger, more urban environments or suburban environments and leaving a lot of the rural communities. And so tax base is going down. So now that subsidy. In a lot of instances is going away and it's leaving kind of this weird, potentially dangerous hole in the healthcare market as a result. So let me come back to Medicare. So in the chiropractic practice, we deal with declining reimbursement from general insurance, just like the hospitals and we deal if there's chiropractic benefits and Medicaid in your state, you deal with the same thing with Medicaid. It's not profitable. And then we have Medicare and Medicare does Medicare reimburse. Reimburse number one for only three codes and number two, does it go down every year? Pretty much, pretty much. I mean, it fluctuates a little bit, but I know since you and I've been in practice, it's, it's much lower than it used to be. Absolutely. So you're getting hit from all these angles on top of everything, rising costs, lowering reimbursements, creating this danger zone. Now the insurance companies. I have really stepped up audits because why do they want to do audits? Well, they want more profit. And so they look at us and say, well, if we can go in and find something wrong, we can get all our money back. And then some, and in some scenarios they can get seven times what they paid you back. So in some ways I'm thinking that the insurance companies might look at us as kind of a, kind of a savings account. Hey, we'll put 100 in and then in a year from now we can go get 700 back. I mean, that's a good deal. I'm not trying to scare everybody, but that's not the point here. But the point is, how does that make your practice stable or unstable? Right. And it goes back to where's that balance in your practice? Are you balanced with insurance versus cash? We see, a lot of practices. It's still heavy on the insurance side, meaning they've got 80 or 90 percent of their reimbursement coming from insurance patients or insurance side of everything versus their cash side. And it's an important thing to evaluate and make sure that you are in a more balanced scenario, uh, you know, and that way. Again, you set yourself up for a long term success in selling the practice when you get to that exit strategy, right? You set yourself up for higher reimbursement because you, if you set your fees and you have a good legal cash program available to patients, You end up with a better retention, so you end up not having to worry about as many new patients coming in the door. There's so many benefits. I could go on and on, but there's so many benefits to that side of, the practice and making sure that you're truly. Living in a balanced world. Yeah, that should be a song. When you look at the cash site, it's where your safety net is, it's where you're going to have less hassles, with records and those kinds of things, you still have to keep records. Yeah, but you're not going to have to print them off, read through them, sign off on them and ship them out as often as you're going to in the future on the insurance side. So there's, there's that part. We see the cash side of practice being more profitable, you know? So when was the last time you looked at your profitability, especially if you're having insurance based practice and you're watching reimbursement go down and expenses going up, how is that affecting your profitability? Your profitability is not just the amount of money you have in the bank, right, So are you truly turning a profit in your practice? When we look at revenue versus expenses, and if the insurance side of the practice is forcing you to be more high volume to make up the difference, how long can you work that hard? Yeah, well, and, and really, if you think about that, that high volume is, it's dangerous to the practice anyway, because you mentioned it earlier, you're hitting a capacity ceiling and bouncing back down a lot of times. So that means that if you're seeing a trend of peaks and valleys. That are pretty good in your practice. And you're watching those numbers. That's an issue, you know, you're hitting that capacity ceiling and that means you're working way too hard and probably not retaining very well. Yeah. And that's what those bumps are. That's your, your drop in retention. Absolutely. and you brought this up too, and I want to hit on this a little deeper. The cash side of practice is what brings value to your practice. So when we talk about value, what is your practice actually worth? And unfortunately we see this a lot. We see doctors who are thinking about selling and they want to put a value to their practice and oops, all of a sudden they realize, gosh, my practice isn't worth what I thought it would be. So we just spent a bunch of time at a seminar here recently talking about this and what are the things that make your practice more valuable on the street if you're going to sell it at some point, which, I think that's the assumption most of us make in practice is that part of our retirement nest egg will be what we get out of the sale of the practice. And if that's the case. You need to really start watching, I don't care how long you've been in practice, whether you're early in practice or late in practice, you need to be watching this because there are things that can take away value from your practice. And one of them is being heavy insurance. And it's important to know what those things are and really be evaluating that every single year to see where you're at and make sure you're staying up on that. For sure. Exactly. Exactly. So I know a lot of you out there probably interested in this conversation. And again, this is just a rhetorical thought that, we like to be a little disruptive in our thinking process. And so we just, we like to play the what if game. So do yourself a favor, take this to heart. What if insurance reimbursement goes away? How was your practice going to be affected? And work on if it, if you feel like it's going to be dramatically affected, negatively impacted, then work on strategies to start turning that the other direction. Bring some stability, some safety into your practice and create that safe haven, if you will, so that you don't just write reimbursement down to the bottom. Absolutely. It's so important, for your future and what, your values are going to be. So make sure you spend some time to evaluate that stuff. Yep, absolutely. So if you're a doctor out there that feels like you're stuck in the reimbursement slide, give us a call. Let's, set up a breakthrough call. Let's talk about your practice and some of the great things that we're doing with clients and how we might be able to help you. We can't help everybody, but, we sure enjoy talking to you guys out there and we do that for free. So all you have to do is go to our website at the very top. You can jump on my calendar and, Let's chat about your practice. So jump on my calendar and let's do that. Marissa, we've also got all kinds of resources on the website and so forth. Yeah, there's a ton of resources. I put something out not too long ago that gives you a sample of a lot of the different things that we do. sign up for it. It's free. Check it out, check us out. And then, It's something to really think about being disruptive in the industry. We have a great online program that gives you the basics, gives you, just a huge library of information from forms to videos, to all these things that help you stay up on all these conversations that we have. It's a great option for new docs, docs that have been practiced for a while that don't really need the one on one, but really want to stay. Plugged in and have that resource tool at their fingertips. So, check it out. It's a great program for everyone. Absolutely. And that library is being constantly updated and added to so many tools in there for practice success. Be sure to subscribe if you haven't already. To our podcast and tell all your friends and colleagues about it. Our podcast, we're very blessed is growing like crazy. So we appreciate all of our listeners out there. And of course we appreciate our sponsors, Chiro health USA, check them out. They're doing great things for practices as well as Kats consultants. All right, everybody. Thanks for tuning into the KC Chiropulse podcast. We will see you next time. Yeah.

21:06

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