Joy Fuhrman, DVM, MBA, CPA
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Joy Fuhrman, DVM, MBA, CPA

Director of Finance and Operations

According to a survey conducted by Veterinary Economics, veterinary practices miss $64,000 in fees per full-time veterinarian each year. Think about that! For a two-doctor practice, that’s another full-time veterinarian that could be hired! Or a diagnostic ultrasound! Or bonuses for your staff! According to AAHA, the average hospital is missing 17% of its diagnostic charges, while other sources claim that 80% of practices are missing 10% to 15% of revenues through missed charges.

To be clear, we are not talking about clients or even employees walking out of your hospital with products that have not been charged. We are not even talking about clients declining your recommendations or staff not offering additional services to a client that could benefit their pet. We are not talking about discounting services, given services or products away or offering promotions. Rather, we are talking about unintentional neglect in charging clients for services actually performed.

Missed Charges? Not I, you say!

If you truly believe that your practice has never missed a charge, then consider testing your hypothesis by performing an invoice audit. Select 10 to 20 random invoices for each doctor from the last quarter. Try to cover a wide range of cases including a hospitalized patient, a surgery case and an outpatient invoice. Review the medical record and make a complete list of all the services performed and products used on that patient. Now compare the medical record to the invoice. Were all services correctly charged? Was the hospitalized patient charged for the appropriate number of days or hours? For the total amount of IV fluids administered? For every injection given? Was the surgical patient charged for the full time of the surgery? Were any suture packs missed? How about the outpatient? Was the dewormer given in the clinic charged? What about the heartworm test that was negative? Now add up the amount of the missed charges and calculate an average missed charge per invoice. How did your practice do? Did one doctor tend to miss more charges than another? Were most missed charges for outpatients or hospitalized cases? Calculate the average missed charge per invoice as a percentage of the total invoice. How does this compare to the industry averages outlined above?

How often do you bring a patient to the treatment room for a blood draw and vaccinations and while the technician is walking the dog out of the exam room the client says: “While my dog is here, please could you do a toe nail trim.” How often do you catch yourself after the client has left the hospital saying, “Shoot, we forgot to charge for the toe nail trim!” But what do you do? Run after the client for the $13 charge? Send an invoice in the mail? Or just eat the missed charge? If your Average Transaction Charge is $130, that $13 nail trim is 10% of your invoice. And if you are like the average veterinary hospital, you probably miss that toe nail trim in up to 20% of cases. That’s a whopping 2% of your gross revenues!

Remember Travel Sheets?

This problem of missed charges has been around as long as our profession. Over the years, numerous attempts and “best practices” recommendations have been made in an attempt to recapture these lost revenues. Back in the day when veterinary practices operated with paper records and manual written invoicing, the operating standard was to have a travel sheet. This travel sheet was essentially a record of every service and product that a practice offered, along with its associated charge. When a patient was checked in, the travel sheet would essentially “travel” with the patient from the exam room, to the treatment area, to surgery, etc. and the doctors and staff performing procedures on the patient would be able to check or circle the procedures being performed. The travel sheet would then find its way to the front desk when the client checked out and the CSR would be able to prepare an invoice for all the items marked on the travel sheet.

The Advent of PiMS

With the introduction of Practice Management Software Systems (PiMS) came the ability to generate electronic invoices. However, these systems did not integrate the medical record and the invoice so procedures recorded in the medical record could still be missed on the invoice! Some practices continued to use their travel sheets to overcome this issue. Other practices would have two staff members check each invoice—a well-intentioned, but time consuming and inefficient operating procedure.

Later, the diagnostic companies introduced one-way and two-way integration of the diagnostic services with the PiMS, which was easy for them to do given that they owned and operated both systems. They touted that integrating their diagnostic equipment and reference lab services with their PiMS, would reduce missed charges on diagnostic services. While this may certainly have been true, this precluded practices from using other diagnostic systems or services and the cost-benefit in terms of the system set up costs was not always worth the additional revenue capture. More importantly, this only addressed one area of practice revenues.

Introducing Bundles

Similar to the travel sheet is the surgical use sheet. This is a list of all equipment and products available for use in surgery along with its associated charge. Theoretically, the surgery technician should mark off each item used during a surgery. However, what often happens is that the surgery technician gets caught up doing something more important—keeping the patient alive under anesthesia—and the surgical use sheet gets neglected. Another loophole that occurs is when the client is invoiced using a “bundle” and the surgical use sheet is, for all intense and purposes, ignored during the invoicing process.

While bundles are designed to save time and effort in generating estimates for clients, they can often result in charges being unintentionally missed. In most cases, bundles can help ensure that all products used in a particular procedure are invoiced, however, if the bundle is set up incorrectly or if the procedure requires more time or products than is typical, then charges can still be missed.

Enter the Consultants

As missed charges became an ongoing issue for the profession, consultants around the country devised new ways of ensuring that practices would avoid (or at least reduce) missed charges. If you have ever hired a consultant to examine your practice’s pricing structure, you have probably been advised to charge for three radiographic views even if you are able to obtain the diagnostic information you need with just two orthogonal views. They may have also advised you to eliminate small diagnostic panels (e.g. liver or kidney panels) in preference to performing a complete chemistry.

Performing audits such as comparing estimates to invoices to see if any charges were missed is a great way to identify charges that have slipped through the cracks. However, this does not help improve the process to avoid future missed charges. You could use this information as a training exercise for your staff to try to ensure that this mistake doesn’t happen again. However, this assumes that your staff are not aware that they should be charging the client for that service or product when, in reality, missed charges are more commonly completely unintentional and occur due to lack of recall or staff being distracted with other tasks. No amount of training can prevent this type of unintentional oversight!

Some of the most common missed services include fecal exams, medical progress (recheck) exams, ultrasound-guided cystocentesis, and blood draws for outpatients. For hospital cases, re-examinations, hospitalization fees, injection fees, or the use of IV fluid pumps are often missed. These charges can easily add up to tens of thousands of dollars in lost revenues and possibly hundreds of thousands of dollars in practice value.

If you have a practice manager you may have them periodically review statements from your reference laboratory to ensure that your clients are charged for those services. But again, this is time consuming and inefficient and only identifies missed charges in the past. Unless you are willing to send a bill to your client after the fact, this exercise may not be worth your time.

Every time a new associate doctor or technician is hired, extensive training is required on your fee schedule and your billing protocols to ensure that all staff are clear on your expectations about charging for services and products. This is a time-consuming exercise and let’s be honest, in a busy veterinary practice, formal staff training is the first thing to be overlooked!

A New Way of Thinking

What if there was no need to input charges into an invoice? What if, recording your services performed in the medical record was enough? At Shepherd Software we have re-engineered how veterinary practice invoices are created. Shepherd’s Veterinary Experience Technology (V.E.T.™) is the first and only software that can claim that if it’s in the medical record, it’s in the invoice! Between 80% and 100% of previously missed charges are automatically captured without changing anything in your hospital flow and without spending time on inefficient, backward-looking audits.

How is This Possible?

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Shepherd V.E.T.™ was designed by veterinarians to operate and flow in the way that veterinarians think! The doctor devises the treatment plan and creates an estimate.

Once the estimate is approved by the client, the entire estimate is pushed into the treatment plan—with the simple click of a button! From there, treatments can be scheduled and instructions such as doses can be added.

treatment list in Shepherd to help capture missed charges
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a Shepherd invoice capturing missed charges
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When the technician marks a treatment as “administered” it is automatically recorded into the medical record indicating the date and time as well as the person who administered the treatment AND it is added to the invoice! Better yet, if the treatment administered is a controlled substance, it is automatically added into your controlled drug log. One step to accomplish what was previously three different tasks! Shepherd improves invoicing accuracy, increases revenues, improves compliance, and saves you time!

The Technology Revolution

Technology is evolving rapidly and the veterinary profession is evolving along with it. Think about it. Just a few years ago you probably had a phone and a calendar. You may also have had a pager and a desktop computer too. Today, we have everything all in one place! Because it’s much easier and much more convenient that way. We have leveraged technology to simplify our lives! Why not do the same in your veterinary practice? Why not use technology to shorten workload, save time and improve work-life balance?

Without changing anything else in your practice, Shepherd Software can help grow your practice revenues by an average of 13% per month just through capturing missed charges. What would you do with the extra money that is being left on the table?

Sign Up Now!

See how Shepherd can help you transform your practice, save you time,
increase your profitability, and boost staff satisfaction!

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