Are you confident that your infusion biller is 99% accurate in capturing the high-dollar medications documented by your infusion nurse? Are your infusion nurses 99% accurate in their treatment documentation? Is your inventory management 99% accurate?
The problem is, 99% could be costing you up to 30-40% of your infusion profit every month. If you think that sounds dramatic, give me a few more minutes and I will prove it to you. I’ll also give you the tools to review this in your own practice.
Most offices would be proud of 99% accuracy, as they should be. In-office infusion management is no cakewalk. The workflow for biologic, IVIG and specialty medications is both complex and dynamic. If you have a staff that can keep up hundreds or thousands of lines of data accurately month after month, that is something worth being proud of. Of course, no one is perfect and people make mistakes…and if you have paper systems, excel spreadsheets, and EMR templates not connected to your inventory systems, you have leakage in your process. 99% may be fine for the practice, but infusion requires absolute precision if you want to make sure all your staff’s hard work is rewarded.
Here is the problem outlined as simply as I know how. Biologic, IVIG, and specialty medications are typically high cost / low margin products. I define low margin as 6-12% of a medications purchase cost. (Some readers of this article will laugh at the idea of getting margins that high, but please humor me for just a moment longer.)
For argument sake, let’s say your average medication margin is 10% and the Biologic product in question has a cost of $1,000 per treatment. That makes your medication profit $100. Let’s say your office does 100 of these treatments a month.
QUICK MATH SIMULATION
| 100% DOCUMENTED | $100,000 |
| 100% BILLED | $100,000 |
| 100% COLLECTED | $100,000 |
| REVENUE | $100,000 |
| – MED COST | $90,000 |
| – INVENTORY LOSS | $0 |
| MEDICATION PROFIT | $10,000 |
Not too bad right? Call me pessimistic, but I think it’s hard to say with a straight face that all 4 of the assumptions above can be assumed 100% for every practice.
We hear these lines from practices regularly …
“We have never lost a single vial in my ____ years….”
“Our billers are the best in the industry…”
“We have a special system that is better than…”
“Well, you don’t have a (insert staff name here), he/she never misses a thing…..”
For those of us who don’t have these magical systems in our offices, let’s get honest with ourselves and put in some more realistic, but very optimistic accuracy numbers and let’s run the simulation again…
(OPTIMISTIC) REAL WORLD MATH SIMULATION
| 99% DOCUMENTED | $99,000 |
| 99% BILLED | $98,010 |
| 99% COLLECTED | $97,030 |
| REVENUE | $97,030 |
| – MED COST | $90,000 |
| – INVENTORY LOSS | $0 |
| MEDICATION PROFIT | $7,030 |
In this example, 99% gets you ~3% of leakage which amounts to…
- ~30% loss in profit $7,030 vs $10,000 monthly, a $2,970 lost profit per month
- Annualized, that is $35,640 in lost profit per year!
Do we have your attention now? Now let’s get honest about our REAL numbers now. Even if we had 100% accuracy in our inventory, nursing documentation, and billing – the payers and patients are going to make it very difficult to get 100% of collections on our billing.
MORE REAL WORLD MATH SIMULATION
| 99% DOCUMENTED | $99,000 |
| 99% BILLED | $98,010 |
| 99% COLLECTED | $97,030 |
| REVENUE | $97,030 |
| – MED COST | $90,000 |
| – INVENTORY LOSS | $900 |
| MEDICATION PROFIT | $6,130 |
In this More Real World example, 99% gets you ~4% leakage which amounts to…
- ~40% loss in profit: $6,130 vs $10,000 monthly equals a ~$4,000 loss in profit per month
- Annualized, that is $48,000 in lost profit per year!
There isn’t much room for error in infusion. The lesson here is not that you shouldn’t be doing in-office infusion, the point is, that small mistakes that happen upstream of billing have compounded implications downstream that will cause big problems in your bottom line. This simulation assumes a 10% average margin on your medications. That means for every 1% of leakage, you lose 10% of your profit. That loss ratio is more significant if your medication profit margin is less than 10%.
At 5% margin, which is close to what we see for current Medicare, every 1% of leakage is a loss of 20% in profit margin. If we updated our last simulation to reflect only Medicare, the same leakage of 4% would compound to a monthly profit loss of 78%!
As you can see, overconfidence in your systems and processes will certainly rob you and your practice of real dollars. If you want 100% accuracy in Inventory, Documentation, and Billing you must have a Connected system that Fully Reconciles the infusion workflow from the Order –> Scheduling –> Documentation –> Inventory Management and then produces Billing Output. If mathematically, your connected system validates all of these steps to the end, then the billing output will be 100% accurate not only to the documentation but to the Medical Provider’s original intentions for the patient’s treatment.
In Infusion, we say you have to KNOW not THINK. If you don’t THINK that your current system is operating at 100%, you no longer have to wrestle with that doubt in your mind.
Using the WeInfuse software system for your in-office infusions, you can KNOW 100% that every vial purchased is accounted for, documented, and on your claims.
Getting payers to pay you honestly for that perfection? We are not miracle workers here. 🙂
