Missing charges? Your software should help
Joy Fuhrman, DVM, MBA, CPA, is Chief Operating Officer at Shepherd Software.
Make sure your next practice management software (PIMS) choice will help your veterinary practice avoid missed charges.
This veterinary cat catches so many missed charges, they come in foreign currency. (Nadia / stock.adobe.com)
Missed charges are a pervasive problem across veterinary practices nationwide. Some experts estimate that, on average, practices are losing upwards of $64,000 per doctor each year in revenue. This lofty number isn't the result of theft, discounts or the failure to upsell products and services. Instead, missed charges are a direct result of the all-too-common habit of unintentionally neglecting to charge clients for services that were performed.
Need proof? Run a small audit
According to an AAHA white paper from a few years ago, one of the biggest sources of missed charges is diagnostic services. In fact, after conducting hundreds of audits, the association found that, on average, hospitals were failing to invoice 17% of their diagnostic charges. Other commonly missed charges include fecal exams, injection fees, recheck exams, ultrasound-guided cystocentesis and blood draws. Before you presume that your practice is immune to such errors, consider performing a simple internal invoice audit.
Select 10 random invoices for each veterinarian in your practice from the previous quarter. Try to collect a sample that includes a variety of cases, such as a hospitalized patient, a surgery and an outpatient. Review the corresponding medical record for each invoice, and compile a list of all of the services performed and products used. Then, compare the medical record to the invoice to figure out whether the client was charged for:
- all services performed
- the appropriate number of days or hours hospitalized
- every injection given
- the total amount of intravenous fluids administered
- all testing, even if the results were negative.
Once you've compared the medical records to their respective invoices, total up the missed charges and calculate an average missed charge per invoice. How did your practice do? You may notice that one doctor tends to miss more charges than the others or that most of the missed charges are from hospitalized patients.
Remember, human error is unavoidable, especially in a busy hospital. Consider this scenario: A dog is brought in for an annual heartworm test. While the veterinary technician is escorting the pet owner and dog back to the front desk to settle the invoice, the client asks if it's possible to have the dog's nails trimmed. The technician complies and sends the client out the door. It's only until after the invoice has been paid and the client has driven away that the technician realizes the nail trimming was never billed for. Do you send an invoice for $13 to cover the nail trim? Or do you absorb the cost? The cost of a nail trim pales in comparison to a major surgery, but it's still a missed charge. And if your clinic is repeatedly absorbing the costs of small, routine services, the deficit will add up.
How do we fix it? Early software and consultants have tried
Missed charges are a problem that dates back to the earliest days of the veterinary profession-as are the inefficient attempts to correct the issue. When clinics were managed with paper records and manually written invoices, it was standard practice for each appointment to have a travel sheet. The travel sheet was essentially a record of every service and product that a practice offered, along with its associated charge. When a patient checked in, the travel sheet would travel with the patient from the exam room, to the treatment area, to surgery and so on. The doctors and staff attending to the patient would circle the procedures being performed. The travel sheet would then be submitted to the front desk at the end of the appointment so that a proper invoice could be created based on the items marked on the sheet.
The adoption of practice software (PiMS, practice management systems) gave veterinary teams the ability to generate electronic invoices. The earliest versions of software, however, didn't integrate medical records and invoices. As a result, procedures recorded in the medical record could still be missed on the invoice. To combat this, some hospitals continued to use travel sheets, while others opted to have staff members check invoices for errors. Although well-intentioned, these procedures were time-consuming and inefficient.
Many clinics also turned to management consultants to identify the percentages of services being performed but not billed. While these audits are a great tool, they don't necessarily 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 the mistakes don't happen again, but this assumes your staff isn't aware that they should be charging the client for that service or product when, in reality, missed charges are more commonly unintentional. Oftentimes they occur due to lack of recall or staff being distracted with other tasks. No amount of training can prevent this type of inadvertent oversight.
Ask your current software to do it
Rather than instituting time-consuming processes-a manager double-checking each invoice before a client pays-consider updating your current practice management software. Many programs integrate client information, financial reporting and other beneficial features into one system to help eliminate errors.
Consider a practice management software product that allows for multiple users in multiple locations throughout the practice. This way you can provide a tablet, laptop or desktop PC in each examination room that a veterinarian or veterinary technician can turn to throughout the examination. This way, every service that is performed is accounted for in the system before the patient and client leave the room. Some software can even create treatment plans with estimated charges.
Before you commit to your next big software switch, request a demo so you can explore how the system functions and whether its features are compatible with your requirements. Be upfront with sales representatives about the missed charges your practice has identified, and let them demonstrate how their product can address your specific needs.
Joy Fuhrman, DVM, MBA, CPA, is chief operating officer at Shepherd Software.