Performance Matters Matrix – Charging

Charging is the Achilles heel of most practices. In the mind of clinical professionals, compassion and service supersede all matters of business with the exception perhaps of their own compensation. The tendency for clinicians to undercharge is legendary. Tracking studies have found that 12- 15% undercharging is typical. When one realizes that the undercharged amount would go directly to the bottom line (profit) were it collected, the interest of management is tweaked.

Charging is located in the lower center of the Performance Matters Matrix. It’s value is obviously measured financially. It builds trust through the integrity that comes with the understanding of relatedness between promise and possibility and between money and mission. While mission is an organization’s appropriate focus and first priority, there is deep wisdom in the nonprofit humanitarian-aid  sector’s reminder of, “No money – no mission.” That reality is true for all organizations.

Charging is impacted by a host of variables such as: payer contracts, caps, discounts, and adjustments; care plans, charge capture, classification, coding, and posting; deductable / co-pay collections and cash management policies. Charging is a principle, a behavior and a discipline.

Charging encompasses matters of ethics, legality, fairness, integrity, accountability, and obligation. It determines the vitality, viability, and sustainability of an organization’s capacity to serve its community; it empowers an organization to  recruit, retain, train, and equip its staff.

Undercharging handicaps a professional community from carrying out its corporate social responsibilities for accessibility, affordability,  service, excellence, and advocacy. In that context, a professional community also has responsibilities for holding third party payers accountable for policy and decisions  that harm patients. Such responsibilities are compromised with undercharging. While regulators and watchdog agencies make isolated cases of fraudulent overcharging front page headlines, there is little if any recognition given to dedicated professionals who’s lack of business savvy and infrastructure undercharge billions of dollars annually in the US.

If cash flow is the life-blood of an organization (and it is) then charging is the life supporting heart that pumps it. Charging excellence is a competency of all top quartile practices. Statistically that means that charging excellence is not a competency of 75% of all practices!

With systems in place for charging excellence the stage is set for collecting…

All The Best!

Bob

(c) copyright 2010

Performance Builders