Don't let charges escape (and why you should care)

Don't let charges escape (and why you should care)

Oct 01, 2005

Missed charges—services or products you provide but don't bill your clients for—may not seem that critical. After all, everyone knows that a few charges will slip through the cracks. And it's not as big a deal as calling Mrs. Fountain's beautiful male Irish setter a girl, right?

Before you shrug off the problem, consider this: Practices often drastically underestimate the cost of missed charges. Your practice could be hemorrhaging tens or hundreds of thousands of dollars each year.

Why should you care?

Practice owners often tell me they don't pay their team members more because they simply can't afford it. If you're helping your practice earn more by catching missed charges, there's a good chance you'll see both your pay and benefits increase. Additional profits also give your practice the opportunity to offer higher quality medicine because the owner can afford better equipment and more help. So capturing these charges is a win-win situation. It's good for the pets that need care, the clients who love them, the practice owners, and, importantly, you.

If you're worried that your boss won't reinvest the extra money you generate from capturing missed charges into raises, continuing education, or other benefits, consider this: You still benefit. At the very least, your boss will notice and appreciate your efforts. And you can take pride in doing a great job and building skills that make you a more marketable employee.

How bad is the bleed?

Most teams assume their missed charges are a slow dribble that doesn't amount to much. They're astounded when a medical record audit reveals the deluge that's occurring. One solo doctor practice I worked with in Texas wasn't billing clients for about 8 percent of its gross revenue. The hospital grossed about $500,000 annually, so they were losing $40,000 in income a year—money that could've been spent on an additional technician, a new ultrasound, continuing education, or raises.

A large practice I worked with in an affluent area found that its missed charges ranged from 5 percent to 20 percent of gross revenues, depending on which doctor's invoices they reviewed. Missed charges were draining the practice of about $500,000 in sales a year. Think what $500,000 could buy!

How much money is your practice losing? The best way to measure the leak is a medical record audit. Ask your manager for permission to review the records; this is a great task to tackle during slow times. You'll pick 20 medical records for each doctor—half outpatient and half hospitalized cases—from the most recent month.

Do not miss these leaks, either
For each week of the month, pick five records from different days of the week. Compare the services noted on the medical record to those listed on the client's invoice. Record your findings on a summary list—include the doctor's name, the client's name, the date of the visit, the day of the week, the total amount the client paid, all of the services or products the client received that weren't invoiced or were discounted, and the standard price of the product or service. When you're done collecting this information for each doctor, total the items the client wasn't charged for and calculate it as a percent of the amounts invoiced. (Go to for a sample audit summary form.)