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Dr. Sharp: Hello, everyone. Welcome to The Testing Psychologist podcast, the podcast where we talk all about the business and practice of psychological and neuropsychological assessment. I’m your host, Dr. Jeremy Sharp, licensed psychologist, group practice owner, and private practice coach.

This episode is brought to you by PAR. PAR has recently released the Feifer Assessment of Childhood Trauma or the FACT, the first and only comprehensive instrument measuring how stress and trauma can impact children in a school-based setting. You can learn more or purchase the FACT teacher form by visiting parinc.com\fact_teacher.

All right, everyone. Here we are again with the 5th episode in the Holiday Hopes series. If this is your first Holiday Hopes episode, definitely go back and check out the previous four. This is a short seven-part series where I’m talking about a different business topic each week leading up to the holiday with the intent to inspire you to change one or several of these things in your practice in the new year.

Today’s episode is all about collections. I use the term collections in a general sense, not just specifically sending people to collections, we will talk about that, but collections in general, so tightening up your financial practices to make sure that you are collecting the money that you should be collecting in your practice. If that sounds compelling to you, listen on.

Before I get to the full discussion though, I want to invite any of you who are at any phase of your practice to reach out if you are interested in group coaching. All three of my group masterminds: beginner, intermediate, and advanced have filled the current cohorts. So, I’m starting back over and filling new cohorts for each of those groups. So no matter what stage of your practice you’re at, there is a mastermind for you. And I would love to chat with you to see if it would be a good fit. You can get more information generally about the groups at thetestingpsychologist.com/consulting and schedule a pre-group call to see if it’s a good fit.

All right, let’s talk about making that money.

Okay, y’all. Let’s talk about money. Here’s the thing. There are many ways that we can lose money in our practices. Some of them are not immediately obvious. So I’m going to talk through, just briefly, three ways that you could be losing money in your practice. And then I’m going to talk through some strategies to stay on top of your finances and make sure that you’re getting paid for the work that you do.

One of the ways that we lose money in our practice is by undercharging. When I say undercharging, they’re actually two elements to that. One is, literally undercharging, setting your rate too low. I’m not going to talk a whole lot about that because that’s a pretty straightforward process and I have already talked about rates in a previous Holiday Hopes episode.

The other means of undercharging though that I want to touch on is working more than you are charging for. When I say that, I mean all those hours that you are putting into the evaluations that don’t get charged. I hear this so often from my consulting clients. They’re like, well, I felt bad adding on that extra hour or two that I spent on the phone, or I don’t charge for the IEP meetings, or I reviewed this report and wrote in denim and it took an hour, but I don’t want to charge people for that. And while this is… maybe it may seem kind and you’re doing clients a favor on the surface, and maybe you are, who knows, in the grand scheme of things, you are nickel and diming yourself to the point that you may get burned out or just resentful, under-appreciated, and again, underpaid.

So charge for your time. That’s it. Charge for your time. You can have a pretty strict policy that I recommend detailing in your office policies or your consent document. For us, it means that we charge for everything in 15-minute increments, any extra activities, extra testing, anything in 15-minute increments.

Over time, I’ve gotten pretty clear with clients that clinical activity or talking on the phone or attending meetings and things like that, anything that goes beyond the typical scope of an evaluation will be charged and let them know what the rate for that is.

A member of one of my recent mastermind groups went even further and said that she details in her consent documents exactly what is included in the “scope of an evaluation.” Now, this might be different for different practices, whether you take insurance or do private pay, but the key theme here is that you communicate clearly what is included in the evaluation process and similarly, make it very clear what is not included in what will be charged extra for.

A good example is, say a parent might email me and say, hey, I would love to chat just for a little bit about X diagnosis and why that might be relevant for my child. And I’ll say, “Great. Let’s schedule a time to do that. I just want to be clear that this time is billed at the typical hourly rate and we’ll bill it to your insurance if appropriate.”

I often hear practitioners getting nickel and dimed with email time. Again, we’ve gotten pretty strict about this in our practice where if parents start down the path or adult clients start down the path of clinical emails to us, we will respond kindly but clearly, and say, this sounds really important. Let’s schedule a time to talk about this in person. So we do not do clinical stuff over email whatsoever.

All right. So that’s the first way. You’re just undercharging. You’re not billing for the time you’re actually spending. The flip side of that is overworking. You could also call it overworking.

The second way that you might be losing money is by under-collecting. So this really gets at your collections process. How do you keep track of the money that you’re owed and make sure that you are getting paid that money? With private practice, it can be a lot easier, a lot more straightforward. Sorry, with private pay, it can be a lot easier, more straightforward. With insurance, it gets a little more complicated because you have to track insurance aging. And there’s a lag in the payments. So you have to track that.

This was my story very early in the practice is just being completely oblivious to the aging spreadsheets in my practice and running up a pretty big balance without knowing it over the first few years. So that’s the other piece. Under-collecting is that you’re doing the work, maybe you’re even charging for the work, but you’re just not collecting for the work.

There might be any number of reasons for that. Maybe you feel bad. Maybe clients just don’t want to pay and they’re being obstinate. Maybe insurance isn’t paying. So there are any number of reasons, but the action item is to identify the problem in there and figure out how to solve that problem. I’ll give some ideas on how to do that here pretty soon.

The last way that we lose money in our practices is a way that flies under the radar a bit. And this scenario is that we are doing tasks that we shouldn’t be doing. What I mean by this is engaging in those practice management tasks that you don’t get paid to do. So this will be like answering the phone, sending emails, sending out questionnaires, making copies, any number of little clerical or administrative tasks that you should not be doing. Web design, marketing, all that stuff.

And the way that this leads to losing money is by the fact that you would not pay anyone else, any other professional, your hourly rate to do those tasks. So you are the most overpaid administrative assistant, web designer, bookkeeper, you name it. No professional in any of those fields are going to charge the same amount that you do per hour. So every hour that you spend on administrative tasks is an hour lost where you could be making your actual clinical rate.

Let’s take a quick break to hear from our featured partner.

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All right, let’s get back to the podcast.

So, that’s the last way. Now the solution to that one, I’m going to go in reverse order here, the solution there is to hire help. So figure out the tasks that you need done and hire an administrative help, receptionist, web designer, marketing person, bookkeeper, whatever it may be. That will free you up to do clinical work. You will get paid more for your time and you can also just take that time off if you would like.

As far as under-collecting, if you’re not already requiring a credit card on file, I would highly suggest that you amend your paperwork and make that simple change for 2022. It’s a very easy change to make. We have been requiring a credit card on file for at least 2 to 3 years. And it just makes things simpler.

You also can amend your informed consent to make sure that people know exactly when their card will be charged. Make it very clear at what point during the evaluation you’ll charge. Make sure that people are aware of that. People do not like financial surprises. We’ve put it in our paperwork. We talk about it on the phone in the initial phone consultation. We talk about it during the intake. We talk about it on testing day. There are a lot of touchpoints to make sure that people are aware of the financial policies.

Now, as far as tracking your collections, that can happen pretty easily in your EHR most of the time. I mean, almost every EHR worth its salt will, or actually every EHR worth its salt will track those numbers for you. So you should be able to track monthly or quarterly numbers in terms of gross revenue or how much you charged versus how much you were paid both from insurance and from clients. So they would be called either the patient aging statement or the insurance aging statement. And you can get a nice snapshot of exactly how much is floating out there that you have not collected based on what you have billed.

So I would recommend getting very well acquainted with that feature in your EHR. And if you just can’t be bothered to do that, you need to hire a billing person who will do it for you. I would target a 95% collection rate between insurance and patients. Anything less is not great. Anything more is awesome. So, shoot for 95% of collections.

Speaking of collections, let’s talk about actual collections. People tend to shy away from collections. I see a lot of questions about sending people to collections or not. We’ve been sending folks to collections in certain circumstances for at least 5 or 6 years and have thus far had, I can think of one complaint right off the top of my head. I’ll take that back. Two complaints off the top of my head. Neither of them was particularly well-founded, but people get upset with financial distress or surprises like I said.

I would look for a collections company that is reputable, that works with medical practices, or better yet, mental health practices. And as before, the theme here is communication. So as before, I would communicate very clearly with people if and when they might be sent to collections. For us, that means, if we sent you three statements and you haven’t responded, what we do is that third statement is on pink paper. So it catches your attention. There’s a big bold statement or line on that statement that says, this is your last statement. We will send you to collections if you haven’t paid in a month.

Now, over the course of the next month, and granted, this is all detailed in our informed consent as well. So, if the patient has not paid for the next couple of weeks after receiving their third pink statement, they get a phone call and an email just as a courtesy reminder to say, hey, we’re about two weeks out from a month going by after your last statement, you will be sent to collections if we don’t have payment by the end of this 30 day period. And so we try to give another courtesy contact to let people know. By that time, if they have not responded, they are sent to collections.

So I would not shy away from that. There is a way to do it respectfully and politely. In our case, we make sure to offer people payment plans or to talk with them. We try to give them every opportunity to pay their bill before they go to collections, but sometimes it has to be done. You deserve to be paid. I think that’s the theme of this episode is you deserve to be paid for the work that you’re doing.

So I hope that this has been helpful and perhaps motivated you a bit to change up some of your financial policies for the new year, or at least do an honest audit of your time and figure out how you’re spending your time and if you are charging for your time.

The one thing that I didn’t really mention but I will briefly mention is, I know people are saying, oh, but insurance only reimburses a certain number of hours. There’s no way I can get that evaluation done in that amount of time. Well, that may be true. And you have a decision to make at that point. You have the decision to make of either working within the confines of insurance and finding a way to adapt your evaluation process to fit within those hours or continuing to work for free.

That’s as simple as it gets. So, if you are an insurance-based testing practice and you’re in a state or an area where hours are pretty limited with specific panels, I think it’s incumbent upon us to figure out a way to fit the evaluation into those hours and communicate that to clients and be able to say, “Hey, we’ll do our best. We just don’t get reimbursed for that many hours. So here’s what that will get you. I understand if that’s frustrating. We can talk about out-of-pocket options if you would like.”

So, short and sweet. Again, just a few things to think about on the financial side. Good luck as you work through this process and hopefully make some changes in your practice.

So if you are a practice owner at really any stage of development, beginner, or middle or advanced where you’re starting to hire and expand your group or work on your leadership skills, there is a Testing Psychologist Mastermind Group for you. So these are group coaching experiences where you get accountability, vicarious learning, and focused support from the group on the concerns relevant to your stage of development. You can get more information at thetestingpsychologist.com/consulting and book a pre-group call to talk with me about whether it would be a good fit.

All right, y’all. I hope everyone is doing well. I’ll look forward to talking to you next time.

The information contained in this podcast and on The Testing Psychologist website is intended for informational and educational purposes only. Nothing in this podcast or on the website is intended to be a substitute for professional, psychological, psychiatric, or medical advice, diagnosis, or treatment.

Please note that no doctor-patient relationship is formed here. And similarly, no supervisory or consultative relationship is formed between the host or guests of this podcast and listeners of this podcast. If you need the qualified advice of any mental health practitioner or medical provider, please seek one in your area. Similarly, if you need supervision on clinical matters, please find a supervisor with expertise that fits your needs.

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