{"id":9742,"date":"2021-02-01T00:00:20","date_gmt":"2021-02-01T08:00:20","guid":{"rendered":"https:\/\/todaysveterinarybusiness.com\/?p=9742"},"modified":"2022-06-15T17:47:44","modified_gmt":"2022-06-15T17:47:44","slug":"missed-charges-veterinary-revenue","status":"publish","type":"post","link":"https:\/\/navc.sitepreview.app\/todaysveterinarybusiness.com\/missed-charges-veterinary-revenue\/","title":{"rendered":"Don\u2019t Misfire on Missed Charges"},"content":{"rendered":"

Missed charges, a problem in veterinary practice for as long as the profession has been around, is not about clients or employees walking out of your hospital with unpurchased products. It\u2019s not about pet owners declining medical recommendations or staff members forgetting to offer additional services. It\u2019s not even about discounting a nail trim or giving away a bottle of ear cleanser. Rather, missed charges is simply about unintentional neglect in charging clients for services performed. What many practice owners fail to recognize is that not documenting all charges on the client invoice has far-reaching effects.<\/p>\n

For example, if you forget to charge for a heartworm test, the client might think the test wasn\u2019t performed and could mistrust your practice. The lack of documentation might mean you don\u2019t send a reminder for a repeat heartworm test in six months. Your ability to capture revenue for current and future exams, heartworm tests and heartworm preventives is severely impacted.<\/p>\n

Some of the most common missed charges during outpatient appointments include those for fecal exams, medical progress exams, ultrasound-guided cystocentesis and blood draws. Often missed with in-patients are daily hospitalization fees, injection fees and IV fluid pump charges. All those missed charges can easily add up to tens of thousands of dollars in annual lost revenue and hundreds of thousands of dollars in reduced practice value.<\/p>\n

Missed charges in veterinary practice are estimated at 5% to 10% of actual revenue. This means a hospital grossing $2 million a year could have let an additional $200,000 go uncollected. Assuming the practice is valued at five times earnings, that\u2019s a $1 million reduction in hospital value.<\/p>\n

Let\u2019s examine a few advanced tools that can easily be leveraged.<\/p>\n

1.<\/strong> A fast way to identify where missed charges occur is to analyze your income-to-expense ratios by category. For example, if reference laboratory costs increased but the revenue did not grow proportionally, then there\u2019s a good chance that not every test ordered was billed to the client.<\/p>\n

Start by having matching expense and revenue categories. The AAHA\/VMG Chart of Accounts \u2014 learn more at bit.ly\/3hUPIh9<\/a> \u2014 can get you set up.<\/p>\n

2.<\/strong> Data analysis apps, such as those from VetSuccess and iVET360, integrate with your practice information management system. You can see metrics and, more importantly, trends in those metrics in one click.<\/p>\n

For example, if your diet revenue-to-expense ratio<\/a> for the past three months was 1.5-to-1, your gross margin on food sales was 50%. If this month the ratio fell to 1.2-to-1, your gross margin is only 20%, suggesting that either the cost of the food you purchased rose without a proportionate increase in the sales price or some dispensed food was not documented.<\/p>\n

If your PIMS does not integrate with a data-analysis program, consider an app that works with your accounting platform. Fathom, for example, integrates with QuickBooks and Xero.<\/p>\n

3.<\/strong> Once you identify commonly missed revenue opportunities, set up bundled charges. For example, if the charge for fecal testing is forgotten when a client brings in a sample for a routine adult wellness exam, create an Adult Wellness Bundle that includes the exam, fecal test, bloodwork and urinalysis, heartworm test, and vaccines or vaccine titers. Doing this allows you to:<\/p>\n