Medical & Therapy Practices
Insurance payments arrive months after services. Multiple payers with different rates. Knowing actual practice profitability requires tracking beyond cash in the door.
The Industry
A therapist sees 25 clients a week at $150 per session. That should be $3,750 in weekly revenue. But insurance contracts mean you’re actually collecting $95 from Blue Cross, $112 from Presbyterian, and $85 from Medicaid. Some claims get denied. Others sit unpaid for 60 days while someone at the insurance company decides whether your documentation was sufficient. Patient copays go uncollected when the front desk gets busy. By the time you add it all up, that $3,750 in billed services becomes $2,400 in actual collections spread across the next three months.
Medical and therapy practices deal with financial complexity that most businesses never see. You deliver services today but might not get paid for months. Each insurance company pays different rates for the same service. Contractual adjustments reduce your billed amount before you collect a dollar. Patient responsibility portions need tracking and follow-up. Your practice management system tracks claims but doesn’t give you the financial picture you need to understand whether the practice is actually profitable or just busy.
Who This Covers
Who This Covers
Physicians, nurse practitioners, mental health therapists, physical therapists, occupational therapists, speech pathologists, chiropractors, acupuncturists. Solo practitioners and small group practices throughout Santa Fe and Northern New Mexico dealing with insurance reimbursement and patient billing.
What Makes It Complex
What Makes It Complex
Insurance reimbursements arriving 30 to 90 days after service. Multiple payer contracts with different rates for identical services. Contractual write-offs that reduce collectible amounts. Patient copays and deductibles that need separate tracking. New Mexico Gross Receipts Tax on healthcare services. Malpractice insurance, credentialing costs, and continuing education requirements eating into margins.
What We Handle
Revenue needs tracking by payer source so you can see which insurance companies actually pay well and which ones drag out payments or deny claims frequently. Patient self-pay and cash services get tracked separately from insurance collections. When you look at monthly financials, you should see where the money came from and how long it took to arrive. Accounts receivable aging shows what’s outstanding and how old those balances are getting so you know when follow-up is needed.
Practice overhead gets categorized properly. Malpractice insurance, licensing fees, credentialing costs, continuing education, professional association dues. These aren’t generic expenses. They’re required costs of running a healthcare practice that should be visible in your financials. GRT returns get filed accurately and on time. Tax prep captures deductions specific to healthcare providers including home office for telehealth, equipment purchases, and professional development costs that often get missed.
Revenue Tracking and Receivables
Revenue Tracking and Receivables
Collections tracked by insurance payer and patient self-pay. Contractual adjustments recorded so you see actual collectible amounts versus billed charges. Accounts receivable aging showing outstanding balances by age. QuickBooks configured to give you visibility into where revenue comes from and how collection timing affects cash flow.
Overhead and Tax Management
Overhead and Tax Management
Practice expenses categorized by type including clinical supplies, administrative costs, compliance expenses, and professional fees. Payroll for front desk staff and billing personnel. GRT returns prepared and filed monthly or quarterly. Tax preparation capturing equipment depreciation, professional development, and healthcare-specific deductions.
What Goes Wrong
Most practices record revenue when deposits hit the bank. The problem is that deposit represents services delivered weeks or months ago. A busy October shows as strong November and December revenue because that’s when insurance payments arrive. January looks slow even though you saw plenty of patients because those claims haven’t paid yet. You can’t tell if the practice is growing or shrinking because the timing disconnects service delivery from payment.
Contractual adjustments get ignored or lumped into a single bucket. You billed $180,000 last year and collected $120,000. Where did the other $60,000 go? Some was contractual write-offs. Some was denied claims. Some was patient balances you never collected. Without tracking these separately, you can’t identify whether the problem is bad payer contracts, billing issues, or collection failures. Meanwhile, equipment gets expensed when purchased instead of depreciated. Professional development costs get mixed with general expenses. Tax time becomes a scramble to reconstruct what should have been tracked all year.
Revenue Timing Obscures Reality
Revenue Timing Obscures Reality
Cash basis recording shows payment timing instead of practice performance. Busy months look slow because payments lag. You can’t identify seasonal patterns or growth trends. Financial statements don’t reflect actual patient volume or service delivery. Decisions get made on distorted information.
Write-offs and Adjustments Invisible
Write-offs and Adjustments Invisible
Contractual adjustments, denied claims, and uncollected patient balances lumped together or not tracked at all. You know you’re collecting less than you bill but can’t identify why. Bad payer contracts continue because the data isn’t there to show the problem. Patient balances age without follow-up because nobody’s watching.
What Changes
Collections get tracked by payer showing which insurance companies pay promptly and which drag payments out. You can identify payers worth keeping versus those causing collection headaches. Patient self-pay and cash services visible separately so you know how much revenue comes without insurance involvement. Accounts receivable aging reviewed monthly so outstanding balances get attention before they become uncollectible.
Practice overhead clearly categorized showing true cost of compliance, staffing, and clinical operations. GRT handled correctly without the stress of figuring out healthcare service exemptions or taxable ancillary sales. Tax returns prepared by someone who understands healthcare practice deductions and captures professional expenses that general bookkeepers overlook. Financial statements that actually reflect how the practice is performing instead of numbers distorted by payment timing from insurance companies.
Payer Performance Visibility
Payer Performance Visibility
Revenue by insurance company showing collection rates and payment timing. Data to support renegotiating poor payer contracts or dropping problematic insurance panels. Patient balance tracking with aging to improve collection follow-up. Clear picture of practice revenue sources and collection patterns.
Clean Books and Proper Tax Treatment
Clean Books and Proper Tax Treatment
Overhead expenses categorized showing malpractice, credentialing, continuing education, and compliance costs separately. GRT returns filed accurately and on time. Tax preparation capturing equipment depreciation, home office for telehealth providers, and professional development deductions. Financial statements you can use for practice decisions instead of numbers that need interpretation.
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