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  • Julie Herres

Tackling a financial emergency in your practice

I've heard from many practice owners that they are worried about making payroll next week . Many of our accounting clients are in a difficult situation due to Change Healthcare. It’s a tough situation to say the least, but we’ve been here before. Just a few years ago we were in a similar boat in the early days of the Covid-19 pandemic. I’m finding that many of the tips we recommended then still apply now.

As the business owner, your number one priority is to ensure the survival of the business. To do this you’ll likely need to protect your team (and keep them paid) as long as possible since they are the ones who generate revenue in the business. The suggestions below are all intended to be temporary measures to weather the storm.

The practices that are affected the most are those with salaried clinicians, leadership and admin. Regardless of insurance payments, your payroll won’t change. The second hardest hit practices will be those where clinicians are paid at the time of service regardless of when funds are received. When insurance stops paying, you owe your team even though the practice hasn’t been paid. The least affected practices are those that pay a commission when funds are received. Even though the impact is smaller, there can still be a significant impact.

Here is my advice:

  • Talk to your accountant. They know your business well, and they will probably have some ideas on what to do or will be able to help you manage cash flow.

  • Talk to your banker. If you don’t already have a line of credit they may be able to help you get one. (But it’s always easier to get a LOC when you don’t actually need it)

  • We are in survival mode. If you have a line of credit or an emergency fund it’s time to use it.

  • If you don’t have an emergency fund, use any funds you have saved for expansion, profit, and tax. Obviously it’s never ideal to use your tax funds but it’s still better than the business failing. I am cautiously hopeful that Change Healthcare will resolve before your tax payments are due and that you’ll be able to replenish the funds.

  • Allegedly Optum will be offering loans to impacted practices. If you qualify, apply for the loan

  • If possible, use personal funds to keep the business afloat, or if you are able, stop paying yourself from the business. (Temporarily of course.)

  • Stop paying your credit card in full (this is really expensive due to the interest rate, but might be necessary)

  • Talk to your vendors: landlord, consultants, etc. to see if you are able to pay them later than usual

If you’re in a situation where you may not be able to pay your team, be transparent with them. I don’t mean that you should scare them, but being communicative in a time like this will go a long way.

Here are some measures you can implement immediately to reduce costs:

  1. Stop discretionary spending (office supplies, replenishing team snacks, etc.)

  2. No admin hours for clinicians (or reduced hours)

  3. No CE reimbursement will be approved

  4. Reduce admin hours if possible

If you know that you won’t have enough funds for payroll because of this situation, let your team know. Talk to your them about reducing their salaries temporarily (minimum wage always applies, talk to your HR pro)

Know that you are not alone. Hundreds of thousands of health professionals are going through this same difficult situation. This too shall end.

Last but not least, when things get better remember this moment. Plan for and save an emergency fund. In a business, things WILL go wrong, often due to things that are out of your control. An emergency fund is the best way to be prepared.


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This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney or advisor regarding your particular facts and circumstances. GreenOak Accounting is an accounting firm that specializes in working with counselors and therapists in private practice. We provide monthly accounting & bookkeeping services, 1-time services and online courses. For more information on our specialized services for therapists please visit


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