$380K in revenue, $12K in profit: the payer mix problem nobody saw
Anonymization note: Individual provider profitability data — shared only with owner consent and identifying details removed.
The highest-revenue provider. The lowest profit. Nobody checked.
Ask any front desk in the practice who the star provider was and you got the same name. Highest patient volume. Highest gross revenue at $380K. The owner assumed they were the most profitable provider in the group.
Nobody had checked. The practice had no provider-level P&Ls. Revenue was tracked in aggregate. Profitability was assumed, not measured.
When we built the first provider-level financials, the answer was $12K in annual profit — a 3.2% margin on the busiest provider in the practice.
High volume, wrong payers, wrong codes
Heavy Medicaid payer mix with low reimbursement rates
60%+ of medical derm visits reimbursed at rates that barely covered direct costs
Consistent under-coding of visit complexity
Level 3 E/M visits billed when documentation supported Level 4
Fee schedule not updated in 3 years
Med spa cash-pay rates were 12-18% below current market for multiple procedures
Two consistently unprofitable procedures still performed
Combined loss of $800-1,200/month with no clinical necessity
Shift the mix, update the rates, stop the bleed
The fix was not about working harder. The provider was already the busiest in the practice. The fix was about working on the right patients at the right rates.
We restructured the scheduling approach, updated the fee schedule, pursued re-credentialing with higher-paying networks, renegotiated three payer contracts, and moved to Level 4 E/M coding where documentation already supported it.
Shifted scheduling priority toward commercial and cash-pay patients
Updated fee schedule to current market rates across all CPT codes
Re-credentialed provider with two higher-paying insurance networks
Renegotiated 3 underpaying payer contracts
Stopped performing 2 consistently unprofitable procedures
Moved to Level 4 E/M coding where ModMed documentation supported it
Provider profitability aligned with production in 6 months
Provider annual profit
$12K
$87K
Profit margin
3.2%
11.4%
Average reimbursement per visit
Below cost on 60%+ of visits
Above cost on 90%+ of visits
Unprofitable procedures
2 performed regularly
0
“We assumed our busiest provider was our most profitable. The data showed the opposite.”
Key Takeaway
Without provider-level P&Ls, you are guessing which providers make you money. Volume is not profitability. Revenue is not profit. The busiest provider in your practice might be your least profitable.
Methodology
Methodology: Recovered revenue is defined as the difference between billed and collected charges attributable to fixes Sorso identified and clients implemented, measured over 90-day windows post-engagement. Figures are specific to the engagement and are not predictions.
Think your practice has similar issues?
Take the 4-minute financial assessment. It is free, and it will show you where your practice is leaking money.