The Year's Best Medical Practice Management Tips: 2011

From Medscape Business of Medicine Leslie Kane, MA Posted: 10/24/2011 Medical practices are going through seismic changes, and physicians are looking for ways to increase revenue or lower costs. There are many tactics that address the myriad ways to do both of those: by changing practice strategy; adding services; solving patient-flow and workflow problems that have been ignored; and focusing more on getting money that is owed to you. Throughout the year, Medscape has offered expert advice on ways to build a more successful practice. Here are some of the tips that physician readers found most helpful. 1. Offer Your Patients One-Stop Shopping For your patients' convenience, do everything possible in-house: Draw blood, conduct urinalyses and stool guaiac tests, and so forth on your own. You should be able to bill for these items, and your patients won't have to wait at an outside lab to get the services that they need. When your patients need outpatient procedures that you cannot offer in-house, help them schedule appointments while they are in your office so that they won't have to hassle with the bureaucracy. Make their lives easier and they will reward you for it. 2. Get New Patients by Creating a Niche You'll go broke if you wait for sick patients to walk through the door. There aren't enough of them to go around. Consider doing wellness medicine, which widens the scope of potential patients to include everyone. Develop a subspecialty such as in dermatology, thyroid disorders, diabetes, or geriatrics. Get into occupational health -- pre-employment physicals, drivers' physicals, flight physicals, workers' compensation for minor injuries, drug screening, etc -- and advertise that you offer these services. A river of money may run by lawyers, but it doesn't run by physicians. We have only rivulets, but add them up and you will have a mighty stream. 3. Avoid Gaps in the Schedule Due to No-Shows Start with the basics: Have a no-show policy that charges patients either for the first or the second no-show appointment. It may be difficult to collect, but if patients wish to return to the practice, collect it via credit card when booking an appointment. Communicate the no-show policy to patients. Confirm all new patient visits 36 hours prior to the visit. If a patient cancels, that gives the practice time to fill the slot. Develop a cancellation list of patients who want to be seen sooner, and call them for cancellations. Track no-show patient characteristics. Are they emergency department referrals? Follow-ups? Is the no-show rate so high that the group needs to book extra patients to keep gaps from the schedule? Monitor the number of no-shows at baseline, implement changes, and set a goal that reduces the number. Graph your progress, and involve all staff members in meeting this goal. 4. Try to Get Paid on the Basis of RVUs Rather Than Collections, if You're in a Hospital or Large Group Many hospital billing services are really bad. Relative-value units (RVUs) are directly tied to the coding. It's a better measure of patient acuity than collections, and it eliminates contractual discounts. One problem for doctors starting a new job is that they may not get a productivity bonus in the first year if their incentive is based on collections that are measured annually. Because there's typically a 3-month lag before their charges are collected, the extra revenue that they generated through hard work won't show up in the first year. In contrast, they can get a productivity bonus in the first year if they're rewarded for hitting RVU targets, notes Tommy Bohannon, Senior Director of Recruiting and Development Training for Merritt Hawkins & Associates in Dallas, Texas. If a hospital or group includes quality metrics in its payment calculation, that will usually constitute about 10% of compensation. Sometimes a contract will specify that various percentages of the potential productivity bonus be paid to doctors, depending on how well they score on the quality measures. Intangible factors may account for another 10%. Among those factors are patient satisfaction, participating in committees, doing community service or community education, and public speaking, he says. In some cases, physicians who work harder and see more patients can earn more than those who spend a lot of time being good citizens. 5. Make Sure That All Physicians Are Pulling Their Own Weight, and Deal With Those Who Aren't Though a daunting prospect, you must have a frank discussion with the physicians who are dodging a share of the duties, regardless of seniority. "The senior doctor shouldn't carry more weight than the other partners. We should all be even stakeholders who are looking out for the common good of the practice," says Practice Management Expert Judy Capko, of Capko & Company, in Thousand Oaks, California. Advance preparation is essential. "There's a certain baseline cost for carrying a doctor, whether 10 or 20 patients are being seen. You need to gather a lot of data to see what the financial impact of this physician's routine is on the practice," Capko says. Determine what you need an underperforming physician to do; discuss the best way to lay out your position; and present it as a united group. The group spokesman should be someone who this physician greatly respects. Although some practices engage a management consultant as a facilitator, "you have a much better chance of succeeding if a physician expresses the group's viewpoint than if the consultant is given the role of dealing with this. Otherwise, the doctor who feels challenged is just going to attack the consultant. He or she is not going to see that the doctors agree with that consultant unless that's voiced," Capko says. Steer the discussion away from the physician's behavior and focus on the long-term health of the practice. Capko recommends: "You have been the foundation of this practice. We owe you a lot, but this practice -- your practice -- is struggling with some issues, and we need to address these for the future." Then you can delineate your concerns. 6. Get Payment Even if Your Patient's Check Bounces Your practice's financial policy needs to include your policy on bounced checks and what steps the practice will take to recover that payment. If there are bank charges, stipulate that the patient will be charged for those fees. If you're in a state that allows you to collect a processing fee above the bank charges, that needs to be stipulated in the financial policy that a patient signs. For example, in Illinois the value of what can be collected is 3 times the face value of the check plus court costs if litigated. In North Carolina it is the cash amount of the check, bank fees, plus $35 for the handling fees. In Florida, you're only allowed to charge $20 above the check value and bank fees. The National Check Fraud Center lists the bad-check laws for each state. It is helpful to publish or reference the consumer credit laws in your financial policy. These simple steps will keep everyone on the same page and establish the financial component of the medical care relationship. Successful practices will make every method available for patients to pay bills. Cash, checks, postdated checks, credit cards, debit cards, and online services such as PayPal are all viable means for patients to settle their debts. Postdated checks are a good collection tool unless they bounce. Postdated checks are considered "promissory notes" rather than checks unless they are truly held until the date written on the check by the debtor before deposit. Consider using a check-scanning system from a company that guarantees the check if it clears. This will protect the practice as well. The monies are immediately deposited into your practice's bank account without the added burden of a trip to the bank. Almost all of these payment methods have some amount of service fee attached to them. However, the fees paid are a small price to pay for the general practice's cash flow. The smart practice will shop around for the bank with the best small-business service package available or will look to build a hybrid system with a couple of different vendors for the various services needed. No matter how you build your financial recovery process, you're wise to make as many methods available as possible as long as those methods protect the practice. 7. Be Money Smart When You Move to an EHR Take a closer look at application service provider (ASP) technology. ASP technology means that the electronic health record (EHR) program and data are housed securely at a vendor's or an institution's location; you don't need to have expensive servers and tech support in your office if you have high-speed Internet access. The ASP EHR model will range from about $350 to $650 per month, plus training. Billing software will be an additional cost. The other option is buying an EHR that requires an in-house server and software. Systems like this that I reviewed averaged between $40,000 and $60,000 depending on the amount of bells and whistles added. With ASP models, benefit changes and software improvements are continually updated on your site so that your practice is always using the most recent data and advanced software. You don't need proprietary hardware or additional servers. You do not need to house your own server, and many systems have a minimal cost up front. You also will be able to log in from home to view patient data and reports. The downside to ASP technology is that when the Internet is down, so are you. Make sure that you have good, stable Internet service before considering this option. 8. Think About a Professional Services Agreement if You're Considering Employment Professional services agreements (PSAs) have been around for many years but are now growing in popularity. Physicians may view a PSA as a way to get the advantages of employment without selling their practices, and hospitals see it as a mechanism for controlling doctors without employing them directly. "In a PSA, the physicians maintain their own professional corporation," explains Alice Gosfield, a Philadelphia, Pennsylvania, healthcare attorney. "The physicians assign the right to payment to the hospital; the hospital bills for them; and the physicians receive a base salary, usually with productivity bonuses. In more and more PSAs, the physicians also get bonuses that are based on quality metrics." Despite doctors' retention of practice ownership, Gray Tuttle, a practice management consultant in Lansing, Michigan, says that a PSA "is very similar to an employment relationship. The end results financially are close to identical. The difference is that the physicians are employed by a practice that they own. Typically the hospital will employ everybody else including the receptionists, nurses, and technicians. The providers -- physicians and even midlevels -- retain their relationship with the professional corporation." The physicians still own the practice assets including ancillary services, which, notes Tuttle, they lease to the hospital. The hospital must factor revenues from those ancillaries into the amount that it agrees to pay the physicians or the doctors won't sign up, he adds. "Typically the hospitals provide reasonably long guarantees with no pay cuts and, in many cases, enhanced reimbursement," says Tuttle, adding that the guarantees may last up to 5 years for specialists and 3 years for primary care doctors. One reason why PSA reimbursement may be higher than what the doctors previously earned is that the hospital can often negotiate higher rates than most practices could on their own. In addition, some hospitals will pay doctors extra for quality and efficiency. 9. Be Aware of Which Aspects of Prevention Care Are Now Reimbursed The Patient Protection and Affordable Care Act has given physicians new tools to offer patients easier access to preventive care. Starting in January 2012, Medicare will eliminate its Part B deductible and copayments for a host of proven preventive services including bone mass measurement; some cancer screenings; diabetes and cholesterol tests; and flu, pneumonia, and hepatitis B vaccinations -- among other services. Medicare now covers annual wellness visits. It covers smoking cessation counseling. It began paying a 50% rebate for the brand-name medications that seniors need to manage chronic conditions when they reach the coverage gap known as the "doughnut hole." Your patients in new private insurance plans also won't pay out of pocket for many preventive services including screening blood pressure, diabetes, cholesterol, and for certain cancer screenings; counseling to quit smoking or cut alcohol consumption; routine vaccinations; and regular well-baby and well-child visits from birth to 21 years of age. The Centers for Medicare & Medicaid Services is working to make sure that you and your patients have the support that you need to achieve better health. Our investment in prevention takes a big step in that direction. If you or your patients are looking for more detailed information, go to healthcare.gov and click on "Learn About Prevention" at the top.