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finances

Teaching patients about their health insurance shouldn’t be your job–but it is

If you are frustrated by how confused patients can be about their insurance, and by the conflicts this confusion often leads to (especially about patient balances), you have good reason. Insurance is provided by employers, who theoretically should be able to explain it (it's an important part of employee compensation, after all). And it's offered and managed by insurance companies, who set and enforce the terms. There seem to be several good ways, logical ways to get information about insurance rules. So why do many patients misunderstand how it works? A few things are obvious. One is that health insurance can be very complicated. (It is complicated for those of us who work with it every day, even.) And the training and information patients have access to from their employers and insurers is simply not clear or accessible enough for many patients and many situations. This gap shouldn't be your problem. But it ultimately becomes your problem, since you'll have to deal with patients' confusion and corresponding reluctance to pay. All of which is a long way of saying that helping patients understand how their insurance works may not be something you should have to do, but it is something you're better off doing. And the earlier in the relationship you start the education process, the better. The clearer patients are on their financial responsibility before they receive care, the less likely they will be surprised by a large balance they didn't expect to owe. There is an old saw in marketing about how you have to repeat a message seven to ten times before anyone really absorbs it. The seven to ten is not regarded as a scientific analysis by anyone. But the idea that you have to repeat things, usually more often than you expect, and ideally via different media, is well accepted. (There's a reason you see and hear advertising by the same companies in different places and via different channels.) To this end, we often suggest to medical practices that they have some explanatory material at the front desk that covers common insurance issues--things like what

By |2022-01-01T22:51:44-08:00September 3rd, 2019|
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Cost-cutting: pick your battles wisely

We recently worked with a smart, energetic practice administrator who was very motivated to improve his practice’s bottom line. He’d already found significant savings by switching billing and phone services (even getting better billing results, to boot). Spurred on by those successes, he’d turned his attention to clinic staffing. While the physicians in his practice mostly used conventional medical assistants (MA) for support, a few of the doctors and non-physician providers (NPPs) had opted to use “scribe assistants.” These hybrid staff help clinicians by both scribing during the visit and handling typical MA tasks like test orders and scheduling follow-up care. Because of the extra duties, and because they were hired through an agency, their hourly cost was a bit higher than for the MAs – a 15-20% differential that caught the administrator’s attention. The administrator estimated the hourly cost of hiring a new MA would be about $20, including taxes and benefits. The scribe assistants, meanwhile, cost the practice about $24 per hour. The scribes did some tasks the MAs weren’t trained or expected to do – notably, scribing. But the administrator believed that at least one of the NPPs who was currently using a scribe assistant could do just fine with an MA (she was a recent grad and tech enthusiast). So the administrator decided to suggest gradually switching some of the contracted scribes with employed MAs – and was surprised that his idea met with resistance. (After all, 18% would be a significant cost savings – yet even some of the partners resisted the idea!) As the administrator repeated his idea at a few monthly meetings in a row, the resistance grew into a testier conflict. Was the conflict a sign the administrator was wrong to bring up the idea of saving money on clinical staff? We wouldn’t say “wrong” per se – but we might have not have prioritized this particular cost-saving avenue. It’s natural for clinicians to be wary of any changes to clinic staffing. Clinical support staff is essential to physicians’ productivity. Anything that disrupts clinic flow can make it harder for physicians to

By |2022-01-01T22:51:45-08:00October 15th, 2018|
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Responding to external trends that threaten practice profitability

When we work with physicians and managers who've found their financial results have inexplicably declined, they often wonder why the profit numbers changed when the practice is still managed in the same careful way as before. It's a puzzle and a disappointment and a huge source of frustration! But therein lies the rub: As managers, our job is often to respond to changes that happen outside our business. Doing things the same way, even when executing perfectly, is often not enough to assure good results. Things are happening in the broader market that affect our patients and their behavior. It's our job to recognize when trends that have nothing to do with medicine still require a response from our industry. One really powerful example of a completely external trend that is nonetheless affecting every practice business is the rapid adoption of online payments by consumers. If your practice hasn't responded to this trend, it's probably already affecting your collections negatively. The shift in payment behavior by consumers has been dramatic. I created the chart to the left using USPS data showing that single-piece stamped mail has declined more than 50% in the past decade. The Post Office attributes this decline to shifting consumer preferences, especially for bill payment. The days when it was normal behavior for consumers to sit down once a month and review paper statements, write stacks of checks, stuff the checks in return envelopes, then stamp the envelopes and drop them into the mail are rapidly disappearing. Patients' strong preference for paying electronically is both an opportunity and a threat to your practice business. Give patients an easy way to pay online -- better yet, give them electronic statements, too -- and you'll get paid faster, with less labor required, and reduced paper and postage costs, all while making patients happier. Now that's some serious upside! But if you don't make online payments possible, you're also risking getting paid more slowly, with higher collection costs. That's because it's not just a matter of patients preferring to pay online. They're organizing their budgets and managing their money in

By |2022-01-01T22:51:46-08:00July 21st, 2018|
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You can’t cut your way to growth [practice management tip: financial management]

Practice management literature often offers advice about cutting expenses – advice that promises cost-cuts improve margins and “directly boost the bottom line.” Many physician owners and practice managers seem to have internalized the idea, so they’re always on the lookout for things to trim. But is this the best way to strengthen your practice business? Some expenses do nothing to improve your practice. Paying more for identical supplies or credit card processing, for example, won’t serve patients better or boost efficiency. Once you start routinely cutting staff, technology, marketing, or materials, though, the risk of undermining productivity or the patient experience increases. It can creep in so slowly, you might not notice until profitability turns sharply south – when it can be much harder to turn things around. For example, if you’re busy, it may seem like you can “get by” without marketing. But today’s new patients probably reflect marketing efforts started months or even years ago. Cut marketing and you may see little difference – at first. By the time you notice a slowdown, you may be facing a year or more of significant investing before your volume returns. Staffing is another common focus of penny-pinching. Even a little bit of staff downtime can seem wasteful. Trying to trim staff so that employees are busy 100% of the time risks bigger problems, however. Without a bit of “excess” capacity, the impact of disruptions like employee resignations, sick time, or unexpected increases in demand can be much more expensive than the cost of a few “extra” employees. What’s more, too little support also undermines physician productivity, which has a much bigger impact on profit. Global consultants McKinsey & Company published an excellent study showing how continuous efforts to improve margins – rather than build the business – can actually undermine profitability after a few years. Their advice: consider whether expense cuts you’re contemplating will negatively impact customers (patients), your ability to compete with other practices, or both. If you’ve been focusing on expense cuts for a while, you could be in the danger zone. Be sure to give building the

By |2022-01-01T22:51:46-08:00July 6th, 2018|
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Cutting long-term staff to improve profitability? Not so fast [practice management tip: human resources]

A practice we worked with recently was struggling to improve profitability. The practice’s new manager wanted to make an impact fast, so she decided to try replacing longer-term staff with less expensive newbies; since staffing was such a big practice expense, she reasoned that this was the best way to improve profitability. The physician owners were surprised not just that the strategy hadn’t worked, but that we questioned the decision. “Isn’t that the kind of thing you practice management consultants recommend?" they asked. But cutting experienced staff members who perform well just to save a few dollars isn’t something we’d recommend trying. Those exiting employees will take with them all the knowledge they’ve accumulated – knowledge that is easily taken for granted. While cuts might boost profits temporarily, it likely won't take long for patient service to deteriorate. Service will also be undermined by the panic felt by the rest of the staff. When employees see their most loyal colleagues being shown the door, they’ll wonder if – or when – the axe will swing their way. Once those doubts creep in, your most energetic and ambitious employees will begin job-hunting in earnest. Swapping out older workers for younger ones may draw a charge of age discrimination as well. Worst of all: the potential upside is probably small. Differences in pay for experienced versus new staff are typically large enough to cause a big swing in profitability. For example, a $5 per hour difference translates to $10,000 per year. The costs of recruiting and on-boarding a replacement could easily exceed these small savings. It’s natural to look critically at expenses when profitability is flagging. But insufficient revenue is often the main reason profits disappoint – and cutting your best people will severely impact your ability to fix that problem. Instead of cutting valued but ‘expensive’ employees, look for ways to refocus staff and make the practice more productive.

By |2022-01-01T22:51:46-08:00June 1st, 2018|
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Don’t confuse personal finance and business finance [practice management tip: financial management]

When presented with ideas to update your medical practice’s technology, better support your clinicians, or market your practice in a new way, is your go-to reaction “we don’t need that” or “we’re doing fine without it”? Is your financial management approach simply to always minimize expenses? (Perhaps because you remember the old maxim of taking care of the pennies and the dollars will take care of themselves – or, its more modern cousin, “the latte factor”?) If you’re thinking about business spending in the same frugal way personal finance experts recommend you run your household, you may be missing out on opportunities to grow and increase your profits. Keep it up long enough and you may jeopardize your practice’s future profitability. The good advice to skip a few lattes and pocket the money simply doesn’t correspond to many business expenses. While a latte is a fleeting pleasure, upgrading practice technology is an investment that can increase productivity for months or years to come. Similarly, keeping headcount at the number needed to “get by” may mean your physicians, NPs, and PAs will be less productive – an opportunity cost that quickly outpaces the “savings” from bare-bones staffing. Just because a business investment requires a decision doesn’t mean it is analogous to that forgone latte that puts money in the bank. Not pursuing an investment may actually cost more in terms of lost revenue and profit. Over time, under-investing in productivity tools, visibility for your practice, and modern, convenient patient service can make it harder to attract patients and retain staff. Rebuilding from that sort of decline can end up being much more difficult and costly than investing in keeping your practice up-to-date and well-staffed would have been. Before rejecting investments in your practice’s infrastructure, marketing, and staffing out of habit, be sure you’ve considered whether the upside you’ll pass up is greater than the savings.

By |2022-01-01T22:51:47-08:00April 17th, 2018|
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Maintaining medical practice cash flow in Q1

As we've posted here before, almost all practices face the risk of a cash flow crunch in January and, really, through all of Q1, thanks to the deductible reset.  (January's revenue collections are sometimes also hit lower volume in December because of the holidays -- a double whammy.) In our experience, the decline in revenue can be anywhere from 10-20% for primary care practices (pediatrics and family medicine typically get a little 'help' maintaining Q1 volume from winter viruses) to more precipitous drops for surgical specialties (especially when there's little downside to patients for delaying surgery). The most important step practices can take to cope with the drop-off is to plan -- now that it's February, well, it's a little late for planning for Q12015, but if you're suffering from shrunken revenues that you didn't expect, mark your calendar now to start planning for Q1 of 2016 at the end of this summer.  With enough notice you can plan to set aside cash reserves so that you don't need to tap lines of credit, cut expenses or delay needed purchases when the squeeze hits.  You can also make sure you're ready to take advantage of the upside of the deductible reset: patients will be anxious to schedule procedures in Q4, after they've met (or come close to meeting) their deductible.  Alert staff that vacation time will be limited in the fall quarter -- perhaps even offer staff extra time off in January.  And, above all, start marketing procedures and mining your EHR for patients who may have wanted and needed a procedure, but put it off for financial reasons. Even though we're now in the thick of crunch time, there are still a few steps you can take to nudge the cash flow back up. If your practice's bread and butter is high-fee procedures,  look into financing options and review your financial policies.  If you're able to offer payment plans, that can take the sting out of patient responsibility payments.  Technology solutions that can help you offer payment plans that comply with HIPAA and other security requirements are more readily

By |2022-01-01T22:52:01-08:00February 10th, 2015|
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Physicians: useful leadership article about biases from Fast Company

If you've visited here before, you might have seen some of my posts about the challenges physicians face in managing their practices.  In most medical practices, the physician-owners are also very busy health care providers whose business management time is quite constrained.  This makes it that much more difficult to know what's really happening on the business side of the practice and to make good decisions about business operations.  This lack of information may make physicians more susceptible to management biases. This helpful leadership article from Fast Company spotlights eight of the most common management biases that can lead to less informed decisions. In our consulting work, we sometimes see the impact of these biases on business management and especially planning and investing by physicians for their practices. For example, confirmation bias -- the tendency to value more heavily opinions and information that support what we already believe -- can be a greater risk for physicians who don't have the time (and often the inclination) to dig into business data.  Reports that suggest all is well can appear more relevant than "anomalous" financial data that indicates problems. Another common bias, the sunk cost fallacy, may be unfamiliar to those who've never studied economics -- but, once you understand it, it's a powerful way to make better investment decisions (whether you're investing time, money, staff time, or any other resource). The Fast Company piece is a fun, fast read, with a useful nuggets to thing about -- click here to check it out.

By |2014-12-14T09:58:35-08:00January 29th, 2015|
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You’re only one bad login away from trouble

Physicians and practice managers love using online tools to help run their practices. Whether you’re submitting payroll, doing some online banking, reconciling a credit card statement or confirming patient eligibility you’re using a connected network of devices, any of which could pose a serious threat to the well-being of your practice. While I’ve blogged here on the importance of strong and regularly changed passwords, it’s every bit as critical to be disciplined and conservative with respect to connecting to Wi-Fi networks. Every time you venture out to a hotel, conference or café you’re likely seeing a variety of Wi-Fi networks with nothing to identify them other than a short name. Should you connect to “Starbucks-FREE” Wi-Fi? The following link describes just how simple it is for a hacker to set up a simple network with the goal of stealing the passwords and data of people just like me and you. The straightforward best policy is to never connect to an unknown network (and it’s hard to “know” a network if you’re away from home and work!). For this reason, I strongly recommend using the “share internet” feature of many smartphones – typically there is a monthly cost, perhaps $15 for access, and data usage counts against your monthly phone allowance. Click here to learn just how one hacker gains control over computers like yours.

By |2022-01-01T22:52:03-08:00October 30th, 2014|
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The ACA grace period’s perverse payer incentive, and why hospitals would like to pay some patient premiums

Health Affairs has a nice analysis of the ACA's 90-day grace period on cancellation of enrollment for subsidized patients who miss premium payments.  But one piece of the puzzle that their article doesn't touch on is the perverse incentive for health plans not to vigorously pursue those missed premiums. Under the grace period, plans are required to reimburse providers for services rendered in the first month that the patient misses a premium payment, but not in the second and third months.  However, the services a patient might need in months two and three could -- perhaps even most-likely would* -- greatly exceed the value of the premiums missed.  This is why some hospitals, and now even some physicians, have started investigating whether they can pay these premiums on behalf of patients; they realize that they could be denied thousands in payments owed to them because of a patient's failure to pay a much smaller amount.  And this is why health plans would undoubtedly prefer that those patients not pay their premiums -- and are unlikely to make any special efforts to collect them. The idea of providers paying these premiums to protect their own position has analogs in other markets. For example, a bank might pay off a mortgagor's tax lien to avoid losing the entire value of the property if the government forecloses.  But in our world, it's not clear if other regulations that touch upon payment relationships could hold against providers who try to pay off patient premium obligations.  Health Affairs notes that CMS has already made a public statement discouraging such efforts. While the AMA, MGMA and others continue to urge reform of the grace period provision, it's reasonable to assume that payers will continue to argue that the related laws actually prevent providers from stepping in to pay premiums, and that the grace period rule should remain unchanged.  (And, presumably, they'd argue against another solution, such as deducting the value of missed premiums from provider reimbursements.) The bottom line is, the grace period seems unlikely to disappear any time soon.  It remains very important that physicians,

By |2014-10-26T14:09:05-08:00October 27th, 2014|
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“We are not a bank” — Lessons from CNBC’s “The Profit”

I just got around to watching the episode of  The Profit focused on A.Stein Meats. Now, you may be wondering why on earth I'd be posting about a meat business here -- what could that have to do with medical practice management?  Well, The Profit deals with a variety of small businesses, and there are often take-aways that apply to almost any business, but the A.Stein Meats episode really hit some notes that are so important for managing the business side of a physician practice -- especially the under-appreciated perils of poor management of accounts receivable. When Marcus Lemonis arrives at A.Stein Meats, he learns that the 75-year-old company is losing $400,000 per year -- despite $50MM in annual revenue.  He's initially confused about how the company's expenses could be exceeding their revenues.  But he soon figures out that the biggest missing piece lies in the back office: accounts receivable.  The office manager -- who nominated the business for the show -- reveals that the receivables are more than $4MM.  And Lemonis quickly notes, many are so old, they'll likely never be collected.  The owners, meanwhile, seem almost unaware of why they should be concerned about accumulating A/R -- after all, they're just trying to "work with" customers, many of whom are "friends." But, as the old saying goes, with friends like that, who needs enemies? The business's inattention to collecting the money they're owed was putting their solvency at risk; revenue is almost irrelevant if it isn't realized as cash coming into the business promptly.  Moreover, the business was essentially financing its customers -- without getting paid to do so.  Lemonis stated clearly, "we are not a bank" -- the same message we give our medical practice clients when they're too quick to say, "sure, we'll bill you" instead of asking patients for a credit card at the time of service, or a credit card on-file for procedures that need to be paid for over time. Medical practices are perhaps a bit luckier than a business like A.Stein Meats in that insurance payments still usually provide the biggest portion

By |2022-01-01T22:52:08-08:00March 31st, 2014|
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The cost of poor decision-making

We were recently called into a group practice where the physician owners of Struggles Medical Group were disillusioned with the practice of medicine. Their concerns were typical, shrinking reimbursement, dismal profits and the threat of new competition, as a large urban academic faculty practice was beginning to penetrate this suburban community.  Sound familiar?  This is happening around the country as a response (or reaction) to healthcare reform, where larger healthcare organizations see new opportunities to get a bigger piece of the revenue pie.  Struggles timing was perfect for bringing this consulting team in and here’s why. We performed a detailed practice assessment, examining the implications of past decisions and analyzing the current state of Struggles Medical Group in primary areas of performance including practice structure, finances, human resources, billing, clinic operations and work flow and marketing.  One physician owned this practice and the other physicians and providers were employed.  We soon discovered the physician owner had a history of making bad decisions. They did not analyze return on investment (ROI) before making investment decisions that would impact the practice operations, finances and possibly patient care. A perfect example of Struggles poor decision-making was buying very costly diagnostic equipment that they were unable to use because payers were contracted with a lab to provide these services.  This meant the investment was rendered useless to the practice. Besides this, with new models on the market every six month,s there was no way to attract another buyer for the equipment.  There were other equally disastrous investments Struggles made over the past two years. The most recent strategic error was changing the direction of the entire practice.  In their quest for new revenue opportunities the practice decided to focus on expanding its service to workers compensation patients.  Attracted solely by somewhat higher gross reimbursement rates, they went ahead with this in this in 2013 without thinking of the implications with would have on staff, workflow and profit.  This was a costly error. Workers compensation is a practice model that is significantly different from other payers and requires specific expertise in report writing and tremendous

By |2022-01-01T22:52:10-08:00January 10th, 2014|
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An embezzling story to learn from

A marketing director for Castle & Cooke, a mortgage firm, is believed to have stolen almost $200K from her employer in less than a year of employment -- until she was caught and charged with fraud. While the case does not involve a medical practice or healthcare organization, it does offer some reminders about protecting a small office from internal theft. The employee allegedly ran up large false expense reimbursements and forged company checks -- both possible in any small business with inadequate controls, including medical practices. Practices can learn from this incident.  Check stock should be protected, and managed by a physician owner.  No one should be allowed to sign checks except a physician owner -- no signature stamps!  And owners should reconcile the bank statement monthly, so that any unauthorized checks could be spotted. Unauthorized expense reimbursements or charges are common routes to embezzlement in medical practices.  Be cautious about allowing employees -- even a manager -- unsupervised control of a credit card or an expense account with a vendor.  Review purchases "for the office" carefully -- make sure that everything on the Costco or Amazon bill can be accounted for in the office. Remember, not allowing temptation is the best way to prevent embezzlement -- and the best way to maintain a relaxed, family like atmosphere in your office, because you have less need to be suspicious of anyone.  Internal controls are a gift to your practice -- they protect against profitability loss while also helping to support trust and morale.

By |2022-01-01T22:52:12-08:00December 3rd, 2013|
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Could the ACA-mandated grace period be problematic for your practice?

Many practices already suffer losses from surprise payment retractions by health plans.  These can occur when patients attempt to exploit system update lags after leaving their employer (and therefore the employer's plan) or the grace period after failing to maintain payments on their own policy.  (So, the patient knows he's not paid his premium or that he's left the employer plan, but also knows he's still "covered" because of payment grace period or because of the 30-day window to elect COBRA coverage -- even though the coverage will eventually be retroactively cancelled to the last paid day.) Any retraction of payment for services already rendered is a blow for providers and their practices, but most state policies regarding timely payment of claims and premium grace periods help limit the exposure for retraction of reimbursement to 30-45 days. However, the Affordable Care Act (ACA) contains a provision that mandates a much longer grace period -- 90 days -- for subsidized plan participants.  The ACA authors intended that plan members who receive subsidies be allowed more leeway for missing payments because of lower incomes and possible hardship -- but, the longer grace period also creates opportunity for abuse and financial exposure for practices. Hospital and physician groups made note in the ACA comment period of the potential for the grace period to result in uncovered services being rendered.  Extending the grace period increases the likelihood that significant services can be provided before a plan can be cancelled for unpaid premiums.  Providers argued that plans should have to bear these costs -- especially in the case of subsidized membership, since plans would presumably be receiving at least part of the premium cost from the government.  However, in the final rule, the CMS allowed plans to deny claims in months two and three of the grace period.  This means that payments already issued to providers could be retracted -- leaving practices and hospitals on the hook for the cost of care already provided. How can practices prepare for and protect themselves from these unexpected costs?  A few things to evaluate: Has your state negotiated

By |2013-11-09T18:08:14-08:00November 11th, 2013|
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New study about workplace theft; are your internal controls in order?

A new study from the Rotman School of Management in Toronto about workplace theft and cheating may have important implications for medical practices. The study found that deprivation effects -- such as being harmed by the recent recession, or by new public policies -- reduce employees' commitment to ethical behavior.  Prior to feeling deprived, people tend to believe they'll maintain their moral standards regardless of circumstances; however, when put to the test of reduced financial well-being -- especially compared against peers -- the study found that people may relax their standards, especially when they believe their change in position is unfair. This is a helpful reminder to practices to make sure internal controls are in place, to reduce temptation.  The recession (ongoing in some markets), deep resentment of the ACA among some staff, and the added workload from new regulations all may contribute to employees feeling disadvantaged versus peers outside of medicine, or even versus patients.  (Some employees may also feel sympathy for patients whose health plans will carry more patient responsibility payments in the coming year, too -- perhaps resulting in losses from co-pay waiving and the like.) Internal controls are the kindest way to protect your practice against internal theft.  By setting up procedures and structures that reduce temptation and make theft more difficult, you reduce the need to be suspicious or personally monitor employees -- and allow your practice the freedom to cultivate the family-like atmosphere that so many of us want.  If your internal controls need a review, please don't hesitate to get in touch.

By |2022-01-01T22:52:14-08:00October 17th, 2013|
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A taste of MBA training for doctors — without the hassle and cost

If you follow this space, you may already know that I'm dubious about the value to physicians of stopping out for an MBA.  As an MBA-holder myself, I think the coursework can be overkill for independent physicians who just want to run their practices better (this is less the case for those that intend on corporate careers, of course). So much of modern MBA training focuses on things that aren't generally relevant to the small/medium business owner (and, therefore, the typical private practice physician partner).  Even worse, some of the business basics that doctors need most usually aren't well covered by MBA programs -- managing people; the minutia of local, state and federal regulations; the marketing of a small, local business; real estate finance; negotiations, etc. The other issue facing physicians (and sometimes practice managers, too) is the opportunity cost -- and actual cost.  The opportunity cost is the income lost by taking time off from practicing/working to attend an MBA program, and the actual cost is the (often very high) tuition at business schools.  For many, perhaps most, private practice owners and managers, it just may not 'pencil out' to take the time and invest the money*. One solution that can work well as a substitute is taking local classes (e.g., nights and weekends) that focus just on what you really need and want to learn.  This can be a reasonable approach -- and even a trial to see if further investment in MBA education is of interest.  But, there is also the issue of having to attend class at set times -- not always convenient ones. Now, though, there is a better alternative: MOOCs, massively open online courses.  Incredibly, some of the most prestigious business programs in the country, including Stanford, Wharton and Columbia, are making some of their most valuable content available through the free platforms like Coursera and EdX.  And it's not only self-directed -- i.e., you take the classes at your convenience -- it's FREE!  (Yes, unbelievable.) Lest you think this is just throw-away content, Business Insider has kindly assembled a list of some of

By |2022-01-01T22:52:14-08:00October 16th, 2013|
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Does your smartphone pose risks to your practice?

Let's take a few moments to consider what risks you may be carrying around with your phone.  One common vulnerability is stored passwords on your phone, e.g. within a “notes” program.  Imagine the harm that could come of a thief having access to your banking accounts or practice management software.  Your firm could suffer an immediate financial hit, malicious mischief or a potentially devastating breach of patient data. The start of such grief can be your unattended phone meeting with a disgruntled employee or dissatisfied patient. These risks mean that phone security justifies your consideration. Phone security starts with maintaining disciplined control over the physical device. Naturally, your phone should not be left untended in your office, on a shared counter-top or anywhere else where it might be easily stolen.  While it seems obvious, it’s very common to see busy administrators leaving their phones behind as they scurry about the office.  Luckily, most phones have security features that can significantly mitigate your risk – although many of these features are not enabled by default.  In many phones, a four-number passcode can be readily “cracked” by a thief. Better is a quality passcode (avoid common English words) that uses letters and numbers – with iPhones this can be changed under settings/general/passcode lock.  Keep you phone’s software updated, as security vulnerabilities are fixed as they are discovered. If you use an iPhone, make sure you have the application Find My iPhone installed (and updated) and enabled. iOS 7, the latest iPhone operating system, security has been greatly improved – potentially making your phone valueless to a thief, but you must first have an Apple ID (and remember it!). Phones using Android 2.2 or greater have a built-in application that can help locate or your phone and/or completely delete the contents of your phone and any installed memory (SD) cards.  You’ll need to make sure these features are enabled on your phone (settings/security/device administrators). Regardless of what device you use, be careful when accessing sensitive information when you’re out and about as your phone may connect to an insecure Wi-Fi connection, allowing others

By |2013-10-21T16:13:04-08:00October 9th, 2013|
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ICD-10: The only thing to fear is fear itself

Did any of you catch the ICD-10 TweetChat Kareo hosted on Tuesday?  I participated representing our team(@capkoandcompany); three other panelists from different segments of the medical management world joined in as well (@brad_justus, @modmed_EMA, @hitconsultant).  Kareo does a wonderful job reaching out to its clients and the entire practice management community with events like these -- and we were delighted to have the opportunity to participate!  (Kareo published a summary on its blog -- and you can also search all the tweets using #kareochat .) As expected, there were many smart, informed comments -- and some really good questions by the Kareo folks in particular.  But, I was struck by the relative silence from people who weren't from the billing/practice management/technology expert community (i.e., from actual billers, coders and practice managers) -- especially because one of the themes that emerged from our chat was the sense that small and medium private practices (in particular) have been holding off dealing with ICD-10.  Did the audience that could benefit the most shy away from the chat altogether? The drumbeat of journalists, bloggers and other experts about the need to deal with ICD-10 NOW (or face likely disaster!!) has gotten louder and louder in recent months, and I sometimes wonder if it sometimes has some negative unintended consequences. In our zest to create helpful urgency (and dispel the dream that ICD-10 will be delayed again), are we pushing people towards fear-induced denial and procrastination? Seemingly every week, we work with medical practices that have not begun to prepare for ICD-10 at all -- and they're scared.  But while their foot-dragging has not been ideal by any means, it's also not a guarantee of disaster.   Converting to ICD-10 is not going to be easy, but it's also not something that's beyond the reach of any practice to manage -- especially because so much help will be available from vendors and payers (provided you ask!). It seems from our vantage point that too many practice administrators, billers and coders have already decided -- without even really getting started -- that ICD-1o will be an unavoidable

By |2022-01-01T22:52:16-08:00September 13th, 2013|
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Still not collecting at time of service? New AMA data shows what it can cost your practice

The AMA's National Health Insurer Report Card (NHIRC) for 2013 was released today.  In addition to illuminating data comparing the burdens/benefits of doing business with eight major US health plans, the report added a new metric that caught our attention: patient responsibility as percentage of allowed amount.  Among the eight major insurers studied, patient responsibility was more than 20% of the allowed amount for all but one.  Even Medicare now comes in at about 25% -- as shown on the NHIRC chart below: If you needed another reminder that your collections process is critical to your practice's profitability -- and getting more so every year -- here it is!  Patient responsibility payments are here to stay.  If your revenue cycle management processes don't include effective time-of-service collections, now's the time for improvement.  (And if you don't know where to start, we can help -- contact us for more information about consulting services.)  

By |2022-01-01T22:52:31-08:00June 19th, 2013|
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Will 2013 be better than 2012? It’s up to you!

A new year has already begun! If you are hoping for significant year-over-year improvement you need to act – and sooner rather than later.  Here’s how great practices help ensure that each year is better than the last. Examine past performance.  Consider what data points are important to review.   As a guide, great practices will compare their performance against at least these benchmarks every year: Total revenue per full time equivalent (FTE) physician Total operating expense as a percentage of total medical revenue Total visits/procedures per FTE physician Percentage of total A/R aged 120 days more Bad debt due to fee for service activity per FTE physician Determine what the numbers mean to you.  Compare your performance between 2012  and 2011 to evaluate your year-over-year performance. Are you clearly performing better or worse?  Then assess why there is a difference.  If you did better was it because you were more assertive? Dit you have clearer established goals to guide you?  Perhaps changes in performance can be traced to changes in staff or actions taken to improve contract reimbursement? Did you implement a marketing plan or are differences between years merely chance variation?   If there was no change in 2012 or you did worse, you will want to take decisive action to make 2013 a better year. Plan for 2013.  Of course, given the challenging business environment, leaders of improving practices make planning a priority.  I recommend a strategic planning session be scheduled well in advance. Scheduling an off site meeting in early February can minimize interruptions.  If you have a skilled communication facilitator on your staff, and your practice isn't facing especially serious challenges, your practice might conduct your meeting without an outside consultant. On the other hand, a consultant can increase the value of strategic planning sessions by facilitating communications on difficult topics, providing an objective overview of your practice’s performance, helping you understand your position in the marketplace, and assisting leadership in determining goals for the upcoming year. Practice leaders it is not too early to think about the steps you can take to protect and guide the practice’s

By |2022-01-01T22:52:36-08:00January 16th, 2013|
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13 for 2013 Tip #3: Cash management quick-check

Do you accept cash payments at your practice? The start of a new year is a great time to review how your practice handles cash -- to determine if your internal controls could use some tightening up. With cash, the biggest temptation is to handle these "small" amounts more casually than other payments.  When cash payments are rare -- a $30 co-pay here, a $25 co-pay there -- it can seem that they're less important to the bottom line.  But, over the course of a year, even a single $30 cash payment per day amounts to close to $8,000!  Keeping tabs on those "unimportant" cash payments is actually very important, indeed. The biggest pitfall: mixing cash receipts with petty cash.  This all but ensures these amounts won't be deposited and may not be properly tracked.  Petty cash should never be more than about $50 or so -- just enough to handle small payment amounts for the office that cannot be handled by credit card or check.  Allowing petty cash to grow creates a temptation for misuse -- or worse, theft. Cash should be deposited regularly -- ideally, every day -- for security and for effective tracking for practice evaluation and tax reporting.  Receipt stock should be monitored, and the cash received should be reconciled against the day's postings by some at the practice who doesn't collect it and post it to the billing system (in smaller practices, this might need to be the physician/owner).

By |2022-01-01T22:52:36-08:00January 10th, 2013|
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Hotel Hôpital

What if hotel billing were like medical billing? A funny-but-sad video by Costs of Care in partnership with Harvard Medical School and the University of Chicago explores the possibility in a tongue-in-cheek way (click "continue reading" to view the video). "Surprise" medical costs do more than just frustrate patients -- they hurt practices, too.  By helping patients understand the costs of their care, practices can help patients make more informed decisions, plan better, and maintain a positive relationship with the practice.  And, patients who are better informed and understand what they'll be charged are more likely to pay their bills.

By |2022-01-01T22:52:40-08:00March 25th, 2012|
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Inspiration from small businesses

I recently completed a series of articles for Kareo's Getting Paid blog about how small business management issues relate to practice management.  While medical practices have an important mission that reaches beyond business, they can't achieve that mission without succeeding on business terms.  And, in many fundamental ways, medical practices are not so different from other kinds of small businesses.  There's a lot to be learned from examining the success factors that apply to seemingly-unrelated businesses.  Plus, it's kind of interesting and fun to think about other businesses in the 'real world' and how they deal with their challenges -- almost like looking at your own organization through a different lens. If you're interested in checking out the Small Business Lessons for Physician Practices series, here are the links: Small Business Lessons for Practices: Human Resources Getting Started with Marketing Financial Basics Operations Management for Physician Practices

By |2022-01-01T22:52:40-08:00January 9th, 2012|
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Prevent and uncover embezzlement: webinar

Joe and Judy's recent webinar (sponsored by Kareo) was a big hit! If you didn't have a chance to attend 'live,' you can register and view it here: Embezzlment-proof your practice Most medical practices are victims of embezzlement at some point -- yes, you read that right! -- so if you haven't already learned how employees can become thieves and employers become marks, this is a must-watch webinar.

By |2011-11-18T11:27:10-08:00November 18th, 2011|
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Why aren’t more physicians wealthy?

Michael Zhuang, an investment advisor with a focus on physicians, offered an interesting point of view in a recent post on Physicians Practice.  He observed that doctors often fail to accumulate significant wealth in large part because they place too much emphasis on living a "doctor-appropriate" (i.e., fancy) lifestyle, they're so busy they don't have much time to focus on finances, and they tend to believe they can "do it all themselves."  His recommendations include living within (or below) your means, dedicating time to financial planning, hiring a qualified financial advisor (he promises to provide some tips for doing so in his follow-up post) and focusing on what you do best (i.e., delegating non-revenue activities). We have a few things to add to his list, based on our work with small- and medium-sized practices: Fund your retirement first. Employee physicians usually have 401(k) plans so they can start the habit of "paying yourself first" for retirement.  Practice owners are often challenged to develop these habits, first because their early years of investing in their practices may not permit much savings, and then because any retirement plan would require a bit of effort on their part to research and establish.  Once you're earning income from your practice, don't let inertia prevent you from setting up an SEP (or other qualified plan), and funding it on a regular basis -- think of it as a regular bill that must be paid. Save your savings. Implemented a process improvement that increased profitability? (Say, for example, something you learned by engaging consultants for a practice review, or CPAs for a financial audit.) Much like salaried employees are advised to put their raises into savings automatically (so they don't adjust to the higher take-home pay by spending more), doctors can turn gains from improving their practices into investments for the future.  (If your practice needs the funds reinvested for growth -- say, into marketing or an EHR -- then those needs might come first.  The point is just to avoid the pitfall of spending at a higher level if your income moves up a stable

By |2022-01-01T22:52:42-08:00August 29th, 2011|
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Get a clear picture of practice performance: Part 2

Our last post talked about some of the key performance indicators a practice can examine to understand how well it is performing.  Now we will dig a  little deeper and look at other indicators that identify if a practice is above the norm and meeting the expectations the team has set. Managing referrals and the revenue cycle It is important to monitor and compare these additional performance indicators between each physician in the practice from year to year: Top ten CPT codes by utilization: Determines the high demand services and variables between physicians. This report can also be used to track payer reimbursement trends for these top revenue sources. Number of new patient and established patient visits: Monitors practice growth or decline. Referral trends: Tells you who are referring, who is not and how this is changing over time. This is also a good way to evaluate referral management and marketing efforts. Accounts receivable and days in A/R, DAR reveals how well you are doing at bringing in the money. Aged accounts receivable 90 days or more: An important indicator for monitoring internal billing and collection performance. Ideally ,this will be less that 15% of the total A/R. Outstanding claims: If there are variants between physicians there could be contracting issues or differences in physician coding (CPT and ICD) and reporting patterns. The old saying “you cannot manage what you fail to measure” is true. When armed with this data the practice will be able to better understand its position and know what corrective actions and changes need to be made. If this post brings a question to your mind that remains unanswered, contact us  by following this link: www.capko.com.  We are on your side!

By |2022-01-01T22:52:55-08:00June 13th, 2011|
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Get a clear picture of practice performance: Part 1

To begin your quest to understand  how well the practice is performing is to  compare last year’s financial performance to the prior year, examine shifting trends and identify the reasons these shifts are occurring.  For example, are you doing less of a particular procedure and, if so, is there a reasonable explanation – or if one physician’s production took a dip was it due to more scheduled time out of the office or is it an abnormality that needs to be addressed. Perhaps one urologist’s aged receivable has spiked because of a payer contracting issue. Identifying these types of issues is a good start to managing finances better.  It is also important to compare performance to your peers by obtaining the Medical Group Management Associations Cost Survey (if it includes your specialty), www.mgma.com and The annual Joint Statistics Report from the Society of Healthcare Business Consultants, www.nschbc.com. In a group practice it is important to look at the group as a whole, as well as the some specific numbers and benchmarks for each physician. Examine group performance based on the per physician averages to evaluate and manage income and expense trends and staff levels.  For example, how does the practice compares to the average practice in your specialty around the country? • Number of full-time equivalent staff • Gross charges • Percentage of contract adjustments • Gross revenue, expenses and net profit • Operating expenses as a percentage of gross revenue If you simply want to know # of FTE (full time equivalent staff) and percentage of operating expenses against revenue let me know: Go to www.capko.com Capko & Company your source for practice improvement

By |2011-06-08T13:22:21-08:00June 8th, 2011|
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Where Accounts Receivable Headaches Begin

Collection problems don't begin with a rejected insurance claim or a patient's failure to make prompt payment.  The headache of managing the accounts receivable starts with  the patient registration form - data collection. It' s the  receptionists and schedulers failure to  gather sufficient  and accurate financial data when patients first contact the office. Why does this occur?  It happens because we fail to train the receptionists and schedulers on billing matters. They need to view the patient registration form and the insurance cards as financial documents - much like a credit application.   Spend more time on the upfront training with these staff members and educate them about the consequences of poor data collection: rejected claims, delayed payments and an inability to collect the patient's portion of the bill after the fact.  Set up accountability standards for data collection. Establish a reporting mechanism that tracks the reason for rejected claims.  Start looking over this information to identify the most common errors that cause claims to be rejected.  Then train staff  on better data collection techniques to overcome these problems and show them their progress each month.   The staff of good intentions. In reality the scheduling and reception staff have good intentions, but if you don't train them and help them understand the details essential to collecting accurate demographic and insurance data, then you are a part of the problem.   Help staff's good intentions turn into better performance. You will  improve revenue and save time! Capko & Company, experts in medical practice management and marketing. 

By |2022-01-01T22:52:55-08:00April 22nd, 2011|
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Practice management tips to stop the shrinking reimbursement

 Know how much  it really cost you to see a patient. Divide your annual operating costs  plus the physicians wages by the number of patients you see each year. That's the number you need to know. Analyze payer performance.  Look at your top 10 CPT codes and how the  five  highest volume payers are reimbursing for those codes.  It the average on those top 10 codes does pay above the cost to see a patient you need to negotiate a better deal or drop the contract and see patients out of network. Develop strong relationships with  payers: Y our provider relations person can  help you get to the go to person for negotiating a contract that works.   Understand what a payer wants from you - Better access, getting patients better quicker and patient satisfaction! Capko & Company - We are on your side  and will help your medical practice shine!  

By |2022-01-01T22:52:55-08:00April 11th, 2011|
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Stop Wasting Energy & Money

Medical practice revenue is tighter than ever. It's time for you to take critical steps to keep costs under control and improve profits. The first step to fixing the bottom line is to look for the waste. Wasted energy results in a loss of potential revenue and lots of frustration.  There is waste throughout the typical practice, but most of it is silent and doesn't get the attention it should.  Here's some common threads we see in your world: A lack of clearly defined job responsibilities that result in duplication of effort. Accepting poor performance and inferior outcomes Mistakes that one person makes and another one corrects because it seems faster or easier. The good news is all these things are fixable.   Make the commitment.   Look at the action that needs attention. Is it the scheduling, patient visit or billing and collections, or something else? Then  flow chart the processes involved and identify the cause for errors and inefficiency, discuss the possible solutions and pick the one that makes the most sense.  Then  [and this is important]  assign someone the responsibility to see it through, set a reasonable time-line to get each change completed and  schedule meetings to review progress along the way.  You may need to hire a consultant to get the ball rolling and develop a process improvement plan, but it will be worth the effort.  Start thinking lean and reduce the waste! Once you see improvement it's time to celebrate.  Your bottom-line will improve, staff will enjoy their work more and patients will be happier.  Sounds like a win-win-win.   So just  do it! Capko & Company, experts in practice management and markeeting - We are here to help make your practice shine. s

By |2022-01-01T22:52:56-08:00April 5th, 2011|
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