Many small private practices are struggling to stay in business, many of those entrepreneur physicians are looking at their options (joining a hospital as an employed physician, joining a larger either single specialty or multi-specialty group as an employee or a minority partner) as they struggle to maintain and increase revenue streams and have some sort of work-life balance and future financial security. It is very difficult for entrepreneur physicians to give up total control and therefore none of these options are real considerations.
Many small to medium sized practices don’t realize that the practice is a business and therefore these practices are not managed like a business. Historically the physician’s wife has managed a small practice or they have promoted the medical records clerk or other clinical or administrative staff who have been loyal to the practice. Many practices generate well over a million dollars a year in revenue and do not have a seasoned and experienced practice manager who understands profit and loss, budgets, key performance indicators (“KPI’s”) the highly complex compliance environment that we work in, the changes in reimbursement from fee for service to paid-on-performance and management of payer contracts.
Small to medium sized practice managers have to wear many hats and have a large menu of responsibilities from human resources, accounts payable, overseeing either an outside billing company or an in-house billing department, overseeing the front and back office operations, ordering of supplies, management of the practice management and electronic medical record systems (EMR”), health plan and hospital credentialing, payroll and patient complaints.
To add to this extensive menu of responsibilities there is a huge shift in how the insurance companies and government health plans are paying for services moving from fee-for service payment methodology to paid-on-performance. The practices electronic health records now have to be organized to allow for the reporting requirements for Health Effectiveness Data and Information Set (“HEDIS) this includes the Accountable Care Organization (“ACO”) that include 33 quality measures. Medicare will no longer continue to increase reimbursement on a fee-for-service basis and the only way to ensure future increases in reimbursement is through the Merit Based Payment Systems (“MIPS”). Don’t think these programs will be eliminated if there is a change in government because they will not, so get on board. 2016 I the first performance year for MIPS and if you meet the performance measures you will receive a 4% increase in reimbursement and if you don’t you will receive up to a 4% penalty which nobody can afford.
The best way to increase revenue and stay financially solid is to hire a manger that not only understands where healthcare is going, but can get you there. It is critical that you prepare budgets and manage expenses. It is important to review additional revenue generating services that can substantially increase revenue in dollars and bonuses through HEDIS and MIPS programs, patient compliance and satisfaction all of which will be reported to the health plans and you will receive bonuses for.
Examples on how to increase revenue with no additional financial investment; Use your EMR as a tap to switch on the gushing flow of water as you recall patients who have not been seen within 90 days for chronic illness. Not only will that generate revenue but it will assist in meeting HEDIS requirements. Add services to your practice; for family practice, internal medicine and geriatric care you can add a weight loss program and for those patients with a BMI>30 there is no out of pocket expense/financial responsibility for the patient (co-payment or deductible). The patients are seen every week for 1 month, visit every other week for 2-6 months and if the patient loses 7lbs they can stay on the program. 120 patients per month on this program generates at least an additional $150,000 per year not including fee-for-service medications and supplements.
With a small one time cost for a Retinavue Machine you can screen in the practice for Diabetic Retinopathy which effects 80% of those patients that have suffered with diabetes for 15 years. 80% of patients are not complaint with Diabetic Retinopathy screening. Diabetic Retinopathy can be screened in the office by a medical assistant taking a picture of the retina, downloading the image on to a data port and sending it electronically to an ophthalmologist to read. The reimbursement for a 5-minute service performed by a medical assistant after the ophthalmologist has been paid is around $115.00.
Marketing is also key to the success of your practice. Historically when you opened your practice and became a provider for the health plans that you are contracted with, you opened your doors and the phones rang and patients just showed up. Healthcare has changed and it has become a consumer driven industry. Patients have realized that they have choices. Many patients look on line at your patient reviews before they schedule an appointment to see you. If your reviews indicate that the patient has to wait 3 weeks to be seen, or your staff was rude, or they were left waiting in the waiting room for 1 hour before they were seen, you can guarantee that your new patient volume will go down. Managing social media and having outstanding customer service is key to growing and maintaining your practice.
It is important to have an interactive webpage that no only allows for you market the services that your practice provides and share your qualifications, but allows for the patient to easily schedule, reschedule or cancel an appointment, review their medical records and pay for services provided.
Reporting is also key to the success of your practice. Reports do not lie and they clearly give you a clear and precise view of where you are. It is important to meet with your office manager weekly but no less than monthly to go over your accounts receivable and accounts payable reports. You should have your finger on the pulse with cash flow. Any payment not made by a primary payer within 60days you should be asking for reports on what actions have been taken to receive payment. Often times physicians are working hard and not getting paid.
Systems need to be in place for every function in the practice and policies and procedures written, implemented and managed for all job tasks in the office, from registering a patient to collecting payment.
It is imperative to your growing practice that you hire an experienced practice manager and have an integrated team of clinical and administrative professionals that can keep your practice at the forefront. The physician owner needs to stay engaged with the manager and not abdicate the responsibilities of the business that you own to the manager. It is your responsibility as the business owner to make sure that your staff is taking care of your business.
There is only one way to run a private practice and that is the right way.