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Practice Management


If a former employer breaks its promise to cover your tail, Documenting encounters with other doctors' patients, Should a buyout include goodwill? How much money to set aside for advertising, A fitting sendoff for a longtime employee, In-house collections that don't measure up, The right cure for patients with telephone refill-itis, When slow-motion health plans hurt your cash flow, Making appointment reminder calls


Practice Management

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Choose article section...If a former employer breaks its promise to cover your tail Should a buyout include goodwill? How much money to set aside for advertising A fitting sendoff for a longtime employee In-house collections that don't measure up The right cure for patients with telephone refill-itis When slow-motion health plans hurt your cash flow Making appointment reminder calls Documenting encounters with other doctors' patients

If a former employer breaks its promise to cover your tail

Q Last year, when I was hired to work in a community health center, my contract included a provision for claims-made malpractice insurance coverage and three years of tail coverage. However, the company that hired me no longer operates the clinic and recently suffered severe financial losses. Consequently, my former employer says it won't provide the tail coverage it promised. Is there any way to force the company to do so?

A Although the company is legally obligated to provide the coverage, getting it to do so is another matter. You could try making a formal demand by certified mail, return receipt requested. But if your letter goes unanswered, your only other recourse is to hire a lawyer and sue for breach of contract.

In the meantime, rather than risk going bare, pay for the coverage yourself.

Should a buyout include goodwill?

Q When I became a partner in our medical group, my buy-in included an amount for goodwill. But our contracts don't have any provision for goodwill buyouts in the event of death, retirement, or disability. Is this standard practice?

A No. Most practices do include a goodwill payout to their departing partners. The contract you describe seems to shortchange senior physicians for the years they've spent developing the practice and its sources of business.

How much money to set aside for advertising

QHow much should our group spend on marketing?

A Generally, 3 to 8 percent of gross revenue. But it depends on where you're located. Rural practices with little competition don't have to spend as much as urban or suburban practices.

Your marketing plan should encompass outreach to existing patients, potential new patients, hospitals, payers, referring physicians, and the community at large.

A fitting sendoff for a longtime employee

Q An employee who has been with us for 20 years will retire in a few months. What should our group do to mark the occasion?

A Celebrate! Employees who stick with a practice that long are a dying breed. The fact that you've cultivated such loyalty from a staffer says very good things about you and your practice.

Take the entire staff out for lunch and give the departing employee a gift certificate. Also consider holding an open house and invite patients to drop by and wish your staffer a fond farewell. Such an event would be an excellent marketing strategy, giving you an opportunity to strengthen relationships with patients—and with remaining employees.

In-house collections that don't measure up

Q My staff doesn't have enough time to follow up on unpaid claims, and my income is starting to suffer. Is a collection agency the only solution?

A You'd be better served by handling the problem in-house—even if you have to hire another insurance clerk. But if the accounts are more than six months overdue, a collection agency may have a better chance of success.

If you decide to go this route, ask your colleagues, medical society, or hospital to recommend local firms that specialize in medical accounts. Fees generally run from 20 to 50 percent of what's collected; the older the claim, the more the agency gets. Be sure to review every account before turning it over to an agency. If you're concerned that a particular patient may be considering a malpractice suit against you, don't turn over that person's account.

The right cure for patients with telephone refill-itis

Q Our three-doctor family practice receives an incredible number of requests for telephone prescription refills—sometimes as many as 1,000 a month. We've tried to encourage patients to bring all their medications to the office each time they come. We've posted reminders where they check out and printed them on our statements, but nothing seems to help.

We're thinking of refusing to fill telephone requests, except in emergencies. Instead, we'd like to require patients to come to the office and see our nurse, so we can charge them for a level 1 visit. Is that reasonable?

A Because of malpractice and legal risks, our consultants caution against refusing to fill telephone requests. You can try instituting a $5 to $10 fee for each request. When patients call or come by to request a refill, tell them that they'll incur the charge and that their insurance may not cover it. Also be sure to explain that you can't extend a prescription without reassessing the condition it was intended to treat.

But, first, investigate whether the problem is of your own making. Presumably, most refills are for patients with chronic conditions, who require regular monitoring. Are you sure that you're authorizing enough refills to cover the period between evaluations?

When slow-motion health plans hurt your cash flow

Q I'm frustrated with HMOs whose capitation payments lag behind my patient enrollment. Some payers take three to four months to issue checks that reflect the addition of newborns or new members to my practice. But complaining to the plans has done nothing. How can I blunt the pain of these late payments?

A You can't. You could try pressuring insurers by threatening to terminate your contract unless they speed up payments. Or you could ask the plans to increase your fees to compensate for late payments. But these tactics probably won't work.

Ultimately, you need to make this a public battle. Inform your state's insurance commissioner and medical society of the problem. Also consider contacting your local elected officials and writing a letter to the editor of your daily paper. And next time you negotiate or renegotiate a capitation contract, try to include a penalty clause for payments not received within a specified time period.

Making appointment reminder calls

Q How far in advance should my scheduler call patients to remind them of appointments?

A Call 24 to 48 hours before the visit.

Documenting encounters with other doctors' patients

QI'm acutely aware of the need to document my role in patients' care, but I'm not sure how to do this when I'm covering for physicians in another practice. My on-call duties aren't likely to bring me into regular contact with these patients, so it doesn't seem efficient to create a new medical record for each encounter. What do your consultants recommend?

A Treat these patient encounters the way you would a consultation. Create a master sheet—similar to the consultation sheet used in hospitals—and record all pertinent information. File one copy in an alphabetical folder in your office, and send another to the doctor for whom you were covering.

Edited by Kristie Perry,
Senior Associate Editor


Do you have a practice management question that may be stumping other doctors, too? Write: PMQA Editor, Medical Economics magazine, 5 Paragon Drive, Montvale, NJ 07645-1742, or send an e-mail to mepractice@medec.com (please include your regular postal address). Sorry, but we're not able to answer readers individually.


Kristie Perry. Practice Management. Medical Economics 2001;10:150.

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