Practice Management

Are fortitude and cash all you need to open a solo practice?

Q I completed my residency last year, and I'm thinking about opening a solo practice. I don't have much business experience, but I have $25,000 in cash and a strong desire to go it alone. I've picked out a practice site and applied for hospital privileges. What should I do next?

A It's very difficult to start a practice from scratch. The money you'll spend doing that will almost certainly exceed what you'll spend buying into an established practice. Plus, with an established practice, you'd have a guaranteed patient census, office space and equipment, and a trained staff that's familiar with patients.

If you decide going solo is the right path for you, hire a consultant. He or she will be able to verify that your office location is in the right place to attract enough patients. Or, the consultant may steer you toward buying a retiring physician's practice. At the same time, you'll need to work with a bank to produce a business plan and a loan that covers rent, utilities, supplies, staff, marketing, and a living wage for you until your practice can pay you a salary. Tuck away some of your savings to tide you over until then. Next, get to work on hiring, contracting with health plans, and marketing to attract patients.

Winning patients over to pre-authorized checking

Q My practice recently began offering patients the option of paying their bills with pre-authorized checking, where a patient agrees to pay a certain amount of his bill each month, and an outside company automatically generates the patient's check. Most people have declined the offer, expressing concern about transaction fees or a perceived lack of control over their money. How can we win more patients over to this system?

A Make sure your entire front-office staff is trained in how this system works so they can present it as a win-win situation for patients. If patients are balking at the fees, consider covering some of the costs or giving them a free 90-day trial, after which they can opt out. Or remind them that if they pay with a credit card, they may incur interest. If your practice charges interest on outstanding balances, point out that the patient will avoid these costs, as well.

When patients voice concern about a lack of control over their finances, remind them that pre-authorized checking provides a paper trail: They will receive a cancelled check in the mail, just as they would for any other check they write, and the transaction will appear on their bank statement.

A timetable for tossing old charts

Q Several colleagues and I are combining our ob/gyn practices, and space constraints require us to weed out files before moving to our new location. However, we've received conflicting opinions on how long various records—charge slips, EOBs, daily/monthly reports, and medical records—should be retained. What do your consultants recommend?

A Keep charge slips and daily/monthly reports for at least four years. How long you keep EOBs from commercial plans depends on each insurer's audit protocol. Although HCFA suggests that you keep Medicare EOBs forever, many consultants say that 10 years should be safe for these.

Clinical records for an adult should be kept long enough to cover the statute of limitations for malpractice claims. In many states, this period is seven years from the patient's last visit. The statute of limitations for children, however, may not begin until they reach the age of majority—usually 18. Check with your state medical society, though, as state laws vary.

Don't dispose of old records in the trash. Shred them, or hire a company with expertise in this area. And ask for proof that the records have been destroyed.

Sorting out follow-up responsibilities after emergency surgeries

Q I recently saw the patient of a surgical urologist whom I was covering for. Because I believed the patient had a cancerous abdominal mass, I asked a surgical oncologist to do a laparotomy. The oncologist called in another urologist—a friend of his—to assist with surgery.

In addition to being disrespectful, this oncologist's actions have left me with questions about who should follow up with the patient. When I asked him about this he said he didn't care who else had been involved previously with the case, and that once he operates he takes full responsibility for a patient. Should I let it go at that? Or should I do my own follow-up, since I initially diagnosed the patient?

A Once the surgical oncologist took over, he relieved you of follow-up responsibilities. But you should note this in the patient's chart, and, if possible, mention to the patient that the surgeon will be providing follow-up care, so that the patient won't think you abandoned him. You should also make it a point to tell the doctor you were covering for exactly what happened and why two other physicians wound up treating his patient. And make sure to tell this doctor your diagnosis and any concerns you may have about the patient's condition.

Can you be compensated for bringing patients to a hospital practice?

Q My current employer is selling my practice to a staff-model HMO, so I'm contemplating a switch to a community teaching hospital. In negotiating the contract with this hospital, I'd like to arrange for some sort of financial recognition for bringing in up to 4,000 patients (at a visit rate of at least 450 a month). Is it possible to do this without running afoul of federal and state regulations regarding Medicare and Medicaid?

A No. Federal and state governments would view this as payment for referrals, which violates anti-kickback laws.

When you're a small fish in a large managed care pond

Q Our three-physician suburban family practice is about to negotiate its first managed care contract. Without the muscle of a large contracting organization behind us, we feel we're at a disadvantage. Although I've read the long list of things I'm supposed to bargain for, it doesn't seem realistic to expect the plan to agree to more than one or two of our demands. What do your consultants think are the two most important concessions to ask for?

A You're right that you won't have much bargaining power. But that doesn't mean you shouldn't ask for changes. Two concessions to focus on are "hold harmless" clauses and termination clauses. A hold harmless clause leaves you holding the bag when an HMO's treatment denial leads to a malpractice suit. Some attorneys suggest that if you come across such a clause, you should cross it out and initial it.

You should also try to insist on a clause that lets you opt out with 60 or 90 days' notice if you discover that participating in the plan isn't profitable.

Of course, neither of these concessions is worth pursuing unless you've first determined that the plan's fee schedule or capitation payments are adequate.

Should you fill the office manager's spot from within?

Q We've decided to hire an office anager. Our senior partner's secretary is interested in the position, and she seems like an ideal candidate: She has a thorough understanding of the practice, is efficient, and works well with others. But we're worried that her transition from co-worker to supervisor may create friction with the rest of the staff. Should we give her the job, anyway? And if we do, how can we minimize the problems?

A Some consultants advise against filling the office manager slot with a secretary who lacks managerial training. If she fails to make the grade, they say, you'll lose not only an office manager but a topnotch secretary as well. Others believe you should give her a chance to apply for the position while conducting a thorough search for additional qualified candidates.

If you choose her, be sure to provide the support she'll need to succeed. Discuss your concerns about the tension her promotion might spark. If she's still interested, give her plenty of educational opportunities to develop new skills and expand those she already possesses. All the doctors should announce the promotion to the staff and include a statement of complete support for the new manager.

Once she becomes "management," the physician owners become her working support group. The managing partner should schedule a half-hour meeting with her every two weeks to discuss any problems she might be encountering. She should also be included in your meetings. Take care not to overrule any of her decisions in the presence of employees or before discussing the issue with her. And for the first year, evaluate her performance quarterly and provide feedback—both negative and positive.

What to do if a troublesome patient won't cut the ties that bind

Q One of my patients has been a chronic complainer since Day One. In the year since she first came to our practice, she has become increasingly disruptive and abusive to the office staff, so I've decided to end the relationship. I sent a certified letter, return receipt requested, notifying her of my decision. I also explained that I'll be available to treat her in an emergency for the next 30 days, while she searches for a new physician. But she's reluctant to let go and has asked for another chance. Should I take her back?

A Stick to your guns. If she hasn't shown any willingness to change during her first year with you, chances are she never will.

Pension benefits aren't on the menu for cafeteria plans

Q In a recent item, you advocated setting up a cafeteria plan for fringe benefits. But when we tried to do that for our health coverage and retirement plan, our lawyer told us that pension benefits couldn't be included. Have we been misled?

A No; your lawyer is correct. A cafeteria plan allows an employee to choose between cash and "qualified" benefits, such as health coverage, group term life insurance, and dependent care. When we referred to "fringe benefits," we should have made clear that with the exception of a 401(k) plan, pension plans aren't considered qualified. Neither are long-term care insurance, medical savings accounts, and educational assistance.

When a lawyer requests the records of someone who owes you money

QI know I'm obligated to forward medical records to another physician, even when a patient has an outstanding bill. But what if it's the patient's lawyer who asks for records as well as a medical report? Can I refuse until the patient pays?

You must hand over the records if the patient has signed a release for the information, but you're under no obligation to provide a medical report. However, if you're willing to write the report, notify the attorney that you'll provide it once the patient has settled his outstanding balance. You may also charge for the report and insist on payment in advance. Moreover, you're entitled to be compensated for the expense of copying the records.

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;7:162.