Practice Management

When patients file for bankruptcy

QOver the past year, my practice has received a number of personal bankruptcy notices from new patients. Since the patients claim to be unable to pay their bills, we've been writing them off as bad debt. Upon closer inspection, I realized that I'd treated many of these patients right before they filed. I believe they've been blatantly dishonest, and I wonder if, in the future, I should demand payment prior to treating them (except for emergencies). What do your consultants think?

A Writing off an unpaid bill as bad debt is recommended, regardless of whether the patient has filed for bankruptcy. It's also a good idea to require all patients to pay at the time of service—whether that's an insurance copay, deductible, or the full amount. Ask all patients to sign a statement acknowledging their financial responsibility when they check in for their appointment. Explain that patients who expect to have difficulty meeting this obligation should make payment arrangements with your office manager prior to seeing you.

If you feel these patients are taking advantage of you, and you don't want to continue treating them, you're within your rights to dismiss them from your practice. Be sure to notify them in writing, and give them 30 days to locate a new physician. Make sure your receptionist has a "hot list" of patients who shouldn't be given appointments.

Whether you dismiss these patients or not, file your claim with the bankruptcy judge. You may salvage some money when the judge distributes the patient's assets.

Breaking an insurer's "hold harmless" stranglehold

QAll of my contracts with insurers include indemnification clauses that put my practice on the hook to pay the carrier's legal fees and damages if it is sued by one of my patients for denying treatment. I need to float a loan for my practice, but the bank is leery of lending money because of the potential liability attached to those clauses. It's a no-win situation: If I refuse to sign contracts with those provisions, I'll lose my patients. If I sign the contracts, I won't get the loan, and I'll lose my practice. What do you advise?

A Some of our consultants say that when your contracts come up for renewal, you should simply cross out the hold-harmless clause and initial it. Most carriers won't fight this, they say.

Reassure employees that efficiency isn't a threat

QOur billing staff doesn't like the idea of preauthorized checking. Under the system, a patient agrees to pay a certain amount of his bill each month, and an outside company automatically generates the patient's check. Some staffers are afraid that the system would work so well that they'd lose their jobs because they would no longer be needed to prepare invoices or pursue outstanding payments. Are these fears legitimate? How can we get employees to buy into preauthorized checking?

A It's unlikely that most patients will stampede to preauthorized checking. Presumably, most of your patients have health insurance, so their bills will be too small to warrant preauthorized checking. Therefore, your staff will still need to do a great deal of billing. On the other hand, the program may lead to fewer collection notices and calls—tasks your staff is probably happy to forgo. Tell employees that any time that's freed up can be used to make the office run more efficiently, so that the practice can handle more patients and become more profitable.

Caring for staffers injured on the job

QI'd like to provide care to my employees who are injured on the job. This would help me keep insurance costs down because I wouldn't have to worry about another doctor overutilizing services or my staffer gaming the system. Are there any drawbacks?

A Yes. You could be accused of crossing a privacy boundary because other staffers would have access to their co-workers' medical records. Also, if treatment didn't work out well, you'd be open to charges of putting costs above care.

Instead, recommend that your employees see a doctor you trust—one who's well acquainted with your state's workers' comp laws and will provide aggressive case management.

What to tell patients when you drop their health plan

QI declined to renew my provider contract with an insurer whose fees are exceedingly low. Who should notify the affected patients—the plan or me? If it's up to me, what's the best way to spread the word?

A You both need to act. For your part, send these patients a letter explaining that although you'll no longer be a participating provider under their current plan, you'd like to continue providing them care. Name the other plans you participate in and tell patients that you'd be happy to keep serving them under one of these plans.

Do founding doctors deserve higher salaries?

QShould seniority be a factor in a group's compensation formula? Our two founding partners say that their ability to draw patients to the practice is worth an extra 5 percent each in income.

A It depends. If the senior partners no longer take call, or if compensation is based at least 50 percent on collections, or if the younger partners paid for goodwill as part of their buy-in, the founding partners are already being rewarded. But if none of these situations apply, then 5 percent isn't asking too much for their "rainmaking" abilities.

What you can learn from departing employees

QWhat questions should I ask employees who resign? Who should meet with the staffer—my office manager or me?

A Let your office manager do it. Here are some questions to ask:

• Why are you leaving?
• What did you think about the working conditions in this office?
• What did you think about how the doctor and staff communicated and interacted with one another?
• Were the working hours reasonable?
• Were you satisfied with your salary and benefits?
• Did you receive adequate sick time and vacation leave?
• Were you satisfied with the feedback you received on your performance?
• Were you satisfied with the relationship with the physicians?
• Were problems resolved in a timely manner?
• What did you like best about your job?
• What did you like least?
• What would you change?

Reduce expenses by cutting staff raises?

QTo control practice expenses, my partner suggested we switch from basing employee raises on cost-of-living plus merit to simply merit. What do you think of this suggestion?

A It could hurt staff morale, so do it only as a last resort. Plus, if you limit staff raises while you and your partner continue at the same level of earnings, you'll foster hostility. So some consultants suggest that you pare doctors' pay, instead. If you must eliminate COLAs, you'll need to justify this to your staff.

Edited by Kristie Perry,
Contributing Writer

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

2002;5:132.