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Practice Management


Tips on shopping for office space; Can the IRS hep you make a deadbeat pay?; Giving your staff a piece of the action; Whether to borrow marketing techniques from the supermarket; When a health plan wants a refund of old overpayments; Make sure a hospital will deliver on its promise; How to respond to a software theft; Can you charge insurers more for copying patients' charts?


Practice Management

Legitimate reasons to oust a patient from your practice

Q My partner would like to dismiss a patient for being rude to our receptionist. Is this ethical? What are acceptable reasons for telling a patient to find another doctor?

A You may discharge a patient for any nondiscriminatory reason, such as failure to follow medical advice, keep appointments, meet financial obligations, or treat your employees civilly.

But before you show this patient the door, check out both sides of the story. Perhaps the problem was simply a minor misunderstanding. Or perhaps the receptionist was the instigator and should be the one who is let go.

Tips on shopping for office space

Q I've decided to relocate. What things should I consider as I shop for office space in my new community?

A Look for a building that's visible to the public and in good condition; contains enough space for exam rooms, storage, reception, and administrative functions; provides adequate parking and easy street access; and is located near the types of patients you'd like to attract.

Can the IRS help you make a deadbeat pay?

Q If a patient receives reimbursement from his insurance company but refuses to pay his bill, can my office report the amount he owes us to the IRS as "income" taxable to the patient? We'd fill out a 1099-C form in the patient's name and tell him that if he doesn't settle his account, we'll forward the information to the IRS. I've read that this is a good way to encourage recalcitrant patients to pay when the usual collection methods don't work.

A Doctors have used this technique with varying degrees of success. The possibility of any IRS involvement may prompt some patients to pay, but others may conclude that they'd rather pay a small tax on the forgiven debt than sign the whole reimbursement amount over to you.

A more effective alternative: Warn the patient that failure to pay will force you to turn over his account to a collection agency. The possibility of damage to his credit rating may prompt him to settle his account.

Give your staff a piece of the action

Q What are the key advantages and disadvantages of offering employees a profit-sharing retirement plan?

A On the plus side, your practice will get a tax deduction for the contributions it makes on employees' behalf. Moreover, you and your employees will benefit from tax-deferred savings. That means tax on the money contributed to the plan—as well as on any earnings that build up within it—will be deferred until you start making withdrawals. In addition, a profit-sharing plan may help you attract and keep good workers.

The main drawback, not surprisingly, is the cost to your practice. In addition to making the contributions, which must be "recurring and substantial," you'll pay ongoing administrative and accounting costs.

Whether to borrow marketing techniques from the supermarket

Q What do you think about doctors offering discount coupons to patients? Other businesses use this gimmick to show customers their appreciation.

A Discount coupons would only tarnish your image, our consultants say. You're not selling cantaloupe, you're offering a professional service. A better way to show your appreciation is to see patients promptly and spend enough time with them.

When a health plan wants a refund of old overpayments

Q I just received a request for a $230 refund from a health plan that used an independent auditor to review 3-year-old claims. How far back can commercial insurers look when conducting audits for overpayments?

A This varies by state, so check with your state's department of insurance. The information may also be included in your contract with the payer. Medicare can take up to 10 years to audit claims if it suspects fraud and abuse.

Make sure a hospital will deliver on its promise

Q I'm considering two employment contracts. One hospital has offered me an income guarantee. The other says it can't do that, because it would violate the law. What are the rules regarding income guarantees from hospitals?

A According to the Office of Inspector General in the Department of Health and Human Services, if a hospital can document that its community meets the definition of a health professional shortage area, it may offer a guaranteed income to a physician who is willing to relocate or has just completed his residency. The offer must be made in writing, and the contract can last no longer than three years.

The contract can't require you to refer patients to that hospital or prevent you from establishing privileges with other hospitals. Nor can it be adjusted or renegotiated based on the volume or value of referrals you make to the hospital.

A cautionary note: Contracts with income guarantees often require you to remain in the area for a specified period of time after the guarantee expires. If you fail to do so, you risk having to repay the difference between your collections and the guaranteed income.

How to respond to a software theft

Q The doctor I rent half my office to copied my billing and scheduling software without my authorization. He then installed it on his billing clerk's and receptionist's computers, as well as on his home computer. Should we ask him to leave, send him a bill for the software, alert the manufacturer, or all of the above?

A It's best to part ways with this doctor. Not only did he steal copyrighted material, he violated the integrity of his relationship with you. He may also have violated your patients' privacy, since he had access to their records.

Don't bill him for the software—that would make you a party to illegal activity. Whether to report him to the manufacturer or local authorities is a judgment call that you must make.

Can you charge insurers more for copying patients' charts?

Q My office gets five to 10 requests a week from insurance companies that want records for patients who've applied for life or disability policies. Since I consider this a commercial—not medical—transaction, I charge these companies more for processing the records than I would a patient. Occasionally, an insurer balks and says that, by law, a physician can't charge more than 75 cents a page. Is this true? If it is, does the limit apply to everyone—or just to patients?

A Most states do cap charges for copying medical records and apply those caps across the board. But fee limits and other details vary by state, so it's best to contact your state medical society or state board of medical examiners for more specific information.

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 2000;9:226.

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