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Practice Management


Performance evaluations; Unloading bad debt; How to find a community where practice will flourish; Can you put brakes on your Medicaid caseload; How to give a patient his walking papers; When your employer breaks the labor laws; Forecasting value of your practice; Staff bonus; Whether to tell patients you're switching groups.


Practice Management

Unloading bad debt

QForget collection agencies! Should my practice simply sell its aging accounts receivable to a company that advertises its willingness to buy them? 

A In most states, you can sell all but your Medicare and Medicaid accounts. But the buyer will pay only a portion of the full dollar amount of your receivables. It may not even accept receivables that are too old. For these reasons, consider this move a one-time bail-out for your practice, and work on improving your in-office collection techniques.

Performance evaluations for staffers who seem like family

QAre the guidelines for conducting employee performance evaluations different for small offices? My partner and I have only two staffers: a clinical assistant and an administrative assistant. As you can imagine, we work together very closely, so we're concerned about how to give praise or constructive criticism. Can you provide direction?

A Approach this the same way any other practice should: Stick to a regular schedule of performance reviews; conduct evaluations in private; start the review on a positive note; and measure performance against established job descriptions and goals. If an employee falls short, ask what's standing in the way of meeting her performance goals.

How to find a community where your practice will flourish

QWhat type of patient population is necessary to support a solo endocrinology practice?

A You'll need 4,000 to 8,000 active patients to make your practice thrive, which translates to 75,000 to 100,000 residents per endocrinologist. But numbers shouldn't be your only consideration. Much of your success will depend on the relationships you form with hospitals and primary care physicians, as well as what health plan contracts you hold.

Also consider the demographics of the community: What is the age, general health, and gender distribution of the population?

Can you put the brakes on your Medicaid caseload?

Q I recently suggested to my partner that we limit Medicaid patients to 10 percent of our practice, and she told me that physicians either have to take all Medicaid patients who apply, or none at all. Is she right?

A Probably not. Medicaid regulations vary, but most states allow you to decline any patient as long as you're not discriminating on the basis of sex, race, religion, or some other protected class. To be certain, contact your state's Medicaid office.

How to give a patient his walking papers

Q I've never had to fire a patient—until now. What should a discharge letter to a non-compliant patient say?

A Our consultants suggest the following: "I regret to inform you that because of your continued refusal to follow my medical advice I am no longer able to serve as your physician. I have enclosed the names and contact information of three other physicians who are qualified to assume your care.

"I will be available to treat you on an emergency basis only for the next 30 days. This should give you sufficient time to find another doctor. When you have chosen one, please call my office so that I may forward your medical records to your new physician."

Send the letter by certified mail, return receipt requested.

When your employer breaks the labor laws

QI work from 9 to 5, Monday through Friday, for a community health center that pays me by the hour. The center withholds Social Security tax from my pay, assigns people to work with me, and pays my malpractice premiums—but calls me an independent contractor. I think the center is bending wage-and-hour rules by denying me benefits given to other employees: paid vacation, health insurance, a retirement fund, workers' compensation, and time-and-a-half pay for hours worked beyond 40. Does the fact that I have no supervisory responsibilities make this legal?

A No. You fit the IRS definition of an employee. Since you work full time, the health center can't legally withhold from you the benefits it gives other employees. And since you're paid by the hour, the clinic owes you time-and-a-half pay for any overtime you've worked. You may need a lawyer to persuade the center to comply with the law.

Forecasting the value of your practice

QI'm a family practitioner who plans to retire in five years. Because I intend to use the proceeds from the sale of my practice to fund my retirement, I need to start crunching numbers now. Is it possible to assess a potential price tag for my practice five years in advance? If Yes, how?

A You can certainly estimate a price in advance, but understand that changing market conditions may have a big impact on what you can ultimately charge. In the past, a primary care physician could figure on selling for approximately 100 percent of annual gross. But in recent years, practice values have fallen precipitously in some parts of the country. In these places, an FP may be lucky to get 50 percent of gross.

The best way to arrive at a reasonable value for your practice is to contact a health care consultant who's qualified to do an appraisal. The National Association of Healthcare Consultants (800-313-6242 or www.healthcon.org) can provide a referral.

Keep in mind that your practice's value depends on your continuing to work full time until retirement.

Can a staff bonus violate anti-referral rules?

QFor years, my group has set aside the revenues earned from lab fees to pay employee bonuses. Each worker's share is based on length of service and current salary. The pool of money has shrunk over time as capitation and discounted fee-for-service have come to make up more of our gross. I think this is reason enough to discontinue the bonus program. Another reason: I'm worried that the arrangement may violate anti-referral rules. But my partners don't share my concerns. What do your experts think?

A They're in your partners' corner, but with a caveat. Because administrative employees don't refer patients for services, and because you're not awarding bonuses based on the value or volume of lab services, your practice isn't violating anti-referral rules. But since your traditional pool of bonus money is shrinking, it may be time to reconsider how you fund and distribute such rewards.

Whether to tell patients you're switching groups

QI've accepted a job offer from a competing practice and will start working with my new employer in four weeks. If patients from my current practice ask where I'm going, would it be unethical to tell them?

A It wouldn't be unethical, but it might violate a noncompete or nonsolicitation provision of your current employment contract. Check that before you start revealing your plans to patients.

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;6:234.

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