Practice Management Q&As

When to give up on small debts

Q: What's a cost-effective way to collect on small, long-overdue accounts—say, less than $30 and more than 90 days old?

A: Keep up the monthly statements and phone calls until an account reaches 120 days. If the patient hasn't paid by then, turn his account over to a collection agency. If an agency won't accept it, write it off.

How to classify a part-time doctor

Q: A physician our family practice wants to hire part time has asked us to treat him as an independent contractor. But we need him to be able to care for our hospital and nursing home patients. For insurance billing reasons, wouldn't it be better to bring him on as an employee?

A: Not necessarily. Until recently, if you treated a doctor as an independent contractor, you couldn't bill Medicare for any services he provided outside your core office. But the new Medicare law passed late last year did away with that restriction. Now, a practice can bill Medicare for an independent contractor's services, no matter where those services are provided.

Agree to malpractice arbitration?

Q: A managed care contract I'm considering would require me to submit to arbitration to resolve certain malpractice charges. Is this risky?

A: Yes. Although arbitration may help you avoid publicity and a long, drawn-out battle, you may not prefer other aspects. Arbitration doesn't require the same rules of evidence that the courts do. Plus, in most states, you can't appeal an arbitrator's decision or later take the dispute to trial.

Be fair to staff when you retire

Q: My long-time office manager was so upset to hear that I'll be selling my practice, that she submitted her resignation and demanded a $25,000 "severance package." She's old enough to retire, but has no pension because my practice never established a plan. Do I owe her anything? What's a fair way to handle this situation?

A: Unless you gave your office manager a written employment contract calling for severance pay, you don't owe her a dime. Fairness, however, dictates a different response. One week's salary for every year your manager has worked for you would be about right. In return, you can require her to stay on long enough to train her successor. But be prepared to offer the same package to your other employees, too.

One way around this is to ask the buyer of your practice to keep your staffers for two to three years.

Consultants and confidentiality agreements

Q: Should I require my employees to sign an agreement promising to protect patients' privacy? Should I do the same for accountants and consultants who see office records?

A: Under HIPAA, staff members who work with patient records don't need to sign anything. But accountants and consultants who see protected health information must sign a "business associate contract" which says, in effect, that they'll abide by HIPAA requirements, just as your practice does.

Demystifying UCR charges

Q: Can you explain how insurers determine usual, customary, and reasonable fees?

A: Insurers calculate UCR by using one or a combination of the following methods:

• Community standards: This method bases UCR on what other third parties pay.

• Physician-charge-data method: Insurers using this typically pay what the average doctor in your area charges for similar services.

• Relative value units: Fees are based on numerical values assigned to various services. Most commercial payers have adopted Medicare's Resource-Based Relative Value Scale, although they use different dollar conversion factors.

Keep in mind: Most insurers don't pay 100 percent of what they determine is usual and customary, but only 70 to 90 percent.

Avoid this termination provision

Q: I'm considering a managed care plan with a termination provision that requires me to notify the company of my intentions to leave 90 days before the contract's expiration date. Should this be cause for concern?

A: Yes. If you miss the 90-day deadline, you'll automatically be signed up for another year. Try to get the plan to agree to a provision that lets you out after 90 days' notice at any time during the contract period.

Must you share expert-witness fees?

Q: I recently testified as an expert witness in another doctor's malpractice case. The manager of my practice says that because I'm a salaried associate, I'm not entitled to the full amount of the expert witness fee. She says all I'm entitled to is a portion that equals my regular hourly rate. Nothing in my employment contract covers this. What are my rights?

A: If you gave the testimony during regular working hours, then your practice is entitled to the payment. But if you testified on your own time, you're entitled to the fee and could sue the clinic for it. Obviously, that may not be prudent if you want to renew your contract with this group. Whether or not you sue, get a written agreement on who will receive such payments in the future.

When an employee steals drugs

Q: I fired a physician assistant after discovering that he stole narcotics from the office. Must I report this to the state's medical board? Could I get in trouble for withholding this information from the PA's next employer?

A: You may have a duty to report the incident to the board that licenses physician assistants in your state. In many states, the board will keep your name confidential. But ask your attorney to review your complaint before you contact the board. You'll need to be sure of the dates of the theft, and the substances and quantities stolen.

In most states, you're not required to alert the employee's new boss. In fact, doing so could invite defamation charges. Your colleague has access to the board's records and should discover the problem himself in the normal course of employee screening.

Making room for a new associate

Q: My partner and I want to hire a third family physician, and I suspect we'll need more exam rooms (we currently have four). We don't want to move, and we can't afford extensive remodeling. What can we do if we end up squeezed for space?

A: Family physicians typically need three exam rooms each, plus a shared procedure room. It's best if you each have a private office that can also double as a consulting room. To create more exam space in your current location, try converting a storage room into an exam room. Or extend office hours and stagger shifts, hospital rounds, and nursing-home visits.

For instance, you could open the office from 7 a.m. to 7 p.m., and run three six-hour shifts—7 a.m. to 1 p.m., 1 p.m. to 7 p.m., and 9 a.m. to 3 p.m. or 10 a.m. to 4 p.m.—with no more than two physicians working at the same time. On days when one of you is off, you can resume normal office hours.

How much staff do you need?

Q: Our seven-doctor practice employs two midlevel providers. How many clinical and administrative staffers do we need?

A: Most primary care offices need about 1.5 full-time clinical employees per provider and about .5 to 1.5 full-time administrative employees per provider. For you, that translates to 13.5 clinical and 4.5 to 13.5 administrative staffers.

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@advanstar.com (please include your regular postal address). Sorry, but we're not able to answer readers individually.

Kristie Perry. Practice Management Q&As.

Medical Economics

Aug. 6, 2004;81:72.