Practice Management

Who gets insurance payments when a doctor leaves the practice?

Q A doctor who quit our group to join another left behind a number of outstanding insurance claims for care he rendered to patients. How can we make sure that third-party payments are sent to us, not him?

A If your original contract with the departing physician stated that payment for all services he rendered while with your group belongs to the practice, you don't have to do anything. Presumably, you've been billing under the tax ID of the practice (and not the individual physicians), so payment will come to the practice.

To cover your bases, notify your health plans about the change. Your correspondence should indicate the exiting doctor's termination date, along with a copy of his employment agreement showing that payments are due to the practice.

Cajoling reluctant patients to welcome a new associate

QOur group recently added a fourth physician in anticipation of our founding partner's retirement. But we're having difficulty getting his patients to accept appointments with our newest doctor. Any advice?

A sk the founding partner to cut back his hours, if he hasn't already, and have him send a letter to his patients introducing the new physician. Then have your scheduler tell patients that the wait for the founding doctor is several weeks, but they can see the junior associate much sooner. If necessary, encourage your staff to promote the young doctor by mentioning his credentials and special training.

Yardsticks to measure fiscal health

QOur group monitors overall financial performance by tracking revenues, expenses, payables, and receivables. Are we leaving anything out?

A Our consultants recommend that you also calculate the following: collection rate, age of receivables, percentage of write-offs, overhead percentage, and profitability of each service. In addition, you should break down the source of revenues—Medicare, managed care, fee-for-service, or out-of-pocket payers.

When you face a steep increase in rent

QOur landlord just informed our three-doctor group that our office rent will go up about 30 percent when our lease runs out in two months. Our office location is excellent, so we don't want to move.

To offset the added expense, we're thinking about subletting part of our space to a solo doctor, which our lease allows us to do. We'd give up our consultation and history-taking rooms and transfer these functions to the exam rooms and business office. What do you think?

A It's a bad idea. Compromising the way you practice may reduce the number of patients you can see, and therefore decrease income. Since office space typically accounts for only a small percentage of gross receipts, you should be able to cover most, if not all, of the added expense by raising your fees or seeing more patients.

When an attorney wastes your time

QI spent a great deal of time preparing to be an expert witness for a case that was settled before I testified. Should I still bill the attorney for my time?

A Yes. You did the work—which kept you from seeing patients—so you should get paid.

How to determine overtime pay for workers who get bonuses

QMy office manager claims that I must factor in the twice-yearly bonus I pay employees when calculating the rate at which to pay overtime wages. In other words, if a $10-an-hour staffer who works 2,000 hours a year (total annual salary: $20,000) received two $100 bonuses, the time-and-a-half pay rate should actually be $15.05 an hour, not $15. Is this true?

A Yes. According to the Federal Labor Standards Act, bonuses are usually included in those calculations. The exception: if they were "discretionary" bonuses, i.e., those that the individual did not expect to get.

Should tuition be part of your benefits package?

QOur office manager, who has a two-year degree from a community college, has asked me to help defray the costs of completing her four-year business degree. How much should I chip in?

A You can't consider your office manager's request in isolation. If you help her, other staffers will ask for your help, too. So now's the time to consider whether to make tuition benefits a part of your benefits package.

Consultants suggest subsidizing anywhere from 50 to 100 percent of class costs, depending on what your practice can afford. Reimburse employees at the end of each semester completed and attach a qualifying minimum grade level, certainly nothing below a C. Finally, stipulate that staffers must remain at your practice for at least two full years after graduation, or be forced to repay a percentage of the money you've paid out—40 percent if she leaves within the first year, perhaps, and 20 percent in the second year.

Updating the reception area: what furniture is best

QMy partner and I want to update our waiting room. What kind of seating would be most comfortable and appropriate for our patients?

A Love seats and chairs with arms are best. Couples or parents who come with a child will appreciate the love seats. Chairs with arms make it easier for patients to push themselves out. If you treat many pregnant women or geriatric patients, consider purchasing some chairs with seats that are 19 inches off the floor—these higher seats are good for patients who have difficulty getting out of normal chairs.

Sofas aren't a good choice because strangers don't like to sit next to each other.

Watch for this new trend: third-party record copying

QSome doctors who refer patients to my group hire an outside company to copy and send their patients' records to us. That company, in turn, bills us for their services. Shouldn't the patient's referring physician be responsible for those expenses? If not, may my group bill the patient to recoup our costs?

A Historically, referring physicians have either swallowed the costs or billed their patients for copying and sending records on to another doctor.

But if using a third party to handle the charts of patient referrals has become a common business practice in your community, you may need to take a different approach. You can either (1) pay the costs and keep the referrals coming, or (2) tell your colleague to swallow the costs or refer his patients elsewhere.

Going from straight salary to productivity

QWhen my four-doctor pediatric group opened the doors a year ago, we agreed to a first-year salary of $50,000 each. Now that we've established a healthy practice, we'd like to shift to productivity-based compensation. What's the best way to do this?

A Continue to share 25 to 50 percent of collections—not billings—equally. Allocate the rest according to each doctor's billings, patient count, or other productivity measure. Share fixed expenses, such as rent or leased equipment, equally. Allocate variable expenses, such as supplies or staff time, according to use. You can use each doctor's billings or patient census to determine this.

Do low-paying patients cost more than they bring in?

QI want to know whether I'm losing or making money on my Medicaid and HMO patients. How should I calculate my overhead per patient visit?

A For a rough estimate, divide your total operating costs by the number of patient visits per year. Operating costs include staff salaries, office space, malpractice insurance, medical equipment, drugs and medical supplies, business supplies, and continuing education.

The best way to reward a hard-working PA

QWhy did your consultants recently advise against basing a physician assistant's bonus on collections? Why did they recommend basing it on the PA's base salary, instead?

A Because the PA has no control over collections—that's the province of the billing department. Besides, basing a bonus on collections could give your PA an incentive to overcode, perform unnecessary procedures, or seek out only those patients with the best insurance coverage.

Your duty to patients whom you keep waiting

QSometimes when I'm running late, a patient leaves before I can see him. Is it my responsibility to make sure he reschedules?

A You can't force a patient to reschedule. But your office should go to great lengths to apologize for the inconvenience and make it easy for the patient to see you shortly after the aborted appointment.

Authorize your receptionist to notify patients as soon as they check in that you're behind schedule. She should tell them that they're entitled to reschedule their appointment if they'd prefer not to wait. Your receptionist should also call to offer a new appointment to patients who leave without telling someone.

When your caseload leads to malpractice worries

QI just passed my boards and took a hospital ED position where I work four consecutive 12-hour days. I feel like I'm seeing more patients than I can safely handle—but I'm not sure if that's because of the caseload or my inexperience. I'm afraid I'm going to miss a diagnosis. What should I do?

A You need to tell the department's medical director and chief of staff that you're feeling overwhelmed. It's their problem, too—the hospital could be held liable if a patient you injured sued.

The three of you will need to explore whether the ED needs to hire additional physicians, your schedule needs to be changed, or ED practice isn't for you.

If a good worker doesn't want to be transferred

QOur top billing clerk doesn't want to work in our new satellite office. She says the longer drive will make her late picking up her child from day care and has asked us to send another clerk who would be less affected by the transfer. How can we convince her we really need her at this new office?

A Good billing clerks are in great in demand. She might leave altogether if you force her to work at the new office.

To entice her to move, guarantee either that you'll let her leave the satellite office early enough to pick up her child on time or that you'll pay any fees she might incur for arriving late at the day care center.

If she still balks, suggest a trial period at a premium wage. Chances are, she'll get used to the extra money in her paycheck and will then agree to work at the satellite permanently, with the same salary.

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;21:118.