Healthcare practice management encompasses a range of specialized accounting and consulting services. Today, medical practices face mounting challenges in cost control, cash flow improvement, and maintaining patient care standards. However, for many physicians and healthcare leaders, there simply is not enough time, resources, and dollars to offset reimbursement reductions, regulatory audits, and technology advances to deliver high-quality, patient-centered care. The following is a broad outline of what typically comprises healthcare practice management in a physician practice environment.
I love helping clients structure operational processes that increase efficiency and save time. With over 25 years of experience, I can help independent physicians in managing a medical practice with the following services:
Whether you need to enhance billing performance, add staff, or increase your medical practice management resources, I can help you develop and implement billing and collection improvement strategies that are designed to minimize accounts receivable days, reduce denials and maximize collection results.
I also offer a multitude of medical practice management services that don’t fall into financial or operational categories:
The fear of employee theft warrants some medical practices to seek an embezzlement review.
The efficiency of a medical practice can be traced directly to its internal operational systems. A lack of systems will often result in lost revenue. Thus, every medical practice should have a policy and procedures manual detailing how, when, and by whom certain office functions are to be performed.
A practice valuation determines the value of a physician’s ownership interest in their medical practice. Such an engagement can be requested by physicians, hospitals, insurance companies, and other entities or individuals who want to acquire medical practices. A practice valuation could also be conducted for buy/sell situations.
Assistance to physicians who are contemplating merging their practices need someone to guide them through the process.
Medical practices need assistance with contracts such as those related to physicians’ employment, buy/sell agreements, and managed care. Most of the provisions contained in physicians’ contracts are financial in nature, such as tax considerations. Physicians need someone to review, and even assist in the development of such contracts. Some medical practices also may need assistance with contract negotiations with a potential employer, hospital, or managed care plan.
Reducing potential liability exposure is one of the key reasons for implementing and maintaining a compliance plan. A compliance plan should be reasonably designed, implemented and enforced so that it will be effective in preventing, detecting, and correcting inappropriate and potentially civil or criminal conduct. I also work with you to make sure you are in compliance with HIPAA, OSHA, and other compliance targets.
The healthcare industry is moving toward an integrated system of delivering healthcare. As such, doctors might need to affiliate in order to compete. Physicians need assistance with all issues related to selling their practice to a hospital system, becoming employed by a hospital system, and becoming affiliated with an Accountable Care Organization (ACO).
To effectively manage a medical practice, many offices are installing computers. Most offices will need assistance with both the purchase and implementation of a computer system, or an upgrade of an old system. Practices are now realizing that the proper management of a practice mandates a very good computer system. Assistance is also needed to implement electronic medical records (EMR).
Myriad state and federal regulations related to the daily operation of a medical practice. Regulations associated with blood-borne pathogens and clinical laboratories are just a few. Medical practices need help implementing and maintaining knowledge of current and new governing regulations.
The HIPAA Privacy Rule provides federal protections for personal health information held by covered entities and gives patients an array of rights with respect to that information. At the same time, the Privacy Rule is balanced so that it permits the disclosure of personal health information needed for patient care and other important purposes. The Security Rule specifies a series of administrative, physical, and technical safeguards for covered entities to use to assure the confidentiality, integrity, and availability of electronic protected health information. Is your medical practice in compliance as a covered entity under this law?
The success of most medical practices is dependent on the personnel they hire. Many physicians do not have experience with hiring. Poor hiring decisions can be detrimental to any office. I can aid in the hiring process by helping you place appropriate advertisements, screening resumes and conducting telephone interviews with potential job applicants.
The firm provides interim management services to physician practices when needed or necessary.
It’s important that improvement events take waste out of the physician office and not just move the waste to the doctor’s corner. Efficiently designed and monitored processes can increase revenues.
Most medical practices put themselves in a position in which they are vulnerable to embezzlement. At some point, most medical offices need help implementing and monitoring a basic system of internal controls.
Issues such as valuation, negotiation, taxes, contract development, and practice transition demand the assistance of a CPA. For example if a retiring physician decides to sell his solo medical practice, his CPA can be hired to appraise the practice, market the practice to potential buyers, and assist in finalizing the sales transaction. Tinsley Medical Practice Brokers can also assist.
Because the medical industry is changing, old compensation systems may no longer be viable. An example would be the service area where capitation is growing. As such, practices may need help revising their current compensation systems or developing new systems. Also, governmental regulations, such as the Stark laws, often require changes to current physician compensation systems.
New physicians need support in establishing and setting up their offices. New doctors need help selecting computer systems, developing operational policies, hiring personnel, etc.
To operate a successful medical practice, a physician and his or her office staff must be kept up to date on all the changes that occur annually in the healthcare industry; for example, changes in Medicare billing policies and procedures. I can assist with this education process either through meetings with the physician and staff or by presenting seminars on timely topics.
Many physicians use outside billing services to bill and collect their services. Often, these agencies are left unaccountable. The physician’s agency should be reviewed periodically to make sure services are being billed out correctly and that the agency is putting in the time and effort it takes to collect these services.
A physician needs help strategically placing his practice in a position to take advantage of a changing healthcare marketplace. How to do this requires careful planning. Analysis and advice on strategic planning issues (i.e., new service lines, covering additional facilities, managed care strategy, hospital relationship strategy, referring physician relationship strategy, etc.) is vital along with participation in the execution of strategic plans to reach desired goals.
Many medical groups are paralyzed by the lack of an effective governance structure and/or decision-making system. Issues are discussed ad nauseam… decisions on important issues are never made or made too late… all physicians must be involved in all decisions (including which way the toilet paper should hang). The result is that often only the unimportant issues get resolution and the group spends little if any time focusing on strategically important issues.
Every medical practice needs to know what it costs to perform a particular service. This is especially true in areas where managed care dominates the marketplace.
To compete in a managed care environment, practices must be able to demonstrate that they deliver cost-effective healthcare services. This allows the practice to compete for managed care contracts and to successfully negotiate reimbursement rates.
Capitation is a common way doctors are paid by HMOs and other delivery systems. When presented with a capitation rate, most doctors are unaware whether or not such rate should be accepted and even more important, whether or not such rate will be profitable.
As managed care grows, doctors and their practices must become “cost effective.” This also applies to integrated delivery systems. (lambertsfruit.com) Doctors who deliver cost effective care will be the ones who will have the ability to negotiate managed care rates and be in a position to compete for exclusive contracting arrangements. To become and remain cost effective, practices must implement quality assurance and utilization management programs.
To compete for managed care contracts, practices and other healthcare providers must market themselves to these payers. Development of a marketing document and a marketing program is essential.
At periodic intervals, a medical practice needs a complete review and assessment. The goal of this service is to evaluate the overall efficiency of the practice and to determine if it is losing revenue in some form or fashion. A review attempts to improve the bottom line. For example, if a practice has a decrease in cash flow, it may want to hire a CPA to conduct a complete assessment of its practice operations to determine the cause of the decrease.
A coding analysis determines if the practice is coding all of its services correctly. If the office members do not code the services correctly, the practice may lose revenue. The analysis covers both procedural coding and diagnosis coding.
A review starts with an analysis of the key aspects of each managed care contract. First there is a financial analysis of the contract (ex. Collection percentages by payer, individual payer aging, days in A/R), then a review of key contract terms, including effective dates, termination dates, claim filing and payment guidelines. It also identifies contract terms that would be considered a disadvantage to the medical practice. Next, a fee schedule analysis identifies the code specific reimbursement rates for each managed care contract and outlines a plan-by-plan comparison.
Integrated delivery systems, group medical practices, and even solo practices need to increase their own reimbursement from managed care plans. The way to do this is to negotiate an increase in price from these plans.
Many medical specialties, such as cardiology, are provided for a large number of Medicare and Medicaid patients. Specific rules apply to Medicare/Medicaid billing. An office that is not aware of certain billing rules will lose revenue. Therefore, Medicare/Medicaid billing must be reviewed on an ongoing or periodic basis.
To optimize cash flow, a medical practice must manage its accounts receivable. All systems and procedures related to accounts receivable management must be monitored and reviewed, either on an ongoing or periodic basis. The aging of receivables also must be monitored.
Benchmarking is the process of analyzing the indicators of business success and applying that information to achieve business growth and improvement. For medical practices, it is a way of taking a critical look or “snapshot” of your practice’s health. It provides you with an objective way to measure your practice’s performance. Throughout most of the business world, benchmarking is a key element to strategic planning, a vital necessity to all medical practices. Benchmarking of medical practices helps determine which of your practices and processes are the best and which ones need attention.
Revenue cycle management means taking steps to assure that you get paid for what you do and that you get paid in a timely fashion. The revenue cycle starts when the patient calls your office for an appointment and your staff captures the patient’s name, phone number, and maybe the name of their insurance company. The cycle ends when the balance on their account is zero. A review of revenue cycle processes can lead to an increase in both revenue and cash flow.
To maintain or increase revenue, it’s important to analyze physician productivity. Productivity should be compared to prior history and market benchmarks to create reasonable productivity ranges for physicians.
Building a practice through marketing must first start with a plan. Your plan should include market analysis, market strategy, implementation, and follow-up. Developing this plan and making it effective must begin with plenty of background information.
Assist in physician recruitment by helping practice determine appropriate compensation package (i.e., salary and benefits) and by explaining the financial details of the package to the physician being recruited. Also preparation of related Letter of Intent.
Healthcare practice management encompasses a range of specialized accounting and consulting services. Reed Tinsley can assist in a number of ways including:
Reach out to Reed Tinsley today to talk through your medical practice management needs.
Yes, I can help with financial management, including budgeting and revenue cycle management. I can tailor my responses and recommendations to your specific financial needs and circumstances, offering personalized guidance to help you better manage your finances, create budgets, and optimize your revenue cycle. I can provide guidance, insights, and best practices based on this knowledge to assist in making informed financial decisions.
Outsourcing medical practice management to an expert such as Reed Tinsley offers several advantages over handling all administrative functions in-house. By partnering with me, you’ll gain access to expertise areas such as managed care contact negotiation, medical strategic planning, compliance, and financial operations– just to name a few.
If you have questions about personal finance for physicians, contact me at 281-379-5988, submit a form online, or email me directly at reedt@rtacpa.com.
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