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Your Top Questions Answered
Closing a Practice; Collaborative Practice Agreements; Workers' Comp; Collection Ratios; Salaries for Supervising
CLOSING SHOP
QUESTION: Do you have any information or checklists that might be helpful as we close a practice? I want to be sure we cover all of our bases regarding patient records, legal concerns, and so on.
ANSWER: I am very sorry to hear this news. Take a look at the Retirement or Sale of Practice Checklist the Texas Medical Association offers online at http://www.texmed.org/Template.aspx?id=2198. Here are some other standard considerations:
To close, you need to review all the logistics based on your practice's situation. For example, what will you do with your building? Do you rent, lease, or own it? If you rent, you need to notify your landlord of your intentions. If you own, do you plan to sell? Find a real estate agent, and start your preparations.
Also determine what you need to do to move your equipment, files, and furniture - and where you will put them. If you lease your equipment, notify your leaser. If you want to sell the equipment you own, find a seller, have a yard sale, put your equipment up for sale on eBay, or find another way to locate a buyer.
Give your staff adequate notification. You'll want to retain at least one staff member for 30 to 60 days after the close to follow up on your final outstanding accounts. Most physicians find a part-timer for 60 days to be adequate, but it depends upon the volume of your outstanding accounts.
Remember that a physician has an ethical obligation to notify her patients when she moves or closes her practice to allow them to obtain copies of their medical records or have their records transferred to another practice. Ideally, a physician should notify each patient by letter at least 60 days in advance of closing. Often, a physician supplements these letters with a published notice in the local newspaper scheduled to appear on three or more occasions.
The American Medical Association's Ethics Opinion 7.03, Records of Physicians Upon Retirement or Departure From a Group, states in part: "A patient's records may be necessary to the patient in the future not only for medical care but also for employment, insurance, litigation, or other reasons. When a physician retires or dies, patients should be notified and urged to find a new physician and should be informed that upon authorization, records will be sent to the new physician. Records which may be of value to a patient and which are not forwarded to a new physician should be retained, either by the treating physician, another physician, or such other person lawfully permitted to act as a custodian of the records."
Finally, if you have admitting privileges at a hospital - and especially if you take emergency call - you'll want to give that hospital at least 90 days notice, if not more.
COLLABORATIVE PRACTICE AGREEMENTS
QUESTION: I am an APN in a small town where I have worked side by side with my husband. My husband passed away recently, and now I am in a pickle. I know I must have a collaborating physician, and I am working on obtaining one in my
area.
I don't have a "Collaborative Practice Agreement" form, and I don't know where or how to obtain one; I am currently referring my patients to several area doctors who have agreed to help me "as long as you need it." However, I am fully aware I must get a full-time MD, and I must have some type of legal "Collaborative Practice Agreement" drawn up before I can open my doors again.
I am 73 years old and in excellent health; I only want to work a few more years before I sell this practice outright. Can you help me?
ANSWER: I am sorry to hear of your loss. I'm sad you have to be worrying over such details at this time.
If you do a quick search on Google for "Collaborative Practice Agreements," you'll find several versions free to download. You'll want to customize them, of course, but the samples you will find give you a sense of what you need to cover. It also might be worth it to hand this off to an attorney familiar with the healthcare law in your state to look over your draft of the agreement or offer another. If you don't know an attorney, your local hospital should be able to tell you the name of a lawyer it has used for legal aid.
Outside the scope of your question, I have to say that, from an outsider's perspective, it seems that now is a good time to sell the practice. In a rural community, you might have a hard time finding a physician willing to partner with you without asking for an immediate stake in the business.
Talk to some of the doctors who are helping you out now. You can make it part of the terms of your sale that you will draw a salary (and work) for the next three years at least.
But, from an emotional standpoint, right now may not be the best time to make such a decision. Please obtain the counsel of local advisers if you decide to go down the latter path.
COLLECTING WORKERS' COMP
QUESTION: What can we do when workers' comp does not pay after it has already approved the services rendered? What would be the best way to collect? I have several cases like this, and it's becoming a headache.
ANSWER: I think the answer lies in why the representatives say they are changing their minds.
If the eventual denials all come for the same reason, have a look at the workers' comp rules in your state (these are state-based programs), and determine whether the denials match the rules. You should be able to find them online; just do a Google search for "workers' compensation" and your state name. If the workers' comp denials you are receiving are legitimate, look for ways to change your processes for treating these patients based on what the problem turns out to be.
Visit our Web site at www.PhysiciansPractice.com and search under "workers' compensation" for more information.
DETERMINING COLLECTIONS RATIOS
QUESTION: We would like to know what the average collection ratio of a practice's total billed charges should be. For example, in September 2006, we billed $250,000. After insurance payments and adjustments and patient payments, $23,000 remains uncollected. The physician thinks this is outrageous. What is the average expected loss or uncollectible amount for most practices? The physician is even thinking that maybe we should outsource our billing.
ANSWER: The challenge in answering your question directly is that it is difficult to evaluate collections based on billed charges.
Look at it this way: You can bill $2 million for an appendectomy, but even if you collect everything you are owed from the payer and the patient, you aren't going to get anything close to that amount. So it would obviously be unrealistic for your physician to expect you to collect it.
On the other hand, you could charge $5 for an appendectomy, and your physician would be just tickled pink to see collections at 100 percent - even though he'd be losing money like crazy.
So I generally encourage folks to gauge their success based on adjusted collections. That is, what did you collect out of what you were actually owed (not out of what you charged)?
To obtain some hard data, you can purchase the Medical Group Management Association's "Cost Survey: 2006 Report Based on 2005 Data" by visiting the online MGMA Store at www.mgma.com.
According to the MGMA, the gross fee-for-service (FFS) collection median rate is 41.6 percent (what you collect of what you charge). The adjusted FFS collection median rate is 93.98 percent (what you collect of what you are owed).
If the physician feels a problem persists, it is important to identify where mistakes are happening before outsourcing. If processes outside the billing office are the hang-up (like verification or late documentation), outsourcing your billing won't change things. Your problems will still be in-house.
SALARY FOR SUPERVISING
QUESTION: I have a side job as the medical supervisor of a college health clinic. I spend three hours a week on site seeing patients, and I supervise three nurse practitioners. Each sees 15 to 20 patients a day. What do you think is fair compensation for this work?
ANSWER: There are several ways to look at your compensation:
- Base it on the relative value units (RVUs) you produce. You'd take a baseline salary, and then you'd pick up a bonus if you exceeded a certain productivity benchmark each quarter.
- Calculate what your full-time salary would be at your other positions, and extrapolate a percentage from there.
- Given that supervising the NPs takes away from your ability to devote time to patient care and your own productivity, it's worth arguing that you need some compensation for that, too. You can name a price based on an hourly rate (figured by taking what you get paid per hour for clinical work and then charging some percentage of that for your supervisory work). You could also set a flat fee (determined by what you feel makes the work worth it to you, basically). Or you can base your fee on a percentage of the revenue the NPs generate. The last is the least risky for the employer, since if you can make the NPs more productive, you all win.
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