Eight issues you should discuss with your administrator every week.
by Gil Weber, MBA, Consulting Editor
Adapted with permission from Ophthalmology Management
© Copyright, 2000. All rights reserved.
I remember seeing a cartoon with a caption that read, "Have you hugged your teddy bear today?" Your figurative teddy bear is your practice administrator. Of course, I'm not suggesting that you give your administrator a physical hug, but rather that you meet with her regularly to conduct an internal and external practice systems check in your office.
In this article, I'll recommend eight important topics to discuss at your meetings.
The top eight
These are the areas you should examine:
(1) Accounts receivable, accounts payable. Your administrator should already monitor who owes you money — how much, and for how long. The problem for many practices is that "how much, how long" has become "too much, too long," even in the 27 states that have prompt payment regulations. Nip this problem in the bud.
Ask your administrator to pull your third-party provider agreements. Create a payment matrix that indicates the time frames within which each payer has agreed to settle your claims. Then review the amounts owed by each, paying particular attention to the amounts outside those contractual understandings. If a payer has not performed to contract, don't hesitate to pursue it. It's your money, not theirs.
If you're in one of the 27 "prompt payment" states, remind the payer of its contractual and mandated responsibility. No matter which state you're in, if friendly conversations and correspondence don't fix the problem, copy the correspondence to your elected officials and state regulators. Make them aware of the problem and ask for help.
Also, copy your state society, local and state medical societies and your political action committee. Gather allies to exert high-level pressure on the payers.
Unmanaged accounts payable can cost you money, too. Suppose your group has a deal with suppliers for surgical packs or intraocular lenses, or for use of an ambulatory surgical center. Or maybe you're in a purchasing cooperative for optical dispensing supplies or you've cut a deal with an optical lab guaranteeing a flat fee for various types of lenses.
Your fee structure is built, in part, on the cost of materials reflected in the discounted purchasing. Those discounts are extended to you in exchange for volume purchasing and prompt payment, which go hand in hand.
If you pay late, you'll lose the discount. Suddenly your cost structure changes, perhaps significantly. Maybe the reimbursements you were receiving from a certain vision plan no longer make sense. Maybe without the anticipated discount your facility fee costs wipe out any profit from the professional fee.
So, as you can see, it's essential that you regularly review outstanding financial commitments and make sure you're taking advantage of available purchasing power. You expect HMOs and vision plans to pay you on time. Your vendors expect the same.
(2) Referral hassles and delays. First, let's discuss primary care physicians (PCPs), other ophthalmologists and optometrists. One common and frustrating administrative problem centers on patients who come to you without mandatory referrals or with expired referrals. Or perhaps Mr. Smith has a valid referral but it doesn't cover all the care he needs. And Mrs. Jones has one that covers everything, but the plan won't pay you because the PCP didn't send a duplicate copy of the paperwork. It doesn't matter who's at fault. The bottom line is the same — payment delay or denial.
Ask your administrator about the PCP and insurance plan "hassle factor." Who or what is forcing the staff to clean up the messes created by others?
Inquire whether there are ongoing problems with specific referral sources or if the problems seem endemic to certain HMOs or vision plans. If certain providers habitually fail to send proper authorization, your administrator should initiate the first contact and try to resolve the issue amicably. If the problem is endemic to a particular payer, it may require a call or letter from you.
You must be aware of the referral problems coming from other doctors. Referral sources will probably change during the year (new physicians, new plans), so discuss this issue at every meeting. Then take action to solve the problem.
What happens when the referring doctor gets it right but the patient doesn't? Because your (non-emergency) responsibility to provide care and your payments for services are tied to referrals, it's essential that you see only those patients who have met their referral obligations under the health plan's mandated protocols.
Prevent possible problems before the patient gets to your office. Talk to your administrator and be certain that there are systems in place to prevent patients from presenting without their documentation and being upset and embarrassed.
You may find that it's necessary for your office to call a patient the day before an appointment to remind her to bring the mandatory paperwork. Avoid having to call the referring doctor for another copy of the referral while the patient is waiting in your office — that diverts staff attention from other important work.
Do you run risks when you play "hardball" and refuse to see patients without the proper paperwork? Yes — but it's your money. Don't let someone else's rules cost you money or throw your practice into chaos.
(3) Issues in the optical shop. If you participate in third-party vision plans, your opticians and front office staff encounter patients who don't understand their benefits. They argue about what's covered, and complain about unanticipated, out-of-pocket expenses. It's irritating and frustrating for staff and patients — and it's preventable.
Unfortunately, HMOs and vision plans don't always educate their patients well. The burden falls on your staff's shoulders. Your administrator should monitor complaints coming from the optical shop, and discuss them with you regularly to preclude problems.
One way to handle unrealistic expectations of benefits may be to pre-confirm optical benefits when scheduling an appointment. If a patient does have optical benefits, it's important the patient understands up-front the limitations and exclusions, and that there will be out-of-pocket charges if the patient she exceeds those plan-defined benefits.
Another option may be to ask the HMO or vision plan to give you a sheet you can show the patient which explains standard optical benefits and out-of-pocket responsibilities. This may not work for all your vision plans, since some will have multiple benefits programs. Or you may need to refer the patient back to his plan sponsor for "official" explanation if yours isn't enough.
Though you might not know the specifics of each benefit plan, you must comprehend benefits and coinsurance issues, as well as misunderstandings occurring in your practice. Remember that with open enrollment periods twice each year, some of your patients will be switching insurance companies or will have changing benefits within existing insurance plans, so discuss these matters often.
(4) Appointment lead time. Many managed care agreements have provisions whereby the provider promises to have various categories of appointments available within stipulated time frames. For example, you may agree that nonemergency medical/surgical appointments will be available within 7 days. Or you may be required to provide routine vision exams within 2 weeks.
It does a payer no good if you're inaccessible due to an overbooked schedule. So monitor appointment lead time to be certain that you're not in default on any provider agreements.
If discussions with your administrator reveal that you're out of compliance, take action before patients complain to their insurance plans or it's revealed in a quality assurance audit. It may be necessary to add hours or staff to reduce the backlog.
That's not necessarily bad, assuming your schedule is full of patients from plans that pay reasonably and promptly, and that the backlog comprises patients from similar plans. However, if your backlog results from poorly paying capitated programs or a plan that's fraught with administrative hassles, maybe you need to dump a contract.
(5) Utilization. I hope you're already discussing these topics with your administrator: What services did we provide last week? Who provided them? What supplies were consumed in delivery of those services? On average, how much time did we devote to each procedure and patient? Are we balancing our resources with service demands?
At a minimum, collect and discuss this data by CPT code and by plan for your top 10 procedures in terms of volume and revenue. Look for trends, particularly in capitated plans. If you have benchmarking data, preferably local rather than national, use them to see if your practice might be perceived as an "outlier." Or see if certain procedures seem to be done more often in your practice than in the community at large.
A knowledgeable health plan manager understands that there's nothing inherently wrong with being an "outlier" if it's explainable — for example, you're sent more surgeries or complex cases because of a good reputation. But if you're an unexplainable outlier, you're at risk of panel deselection. So be pre-emptively armed with information to justify your status or to make appropriate changes, if necessary.
(6) Cost per service or patient. Discuss this issue when you discuss utilization. You must have some sense of these numbers, or you won't know if your fee-for-service or per-member-per-month payment is above or below your overhead. How can you know if an existing contract is worth maintaining or a new contract is worth taking?
Study your number of full-time equivalent (FTE) employees. Some physicians have little staff and do most or all patient work-ups themselves. Others depend on technicians and delegation. In the right setting, with the right people, either system can work. In the wrong setting, either system will probably fail.
Regularly review staff resource allocation with your administrator. Inefficient patient movement from reception to history, for example, makes it more costly for you to see any one patient and to increase your daily patient volume.
Many adjustments to FTE employee allocation are available. Each will depend on an individual practice's needs and staff capabilities. Perhaps additional cross-training? You'll discover some options in your regular meetings. I also suggest that your administrator join the ASOA Practice Administrator discussion forum. It's a great resource.
(7) Local managed care activity. The managed care environment is changing with ferocious speed. If you're not on top of what's happening, it could cost your practice dearly.
At least weekly, discuss managed care news with your staff. What's the local "buzz" on payment hassles? Which plans are adding or dropping benefits? Be aware and be prepared with an action plan and with answers for your patients.
(8) News and nonsense your patients will ask about. Every week seems to bring some TV or press announcement that your patients will ask about. As I write this, the "buzz" is that scientists have developed an implantable microchip that may be able to restore Stevie Wonder's vision. True or not, it's a "hot" story to the lay public. Other recent news includes horror stories of laser-assisted in-situ keratomileusis (LASIK) cases gone bad or of the great "savings" on LASIK in Canada.
The validity or practical reality of any news announcement is less important than having an effective plan for responding to patients. You and your staff must know which topics may come up and also how to answer patient questions. Every week, discuss with your administrator the latest in technology and the latest "hype." Then implement a plan for disseminating information to staff (in a weekly meeting or with printed materials) so that they'll be aware of recent news.
Prepare background information for staff and offer suggestions on appropriate responses (or to whom certain questions should be directed). Encourage staff to bring up anything they hear. Nothing is too ridiculous, because your patients probably will have heard the same thing and one of them will ask.
Keeping in touch
By dedicating a regularly scheduled hour to "preventive maintenance," you'll take important steps toward preserving and increasing profitability in an ever-more-challenging managed care environment.
Although you may think you don't have the time to deal with this "business of medicine" stuff, make the time. Your survival depends on it.
Gil Weber, Ophthalmology Management's consulting editor, is a nationally recognized author, lecturer and practice management consultant to the managed care and ophthalmic industries, and served as managed care director for the American Academy of Ophthalmology.