Physician Billing Partners has garnered a wealth of knowledge when aiding Physician Practice start-ups and expansions. We have put together a list of key points and tips to empower you in a successful start in operating your own practice.
1) Create a company to practice under.
Even if you plan to stay in solo practice, it’s not a good idea to do business as an individual using your SSN. Get an individual NPI number issued for yourself AND an organizational NPI number for your business. NPI numbers can be obtained here
2) Start the credentialing and contracting process earlier than you think.
Government payors have especially long processing times. Get started on the Medicare/Medicaid paperwork 6 months prior to your expected opening date. Start on the commercial payors at least 3 months prior. You don’t want to open your practice and not be able to accept some patients because of credentialing or contracting delays.
3) Decide on a good Electronic Health Record and start using it from your opening date. Choose one that is intuitive and fits your clinical style.
Don’t skimp on this. If it’s too complicated to use, doesn’t have all the features you want, or forces you to change your processes too much, chances are you won’t use it well, and may end up having to switch later. Most good software packages offer hosted versions that are offered at an affordable monthly rate versus having to make a capital purchase up front. The scheduling and billing software are not as important as most packages do the basics very well - but you do want ones that will integrate with the EHR. Look for software that allows you to add those practice management modules later as you grow.
4) Outsource your billing.
Billing companies charge a percentage of your monthly receipts, so if you are not earning much in the first few months as you build your practice, your billing expenses will remain small. You don’t have to pay a fixed salary, or have staff management headaches. Also, the billing and coding knowledge of the billing company will get you started with good coding habits and advise you on how to maximize your reimbursement. Billing companies can provide billing software for you, or work remotely off your software if you already have some installed.
5) Start working with your Billing Company early.
They can be a resource for you on many practice management concerns, and can provide samples of forms you may need such as your patient intake form, privacy and patient financial notices, and encounter forms.
6) Manage your practice like a business.
You practice medicine but going solo or in partnership also means that you’re running a business and you need to manage your practice like one. Identify the key financial performance indicators – the financial red flags that will alert you to financial trouble or give you comfort that you’re doing ok. Your financial performance indicators should be reviewed weekly to ensure you’re on track to be profitable, you can pay your bills ontime, your making wise business decisions, and your financial resources are being used productively. The key financial performance indicators should include:
Days in Account Receivable – how long does it take you to get your money
Reimbursement rate – are you under or overcharging and does your fee schedule need attention
Carrier mix – this is an important indicator. You need to ensure that you are not overexposed to patient groups (e.g. Medicaid) that have low reimbursement.
As you grow you ‘ll need to manage the carrier mix to ensure you have a profitable mix.
7) Manage your cashflow – know what your breakeven cash expenses are and what you need to bring in on a monthly basis in cash.
It can take anywhere from 30 days to 90 days to collect on all your charges so there will be a delay in cash received, however your cash outlay will likely exceed it so you’ll need to have a source of credit to float you for about two months. Approach your local bank with a business plan and cash forecast and request a line of credit that is at least one months worth operating costs – preferably two months.
8) Optimize your workflows
from the appointment being scheduled through to the billing of the charge and ultimately collection of the payment, you need to optimize the workflow to reduce the cycle time from date of service to payment of patient responsibility. Workflow cycle time – the time it takes to get paid starts at the time of service and ends with the final payment by secondary insurance or patient. The shorter you make the cycle time, the quicker you’ll get paid and you’ll increase the collectability of your AR.
9) Utilize Information Technology
using technology to enable your workflow and provide you with information in real time will increase your productivity and help you control your business. Two areas of information technology you need to consider are: business intelligence/practice management and workflow automation. Business intelligence (BI) systems provide you with information to manage your practice and include dashboards that highlight your key performance indicators (financial and practice). BI mines the data that resides in various repositories (e.g. Electronic Health Records, Practice Management systems, Accounting Systems) and analyzes the data providing you with actionable information to run your business.
Workflow automation products include the use of ubiquitous technology such as smart phones and tablet computing running on a wireless environment in your clinic that allows you to capture your chart notes and skip the step of transcribing and allows you to integrate directly with your EHR (again reducing revenue cycle time). Other workflow automation includes document management systems and collaboration tools to share documents within your office as well as with your outsourced billing office.
10) Realize that you are running a business as well as a medical practice.
Understand what your core competencies are – practicing medicine, and seek out excellence in the other core competencies you need to run your practice such as outsourcing your revenue cycle management to a professional revenue cycle management company, implement business intelligence tools so that you get good information on the performance of your practice, and automate your workflows so that you can spend more time providing excellent service to your patients.