To the Health of a Practice
Physicians may have narrowly escaped a 27.4% reduction in Medicare reimbursements with a last-minute doc fix, but the same dilemma will continue to be a strain on the medical community. According to Richard C. Stooksbury, CPA/PFS, CFP, Senior Manager at Decosimo, now — more than ever — is the time for physicians to focus on their practices’ bottom lines with comprehensive practice reviews.
A practice review is less of a graded appraisal and more of an opportunity to fully evaluate a practice and build avenues toward cost-saving or revenue-generating opportunities. As Stooksbury notes, the squeeze of diminishing reimbursements and the direct relationship to reduced take-home pay are excellent motivators for such an assessment. However, any transition — from retirement and sale to the departure of a partner — presents another occasion to maximize the value of the practice and realize any hidden liabilities, such as outstanding accounts payable and long-term lease obligations.
“In today’s environment, the most important action is to make sure you are getting paid all you can for what you do. The process does not take a lot of work. It’s simply collecting the money you’re leaving on the table,” says Stooksbury. “Physicians who have completed practice reviews are getting the full value of their work, and that will go a long way to help with current pressures on reimbursement.”
Step By Step
Far from a complex and invasive procedure, a comprehensive practice review can be straightforward and effective. The first step is gathering the necessary data, including billing, coding and financial information on a month-by-month basis; a list of all employees, their dates of hire, duties and compensation; and tax returns for the practice and the individual physician if a sole proprietor owns the practice. The data is then verified through interviews and general observation.
Practice review specialists frequently discover areas where simple tweaks can create major savings. In examining the billing, collection and reimbursement systems, coding accuracy and the documentation to support the code emerge as crucial elements to maximize compensation. Since a single number incorrectly entered into a billing system can mean a significant difference in reimbursement, the practice review process will include a comparison between the coding and physician charts to ensure the two match.
Internal control processes or improvements may also be introduced, such as separating the responsibilities of writing checks and reconciling bank statements between two employees. As related to human resources and overhead management concerns, a practice review highlights overstaffing issues, efficient space use and the cost structure of employee health care.
Finally, to be the most effective a practice assessment should be tailored not only to the individual nature of each practice, but also to the unique costs of each specialty. A primary care practice that offers patients injections will have very different purchasing and dispensing protocols than an oncology practice that offers patients access to chemotherapy infusions. Often, adjusting the purchasing structure or the vendor will net a practice considerable savings.
To begin your practice’s review, visit www.decosimo.com/physicans and click “Contact Us.”