All MHM clients are very dedicated individuals.
Having spent approximately 15 years of training and finally becoming medical professionals, they go on to work incredibly long hours.
They do so because they actually love what they do.
All at some point all have taken the decision to start a private practice.
It’s unlikely they would be my clients otherwise if you think about it.
They start a private practice because they wish to make more money doing what they love anyway.
To have any other objective is either (a) silly or (b) engaging in self-delusion.
There is no shame in admitting you start a private practice to make money.
As I’ve blogged many times previously a private practice must be run as a business – a business with more than a social conscience but nonetheless still a business.
Yet, sadly, many consultant surgeons make the mistake of believing their practice will grow and make them rich if they continue doing what they love to do.
Sadly that is not true for doing what you love seldom leads to long-term financial success.
And that means you must measure the performance of your practice.
This is the point at which the private consultant surgeon realizes he/she must understand financial analysis i.e. the numbers.
It’s not all that complicated. Supplying data to your accountant every year isn’t the same as understanding the numbers behind your practice though.
Let me give you a real example.
I was contacted recently by an established medical professional. He claimed to be working all the hours God sends but said he was always broke.
It didn’t take long to work out why.
The first good indicator was a complete lack of financial analysis other than a tax report a little over one-year-old. No debtors ledger was available.
He didn’t have any real idea how much he was owed.
Indeed it transpired both patients and insurance companies were only invoiced monthly.
So I took the last six months’ worth of clinic lists and checked how many had or had not been invoiced.
Quite a lot had not.
I did the same with surgical episodes with the same result. This was followed by an investigation into how much had not been paid even if invoiced.
But it was also a case of adding up the total revenue generated for each month, calculating the total costs (room rental, monthly indemnity insurance premiums, secretarial costs, etc). Then one was subtracted from the other.
Even if any type of provision was made for tax liability was ignored the results were not encouraging.
The really bad news is that the consultant looked very blank when I asked which percentage of patients were referred to him from which source.
It was clear this particular consultant had no real idea of how his practice or business was performing.
And that was and still is a very dangerous place for any business to be.
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Recently, I was talking to one of my clients.
She was unhappy with the fees she was getting from insurance companies.
Sadly she was also unhappy about how often she got paid too.
Therefore she wanted me to contact all insurance companies and do something about it.
Unfortunately, not only had she agreed on her fees, she had agreed on the payment terms too.
When she applied for recognition with the various insurance companies towards the end of 2018, she thought to give it a year and she would be able to increase her fees.
Sadly, this was never going to happen.
Certainly, she could ask the question but it was doubtful she would get an increase.
And that’s precisely what happened.
There is not a lot she can do about it.
Nor can I.
So instead she wanted the payment terms amended.
Two of the insurance companies paid her within a few days.
Others paid her once a week.
The remaining insurance companies paid her monthly.
She wanted ALL insurance companies to pay her within a few days.
This is never going to happen either.
The reality is, just as it is with fees, the insurance companies are in the driving seat.
They are not going to amend their payment terms.
Even more so when the consultant agreed to the terms originally.
I’m all for arguing with insurance companies.
But I won’t pick an argument that I know every well I won’t win. There is no point.
If you agree to your fees and your payment terms, you pretty much are stuck with them.
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Most consultants when they first start a private practice, consider how best they can set their fees.
In the case of self-funders, there is nothing to stop you charging any consultation fee you like.
Save of course if there are other consultants in your area then their fees will influence that which you charge.
Effectively it is up to the patient whether they chose to accept that fee or not.
In reality, in the case of an insured patient, it is not the consultant who sets fees.
It is the patient’s insurance company.
Consideration of fees for an insured patient should be viewed from two distinct areas:
1: Consultation fees
2: Surgical Fees
Consultation fees (for both initial and follow up) will be agreed at the point of recognition by the respective insurance companies of the medical professional e.g. consultant surgeon, anesthetist, etc.
The insurance company with whom your patient is insured will always set surgical fees.
You may feel the fee is too low and therefore try to charge more.
Almost certainly your invoice WILL be rejected.
Keep sending invoices in for fees greater than that allowed by a particular insurance company and you run the risk of being de-recognised.
It’s not a good idea to be in such a position.
Whether it is right or wrong for insurance companies to hold such power over the setting of surgical fees is for another article.
I have very firm views on it but at this point, the stark reality is that the insurance companies do hold most of the cards.
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I had a discussion with one of my clients a few weeks back.
She was very firmly of the opinion patients should able to contact her secretary or her practice at any time of the day.
Respectfully, I disagree.
Patients may indeed be demanding on occasion but the idea of 24/7 is a step too far.
For example, MHM opens it’s phone lines from 7 am Monday to Friday. It closes it’s phone lines at 8 pm Monday to Thursday and 1 pm on a Friday.
However, during those hours the telephone is answered. And answered quickly. None of this “press button one for payments, press button two for appointments, press button 3, etc!
MHM never has done that and it never will.
Instead, the phone is answered.
Interestingly on more than one occasion, I’ve had a caller say to me “Oh a human being has answered the phone!”
Outside of those hours, there is an answering machine with a message stating when we are open and if a message is left we’ll get back to you within the hour.
There is also an answering machine if all the phone lines are in use. Calls are returned within the hour.
Not one single patient has ever complained about that.
Patients are human beings.
They are also human beings concerned with their health.
That’s fairly obvious but worth repeating.
It’s worth repeating because they deserve to be spoken to and not forced to just process their health inquiry electronically.
None of that means I’m against online bookings. Nor am I against using an answering machine. Far from it.
But only outside “normal” working hours.
Once patients are aware of when they can contact a practice and if they are confident, they will be looked after they will be happy.
That is precisely what I said to my client.
Sometime later she called me and agreed.
There is no requirement for 24/7 access.
But there is a BIG requirement for patients to be able to access her practice efficiently during “normal” working hours.
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I really had to laugh at one of my clients.
Great guy with an absolutely dry sense of humour.
He’s also from what I call the “brain the size of a planet” school.
He was explaining his requirement for multiple CCSD codes to be pre-authorised in respect to a procedure he intended to perform the following week.
He explained why, due to the patient’s condition, he wasn’t at all sure which procedure and/code he would actually perform.
There were multiply big words in his explanation which I couldn’t even pronounce let alone spell in a blog post.
It would only be in theatre, when he would know the procedure he was going to perform apparently.
Have you any idea how much of his explanation I understood.
None of it.
Moreover, I don’t need to.
All I needed to understand was as follows:
2. what are the proposed codes?
From that, I could call the relevant insurance company and confirm the patient details.
Then I could advise them of the codes in question, the date of the procedure and what I’d do post-procedure.
After the procedure, I’d have the consultant tell me which codes he performed.
Then I’d have him send me a letter addressed to the insurance company explaining why.
Following that, I’d have the theatre notes and the anesthetist’s notes sent to me.
And then I’d forward the whole lot to the insurance company.
And that is precisely what happened.
Once I’d done that, the insurance company agreed for the codes to be invoiced, in the right order and at the right total fee.
It’s even better now for the MHM client is being paid next week.
One happy consultant surgeon.
Skip forward to yesterday, when the consultant called me.
He’s very grateful he’s getting paid and in full too.
But he couldn’t understand why I could do all that without understanding what the codes actually meant in medical terms.
Basically, because I don’t need to know.
And I’m certainly not prepared to spend the next 12-15 years at med-school learning all about surgery until I do
No, all I need to understand is what codes, when and then I’ll tell you how much.
The consultant made me smile though when he thought it a much better idea if he stuck what he did best and let me stick to what I know best in the future.
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The old nutmeg has come around again!
This time it was a call from a consultant who was so fed up with DNA, he decided he’d sort it.
Whilst he was at it, he’d stop the constant problems he’s having with excess deductions too.
And, I’ll wager, DNA and excess are a pain in your ass too.
From January 1st, 2020 all non-insured patients were required to pay in advance.
Those who were insured were required to leave card details so in the event of any excess the card would be automatically debited.
Sadly I see this all too often when I go meet a potential new client.
Many of the issues he faced have their source in a previous decision.
The previous decision itself could well be based on a decision before that one even.
One of those decisions in the chain was almost certainly not thought through.
But he had indeed stopped the problem with self-funding DNA patients
Because there weren’t any self-funding patients anymore.
Clearly, he hadn’t thought through the consequences of his decision.
He had reacted instead.
Yet the reaction caused another problem i.e. no more self-funding patients.
That was unfortunate as 23% of the practice was derived from self-funding patients.
The above example is indicative of the cause of many of the issues that particular consultant faced with his medical billing.
It was relatively easy to put the self-funding issue right because I’ve faced that specific challenge a few hundred times previously (email me for how).
Getting the consultant to change his mindset though was much more difficult.
He did change though because he had seen a 100% reduction in self-funder outstanding invoices.
He changed not just because I knew the answer. He changed because he realised when I faced that issue previously, I’d allowed myself sufficient time to give it serious thought and consideration before reaching a decision.
I’d implemented a course of action that didn’t put patients off by asking payment in advance but did reduce the number of outstanding self-funder invoices.
And that is why it is important to put the time aside and think through an issue before deciding on a specific course of action.
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A CCSD code is used by insurance companies to identify a medical procedure.
An Orthopaedic surgeon, for example, understands what a Multiple arthroscopic operation on the knee is.
But it’s a lot to put on an invoice every time you produce one!
Put the CCSD code W8500 on the invoice instead. It will identify that specific procedure.
So where do you find a code?
A CCSD code is found on the CCSD website: www.ccsd.org.uk
The Clinical Coding and Schedule Development Group (CCSD) consists of representatives from the five major healthcare insurers – Aviva, AXA-PPP, BUPA, Vitality and Simply Health.
The group’s main purpose is to maintain a common standard of procedure codes. The codes reflect current medical practice and are published as the CCSD Schedule.
The various insurance companies will, therefore, recognize such codes.
Whilst the example W8500 above will be recognized, it does not come with a suggested fee.
The fee payable for each code is up to the individual insurance company concerned.
To find the correct fee for the code, the insurance company concerned should be contacted.
When an invoice is then sent to the insurance company for payment, the code should appear on the invoice. Both the code and the fee will match that expected by the insurance company.
If alternatively, you do NOT use CCSD codes payment will be substantially delayed if made at all!
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This is actually happening now.
MHM, on behalf of a client, recently invoiced a private medical insurance company for a T7915 performed on January 23rd.
Per normal, MHM checked the fee schedule of the insurance company and confirmed the correct fee was £750.
Only then was the invoiced raised for £750
It came as a surprise today however to see a lesser amount of £620 has been paid.
It is even more surprising to read on the remittance the reason why it is less!
‘We cannot pay this amount in full as we do not cover consultations made within 10 days of a surgical episode”
Yes, I know you don’t.
But the fee is for the procedure alone and nothing to do with a follow-up consultation.
Moreover, £130 is the fee for an initial consultation and not a follow-up consultation.
So I’m currently on hold to the insurance company concerned and have been for the last 35 minutes waiting for them to even answer the telephone.
In fact, I’ve been on hold so long, I can draft this blog post before they even get round to answering the phone!
If remittance advices aren’t checked, insurance company errors like this will be missed and you will be out of pocket.
This time £130 out of pocket.
Further, I’m not in the slightest bit interested in hearing a recorded message telling me how busy an insurance company is.
Nor am I interested in being told: “our team is working hard to get to you”.
What I am interested in is how an insurance company can make such a basic mistake as this?
When will the insurance company answer the phone so I can sort this out?
And how many more mistakes are there like this where ultimately the consultant pays the price and is out of pocket?
This is why it’s SO important to check every single payment made to you.
p.s. after 42 minutes the call was answered. It will now take 15 working days to respond to my query. THREE WEEKS!!!
But I’m told it won’t take 3 weeks, it takes 15 working days.
I give up.
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The normal item when I get asked to review a consultant’s invoicing process is the potential for weakness in the area of records on his/her part.
Sometimes, I’m presented with a carrier bag full of invoices, remittances, and receipts.
My favourite though remains the cardboard box stuffed full of pieces of paper.
That was the filing system.
Close examination of the pieces of paper in the cardboard box suggested they were invoices.
Many in fact did not have an invoice number on them.
Indeed the majority did not actually have the word INVOICE printed on them either.
That can be a problem when I come to reconcile payments against such payments IF they’ve been paid at all.
That is important because it’s difficult to contact an insurance company and discuss invoices for one individual patient if the invoice does not show a specific invoice number.
In fact, the only way you can tell them apart is if the values are different and they are on different dates.
It’s always best to have a unique reference number on an invoice i.e. an invoice number and a date.
And don’t forget to print the word INVOICE on it.
At least that way, you stand a chance of knowing which ones have or have not been paid.
Then the hard part starts as you begin to look at what is or is not on the invoice and get a feel for what was likely to be paid anyway and what was likely to be rejected due to total lack of detail.
Normally this is followed by a request to see clinic lists and the process of obtaining the right data off the clinic list for submission to the insurance company.
There is also an additional cost to not keeping accurate records.
When it comes to tax time, it’s going to take a lot longer – and thereby cost much more – for your accountant to do the necessary computations.
At worse you could end up paying too much tax.
All because records aren’t kept correctly.
Please keep accurate records if only because it means you stand a much higher chance of being paid!
Please email me if you want details of the bare minimum records you should be keeping for invoicing purposes.
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This issue came up recently with a consultant surgeon.
What is the difference between benefits and fees and how are fees accounted for against a benefits package?
Consider the total benefits payable under a patient’s policy. For example, the benefits payable is £100.
It could be more. The fees mentioned below could be higher too.
Against such a benefits package, fees are deducted thus:
£20 is paid out. The total benefits figure reduces to £80.
Subsequently, the patient requires surgery. £50.
This is also paid.
The accumulator reduces to £30.
Finally the hospital tenders their account: £20. The gasman submits his: £10. The benefits accumulator, therefore, reduces to ZERO.
The benefits package is equal to the fees.
If the initial is £21, the surgery £51, the hospital £21, and the gasman £16 then the total fees = £109. Against a total benefits package of £100.
Thus, if fees exceed the total benefits a shortfall will be created.
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I spent some time yesterday looking at the invoicing of a consultant surgeon.
I noticed that the invoices for initial consultations going out to one particular insurance company were being charged at exactly the same fee as for follow-up consultations i.e. £125 each.
Instead, they should be £175 for initial and £125 for a follow-up.
So… £50 multiplied by the number of errors spotted so far over the first month I’ve checked (9) = £450!
The bad news is that this has been happening for, so far as I can tell at the moment, for at least the last four months.
Potentially, £1,800 worth!
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A couple of examples recently where consultants who have tried to base their fees on the best rate available.
Take the consultant who realises that PMI company Num 1 pay £300 for a procedure whereas PMI company 2 pay £400.
He decrees he will charge PMI Company 1 the PMI Company 2 rate.
Right up to the point PMI company 1 receives the invoice for the higher amount.
They will decline to pay that fee.
Most likely they will shortfall it.
But, replies the Consultant, no problem.
The patient is ultimately liable for any shortfall.
I know of one consultant who even puts on his website “we use PMI Company 2 rates to calculate our fees and therefore there may be a shortfall which you will have to pay”
Yes, the patient is liable for a shortfall BUT not when the consultant is fee assured he isn’t.
Most likely a letter addressed to the Consultant will arrive sooner or later from PMI Company 1 pointing out that such “inappropriate billing” is not acceptable.
Carry on doing it and recognition is at risk.
It’s incredibly similar to unbundling.
Continue doing it over a number of months and for sure eyebrows will be raised.
Even if there is no “fee assured” status PMI Company 1 will be well aware of regular and consistent charges that are in excess of their published fee schedule.
Notwithstanding the above, of course, consultants want the best possible fee for a procedure but attempting to obtain the same by “inappropriate billing” is not the smartest way to go about it.
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Every time I give a presentation to consultants wishing to start a private practice it’s pretty much guaranteed, I’ll get asked about having a website.
In particular, I’ll be asked – do I need one?
Short answer: YES!!
Ah! – Comes the response from a fellow presenter with a very well established practice – I don’t have one.
I don’t need one.
That may be so because he is well established.
But for someone just starting out being on the private hospital’s website, just being on the PMI website or on a directory of consultants is not enough.
Neither is, although still a big source of referrals, having patients referred only by a GP.
Patients are very switched on.
They will trawl the Internet looking for whom they consider being a suitable surgeon with whom to book a consultation.
They may still ask their GP for an opinion. And then be concerned if the GP recommends another surgeon because the surgeon is a friend of the GP.
What does the GP do if he doesn’t know a suitable surgeon?
Yep – he goes to the Internet too.
The bad news is that it is not just a case of building a website.
I call it the “build it and they will come” principle.
Websites need to be maintained and refreshed – at least every six months.
Then there is the question of social media.
MHM doesn’t build websites nor do we manage social media for its clients.
It’s far too complicated.
We just pass on the requirement to one of our partner organisations.
Based on the analysis of MHM clients with a website and those without, it is pretty clear those with a website see more patients.
You sure you can’t be bothered with all this Internet stuff??
How many of you still rely on GP referrals only?
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At a medical conference recently a friend of mine was discussing the future of the private practice industry and what lay ahead.
My colleague shared the view that the “younger” newly appointed consultant is more adaptable to the direction of change in the private practice.
Thus they were a major driver in how the industry moves forward.
I say they are entrepreneurs.
Let me explain why.
Certainly newly appointed consultants cannot look forward to a hefty NHS pension at the end of their career.
The younger consultants are also facing a squeeze in fees from private medical insurance companies.
Not to mention they journeyed through a number of years to reach the position they are in now.
Yet they find themselves in an increasingly competitive market.
The market is more competitive than those who came before them.
The younger consultants are, so the evidence suggests, much more open to a business-orientated approach than before.
They have to.
In other words, the newly qualified consultant still has a mortgage to pay, mouths to feed, etc so is much more receptive to being an entrepreneur.
Say what you may but the fact remains the private medical healthcare environment is changing.
Just as the NHS healthcare environment is changing.
At the forefront of such changes will be the newly qualified consultant surgeon.
To adapt or take advantage of such opportunities as may arise, the new qualified are using technology as never before.
For example, they are much more amenable to the use of internet-based technology for marketing and PR.
They have to be entrepreneurial.
To prosper, let alone survive, they must invest in technology.
What is interesting is that they are more willing to do so than ever before.
To succeed with a private practice requires a significant amount of seriously hard work.
This is not to suggest the application of medical skills is not important.
But what is equally important are entrepreneurial skills.
Marketing, financial expertise, and business managerial skills for example.
These should not be assumed to be easy.
They now have to be acquired.
Consider that a consultant – newly qualified or otherwise – works within the NHS.
The NHS provides a support infrastructure including premises, secretarial support and, crucially, a constant supply of new patients.
In the private sector, none of these items will be supplied.
The consultant has to go out and actively find them for himself.
And that is why the consultant surgeon should be viewed as an entrepreneur.
Does anyone have a different view? I’d be delighted to hear from you.
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One of the most common remarks I hear from my guys is the number of patients they see in the NHS.
They literally have patients queuing up to see them.
Such a comment is normally followed by the opposite when discussing a private practice.
This, for me, confirms the absolute difference between the public and private sectors.
In the NHS, a consultant surgeon does not have to do much in order for patients to be delivered to them.
In the private sector, the opposite applies.
In the private sector a consultant surgeon, because fundamentally a private practice is a business, MUST attract a patient.
He must engage in pro-active marketing.
He must ensure it is known his practice is there.
First of all, however, he must comprehensively understand WHY a patient is choosing to go private.
It is not merely the case of a patient wanting to be seen private because he or she has private medical insurance.
It is understanding WHY the patient has private medical insurance. I, for one, dispute it is because private care is better than NHS care.
More likely it is because the private patient wishes to be seen quicker.
Even so, a consultant surgeon MUST engage in marketing.
If the patient can be seen at the private practice quicker than at an NHS location but the patient is unaware the private practice exists then all bets are off.
Therefore a marketing plan of some description is an integral part of a private consultant surgeon’s business plan.
And therein lies the reference to the first and absolute cultural difference between an NHS practice and a private practice.
In an NHS practice, patients will be delivered to the consultant surgeon without him even asking.
In private practice, patients will not just be delivered. They have to be attracted to the practice or more accurately to the business.
Note the use of the word BUSINESS for a private practice is a business.
This is not the time to discuss which marketing strategies will and do work best for a private consultant surgeon.
This blog is more concerned with highlighting that due to the differences between the NHS and the private sector, a private consultant surgeon has no choice but to have a marketing strategy.
Just as a consultant must have a robust infrastructure to support the business (secretarial support, invoicing, banking, etc), it is equally as important to have a marketing strategy.
Look at it this way, if any business does not have a regular number of customers or clients (in the case of a medical practice PATIENTS) then inevitably the business will not succeed.
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Taking ONE real-life client as an example.
Week ending Friday, January 31st: out of 15 consultations, 4 (four) came back with excess deductions £575.
So for a total of £2,500 worth of revenue from outpatient consultations £575 or 23% came back short.
Looking back to the same week in 2019, the number of excess was roughly half this.
The question as to why this is happening is not the concern.
The concern is what are you going to do about it.
If 23% continues the downside and potential loss to the consultant is significant.
There is only one real way to resolve this issue. Phone them!
Sure you can write letters and even email but nothing gets a response like a ringing telephone.
Most patients claim to be unaware of the issue but some think this is an issue between them and their insurance company.
In other words, the patient thinks they need to pay the insurance company.
They think the consultant gets paid in full by the insurance company.
There are variations on this but the crucial point for the consultant is not to establish why; its to ensure he recovers the excess efficiently.
But if telephoning the patient is the most efficient way to tackle the issue, it does not automatically follow its the easiest.
It has to be done professionally and with due diligence.
The long-suffering med-sec really won’t have the time to do this as professional and caring as she undoubtedly is.
I promise you faithfully, she won’t want to phone patients for money and will be thinking this is the least enjoyable part of her job.
There is an alternative though: do nothing.
Some patients actually will pay but this assumes they a) are aware of the excess and b) make it good straight away.
What if they don’t?
Assume it’s not £575 or 23% a week or £27.6k a year (£575 multiplied by 48 – not 52 weeks as you will have 4 weeks off a year).
Assume instead its 10% for 24 weeks (i.e. roughly half of the current numbers) and allows for some patients paying without being contacted.
The potential losses for the consultant, in this case, reduce to £13,800 per annum.
That’s a chunk of change in anybody’s book.
What’s significant is that at a number of client meetings recently I’ve asked what the client considered the biggest threat to the practice during 2020.
Most popular was a further reduction in private insurance fees.
That may indeed turn out to be a big problem.
But at this point, empirical evidence suggests its potentially leaving the back door wide open so to speak and enduring £13,800 worth of potential losses right off the bottom line.
I’d be really interested to hear from anyone who is seeing an increase in excess and their views on remedies.
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One of the most often asked questions is “how can I improve or increase my cash flow”.
The answer, as regards medical invoicing, is very simple to answer:
But what does that mean in reality?
It means aiming to be a winner
It means taking all the items that should be done and turning them into a MUST be done.
For example, I took a phone call from a consultant’s secretary this morning who wanted a favour.
She was struggling to get an invoice posted electronically.
She was trying to invoice BUPA.
Simple enough you may think but despite having a policy number, she could not process the invoice.
So how did it take me approximately 3 seconds to work out precisely WHY she couldn’t process the invoice?
She told me the policy number began BI-6000 etc.
That told me the policy number was not a BUPA policy number; it was a BUPA INTERNATIONAL policy number.
She was trying to invoice the wrong insurance company.
A quick fix to process the invoice, again online, to BUPA International and it sailed through. Sorted.
If standards had been raised to ensure that every single patient registration form had been completed correctly, this problem would not have occurred.
The invoice would have been processed the same day and payment made when required.
Instead, a shortcut had been attempted and the patient’s insurance company detailed incorrectly.
If standards had been raised to ensure this was checked and spotted the invoice would have been immediately processed.
There are no shortcuts if you want to get paid.
As it happens in this case the issue was already a week old before I took the phone call.
Thus an increase in cash flow – the outcome desired by the private consultant – was not being reached.
However, if you stop to think there are two questions:
When the patient was registered, why wasn’t the check performed to ensure the right insurance company was recorded because it should have.
What should have happened was the standards had been set too low.
If it becomes a case of the patient MUST be asked i.e standards are raised then this specific problem is never allowed to arise.
And that’s what I mean by raising your standards.
So why is this even more crucial as we work our way through 2020?
Because more and more private medical insurance companies are insisting invoices be submitted electronically.
The issue is not one of is that the right thing for them to do or not.
The real issue is that it is happening and standards must be raised to ensure you CAN invoice electronically.
In other words, if you don’t have all the right details it is much, much harder to process an invoice electronically.
You will instead have to re-contact the patient and get the right details.
Therefore it makes more sense to say you MUST get the details upfront and you must RAISE YOUR STANDARDS to the point of saying – the correct details MUST be obtained and checked.
I’ve even witnessed where an invoice can’t be processed because the postcode has been recorded as W01 (numeric) when it should say W01 (alpha) Incidentally.
Many times I’ve said insurance companies are not the enemy.
Even if I frequently disagree – I do on a daily basis sometimes – with some of their fees plus other items they do which are seriously irritating, all insurance companies will pay a private consultant IF (and only if) ALL the details are correct.
In other words, invoices must be raised to the correct standard.
Never quit. Aim to be a winner instead.
If you want to increase or improve your cash flow, the very first thing to do is to raise your standards in the area of invoicing.
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Top up (or GAP) invoices = asking the patient to agree to pay the difference between a consultant’s fee and the fee an insurance company is prepared to pay.
The discussion concerning them seems to take place more in whispers than anything else.
And sometimes they are even deemed to be almost a taboo subject because they don’t exist.
But they do.
So, and for the record:
I have no problem issuing them on behalf of my clients.
Why and when?
Consider the case of a real consultant surgeon whose patient is quite happy to pay, for example, £852 for a surgical episode.
But the patient is insured with XYZ Insurance.
XYZ will only pay a “customary and reasonable fee” of £639.
The fee was £852 but due to “market conditions” XYZ has reduced it by 25%.
Thus the consultant may now as part of his recognition protocol only charge £639.
Most consultants actually perform the same procedure throughout the month.
Empirical evidence using MHM clients confirms they all perform, in their own specialism obviously, the same code(s) on average 5 times a month.
If that code happens to be the one reduced by £213 each time, the reduction in revenue is over £1,000 each month.
In the original scenario though, the patient has chosen to see that particular consultant.
His/her decision has zero to do with fees.
That is the consultant the patient has chosen.
If the patient is advised the fee for their procedure is £852 but their insurance company will only pay £639 towards it and then if they – the patient – is asked beforehand to pay the difference and agrees, where is the problem?
Ah no, say the insurance company, you can’t do that for that is above our stated fee schedule so you are risking your recognition with us if you do.
This article is not about if they are right to potentially withdraw recognition if fees are not adhered to.
Neither is it about whether XYZ Insurance is right to reduce the fee.
The first thing consultants will all do is be deeply unhappy about the reduction.
The second thing they will do is attempt to mitigate the loss somehow or another.
And the second point is the more relevant one.
Many times I hear from insurance companies the market is contracting and cost has to be taken out to make the private medical insurance offering more attractive.
But why is the cost reduction, or so it appears, being continually directed at the consultants?
Yes, I am aware that certain fees have gone up but overall fees have come down.
I’m equally opposed to those consultants who insist on ignoring insurance companies’ fee structures for every single procedure and/or episode.
I’m also very focused on taking costs out of any business so I can see where the insurance companies are coming from.
But not at the expense of continually reducing a consultant’s fee and thereby reducing his profit continually AND the patient’s right to a choice.
Top Up or Gap invoices are a reaction to consultants continually seeing their fees being eroded.
I haven’t said I completely agree with them for they should be unnecessary.
What I am saying is that I understand why I’m being asked to produce them and when.
Consider an actual quote to me recently from a very well established consultant surgeon.
An orthopod who has been in private practice for over 10 years:
That, perhaps, sums up precisely why some MHM clients are asking me to produce Top Up or GAP invoices.
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It is marvelous how some private practices manage to make ANY money.
Actually, in one recent case, I’m not entirely sure the consultant concerned was making any money at all.
More frighteningly, the consultant did know if he was or not.
He didn’t know because he spent most of his time stumbling from crisis to crisis.
Either he hadn’t got enough patients booked to see him or he’d never sat down and thought about how he could get more patients. Scary stuff.
When I looked at his billing, it came as no surprise to realise he was weeks behind.
Cash or a general lack of it was becoming a big crisis for him for each month he was forced to inject money into the practice.
He literally was stumbling from crisis to crisis.
As I drilled down through the clinic list one item stuck out.
There was a complete lack of patient details. What details were available, were inadequate. Not good.
The scary bit was the realisation there was no formal plan to stop this getting worse.
He hadn’t allowed himself time to think about how to stop the issue from happening because he was stumbling from crisis to crisis.
This was having a major impact not only on his practice but also on his staff.
They were mightily fed up with lurching from one disaster to another and thus they voted with their feet.
So I recommended to him he immediately – and I do mean now!! – put a process in place that makes sure ALL patient details are correct.
But…to do so he must STOP, demanding of his staff they “drop everything” and sort whatever today’s crisis was.
As he explained to me, his stated desire was to stop having to put money into the practice in order to keep it afloat.
Instead, he wanted to take money out!
A very simple and absolutely perfect goal.
Otherwise, why be in private practice??
But to achieve his desire he needed to do one thing FIRST.
He needed to stop stumbling from crisis to crisis.
or to quote his words and not mine he “needed to stop being a busy fool”
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All MHM clients want to see more patients.
They want to grow their practice by taking advantage of the reported 7.5% per annum growth in self-funders.
Quite right too.
Self-funding patients are an opportunity to grow a private practice.
They want their practice to be a big practice.
Sadly, some make it hard for the potential new patient to make an appointment though.
For example, I called a client last Wednesday morning and nobody answered the phone. It wasn’t engaged; it just rang out.
The phone did not go to an answering machine. It just rang out.
Thus it was actually hard and not easy for a new patient to book a consultation.
If I had been the patient, frankly I’d have tried to book with another consultant.
It is not just the “small” practices that get it wrong. Hospitals get it wrong too. And so do insurance companies.
They all think big but act small.
There is one particular insurance company I speak with regularly who during the call have so much noise in the background, I literally struggle to hear what’s being said to me.
It matters little whether the practice, the consultant or the insurance company think I’m important.
What matters is that I hold the view I’m important.
I’m important because I want to make an appointment or resolve an issue that’s important to me.
I may only be ONE single potential patient but every single patient counts if you want to grow your practice or your business.
Your practice may have the best website ever.
The consultation rooms you use may be state of the art and look extremely professional.
Both suggest the practice is a big practice.
But if you don’t make sure every single patient feels they are the most important patient ever at every step of the way, you may not see more of them.
Every step of the way does not just mean in the consultation room, it means at absolutely every single step of the way.
One MHM client saw 126 patients in January 2020 with total revenue of around £35,000.
He hadn’t got time to see any more patients. His clinics are full.
His total revenue in 2019 came in at just over £350,000.
That makes his practice a BIG practice.
All because every single small patient is made to feel they are THE most important patient he has got.
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