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 May,2022 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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Most MHM clients have reported issues with self-funders when we get involved. It is also the source of many calls made to MHM.
With the self-funding market increasing, it is important to understand the reasons self-funders can be a problem.
But what, based on empirical evidence, are the three most common reasons a self-funder hasn’t paid:
The first issue is always the same. When the patient is contacted as a self-funder, he/she claims never to have received an invoice.
Whilst this is obviously easy to rectify, how many medical professionals are 100% certain the invoice was sent in the first place?
Obviously some self-funders will be naughty so to speak but generally, they will pay if sent an invoice.
So the first common reason – the self-funder hasn’t been invoiced.
The second issue concerns the use of debit or credit cards. In 99.9% of cases when a patient arrives at a private hospital he/she will be asked to provide a swipe of their card.
Sadly on numerous occasions, the patient is unaware the card only covers the hospital fees. It does NOT cover the consultant’s fee.
The MHM solution is when the patient first makes contact with the consultant, he/she is advised the card swipe will NOT cover the consultant’s fee.
This should be followed up by a note on the consultant’s invoice stating: This invoice is NOT covered by any debit/credit card details you may have provided to the hospital.
The second common reason – the patient thinks they have already paid
The third issue is the easiest of all to resolve. Frequently, a self-funding patient has called upon receipt of the consultant’s invoice to say they are insured.
This must be addressed immediately. Invoicing the wrong person is absolute insanity.
The cause is a failure at the patient’s initial point of registration to ensure the correct details are taken.
The third common reason – there is a major failure in the consultant’s registration process.
If the above three items are correctly managed and a firm process put into place to manage the minority of self-funders who don’t pay, the number of outstanding self-funding invoices drops in most cases by over 80%
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Recently a private consultant – the colleague of a current client in fact – called me with a problem. Sadly it was a problem very much of their own making!
In an effort to increase fees, the consultant had decided that a surgical episode should be billed as follows: AB1234 £640 and CD2468 £75. So the total fee = £715.00 and on January 10th, 2022 the insurance company was sent an invoice for £715.0. And promptly proceeded to reject it.
The fee for the AB1234 was and still is correct. But with this particular insurance company offering 50% of a second code, the CD2468 fee was wrong to start with. It should not have been £75. It should have been £37.50. Great. Save the invoice would still have been rejected. Why this time?
If the private consultant had checked they would have discovered that this second CD2468 code was deemed by the insurance company to be part and parcel of the AB1234 procedure. Thus it was never going to get paid anyway and it was deemed unbundling to submit an invoice and charge for both items.
Skip forward to February, 2022. The consultant – or more accurately his long-suffering secretary – has called, emailed and written to the insurance company because the consultant is still unpaid the £640 for the AB1234.
Hence the phone call to MHM.
For once even I couldn’t do anything about the multi-code element. It very clearly states on the insurance company website that a consultant cannot invoice a CD2468 alongside an AB1234. In fact, it also says so on the CCSD website. It is deemed unbundling to do so. The bottom line is that from October 2021 to January 2022 the consultant has been £640 out of pocket. MHM called the insurance company and has confirmed the original invoice has now been canceled and re-submitted an invoice for an AB1234 £640.00. It is being paid this month too.
Moral of the story?
You will NOT uplift your fee by charging the wrong amount and you most definitely NOT uplift your fee by unbundling.
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At a recent on-line presentation, I was asked about the costs and use of accounting software.
Bearing in mind the presentation was to consultants who had not yet established a private practice, numerous eyebrows were raised when I answered…
You may not need it yet.
This does not mean accounting software is unnecessary, expensive or unsuitable for an established practice.
Some private practices do need a software package and there are some fine software packages out there.
They are cost efficient too and MHM works, very successfully, with many of them too.
But for those seeing say 10 or 12 patients a week use MS Excel or Apple Numbers and an online diary.
MHM has more than a few clients for whom it raises invoices on Excel and uses the same to run a sales/debtors ledger.
The sales ledger – once password protected – can be sent either to the client and/or the client’s accountant.
If a private practice is a business – and it is – then you MUST keep an eye on all costs.
If you do not, profit will reduce.
It’s always useful to ask yourself the question: am I paying for something I don’t actually need?
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They are not just for tax reasons. They are not just to keep the accountant happy. There is a time-critical reason too.
Remittance advice will confirm the values that have been paid. It is a mistake to assume that the invoice will be paid completely. It may not be.
For example and taking one remittance received by an MHM client.
Of the ten invoices paid, four of them were subject to excess deductions.
This is why remittances should be checked. And before they are stored for tax reasons or to keep your accountant happy.
In the above example, each invoice detailed on the remittance was reconciled against a debtors ledger. Only then was the payment recorded. It was then the number of deductions was identified. In this example, the total came to some £350.
The next step is to identify why the deductions have been made.
Whilst all four deductions were correct and were in respect of excess amounts it is surprisingly common for a deduction to have been made in error.
In the recent past, one MHM client had an invoice for surgery deducted in full because the patient’s policy had expired. At least according to the patient’s insurance company it had expired. It had done so after the date of the surgery. In this case, at the date of the surgery, the policy was “live”
Consequently, the insurance company was wrong to decline the invoice for payment.
A call to the insurance company concerned quickly identified and confirmed the insurance company was in error. The invoice was immediately cleared for payment. Insurance companies do make mistakes. Not many thankfully but they do happen.
If the deduction is correct then immediate action should be taken to contact the patient and a request made for payment – by the patient – made.
So the number and reasons why deductions have been made by a private medical insurance company can easily be identified and subsequently actioned on behalf of the consultant surgeon.
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An MHM client held one of his twice-weekly outpatient clinics recently. Nine patients; so there should be NINE invoices.
Except there are only EIGHT?
A quick look at the list indicates one of the patients is designated as inclusive care; no invoice required. But hang on a second, an invoice was raised for a surgical episode recently for this very patient and sent to an insurance company for payment. Indeed it’s been passed for the payment already.
How can the follow up be deemed inclusive care if the surgical episode was chargeable to an insurance company? Generally speaking, it can’t.
Simple explanation. The patient had been incorrectly designated as inclusive care for this clinic. Once the error is corrected, there are NINE invoices. Happy days. After all its only one episode
Make that mistake only once a week for a single month and you potentially lose over £500.
And that is why MHM checks the clinic list is right each time and every time.
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When I begin to raise invoices for a new MHM client, for example, I’ll check I have the right provider number. I’ll check all the online systems and EDI protocol are 100% accurate. Is the consultant’s address correct?. I’ll check the insurance company has the right BACS payment details.
What I’m actually doing is reducing down to absolute zero as many reasons as I can possibly think of that will prevent the invoice being raised correctly.
What happens if I don’t take this approach?
Invoices come flying back. They don’t come back straight away of course.
It may take weeks before I’m notified there is a problem. Then I have to work out why it went wrong, get all the details to put the error right, actually put it right and then resubmit the invoice.
Then I have to wait again for the invoice to be reprocessed. Eventually, the invoice gets paid.
One absolutely true example. Recently MHM project managed a group of three surgeons in the Midlands. All three were seriously considering closing the practice as they were not making any money. They were not getting paid as they should.
The senior of the three was responsible for invoicing for all three each week.
Just under 50% of the invoices he produced came back unpaid. The insurance companies concerned requested more details or raised query against them.
The senior consultant complained he hadn’t got enough time to keep sorting these things out. He had to raise invoices as quickly as possible. He tended to view any medical invoicing problem from the “quickest fix” point of view. To use his words “I only want to be a surgeon and not a whatever-you-call-it”
My kind of guy. Don’t talk about it. Get on with it. Play to your strengths. Save that is precisely what he was not doing.
He jokingly told me his blood pressure was sky high due to the constant stream of invoice problems.
Yet it was this “quickest fix” approach that was the cause of his blood pressure. Many times his quick fix in one area (get them on the phone or treat the patient as a self-funder for example) caused a problem in another area. Then he had to fix that.
This was leading to a six /seven-week delay before invoices were accepted by insurance companies on top of the agreed payment terms.
It took me two months to re-map the process, test, amend it and bed it in. In month three we started to see the results. Invoice failure rate had dropped from roughly half to below 6%. Cash flow had doubled. The time with which the three consultants got paid decreased from around every 75 days to about 50.
All three consultants were happy. Imagine the surprise though when I told them that wasn’t good enough?
I thought we should see at least a 98% acceptance rate and to be paid every 30 days. And I wanted to achieve that as of yesterday starting with raising the invoices every single day rather than weekly. The invoice process was robust. There were very few errors. There were few reasons why we shouldn’t be paid.
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At a on-line 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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This is a topic that comes up frequently when I meet Private Consultant Surgeons.
Indeed, the point was mentioned last year in a blog regarding asking self-funding patients to pay in advance.
Self-funding patients represent the major risk of non-payment for the private consultant.
That said MHM does not advocate requesting payment in advance.
One group of Private Consultant Surgeons once made it mandatory that ALL self-funding patients paid in advance.
Within 3 months they had lost over 90% of their self-funding patients.
This represented a value several times LARGER than the balance due from unpaid self-funding consultations.
Cancellations are completely different from “Did Not Attend” and frankly none of my guys (and gals) suffer from a significant number of cancellations.
Yes, there is a small number but in no way is it a problem.
It is more an inconvenience.
But there is another aspect to the debate.
That aspect is those patients who ‘Do Not Attend”
Patients who do not attend for their consultation represent a 100% loss.
It matters little how long the consultation is.
If the patient does not attend the consultation then that time is lost and no revenue may be charged for it.
Certainly, this is true if the patient is insured for it is extremely unlikely any insurance company will allow a fee to be charged if the patient did not attend for a consultation even if a cancellation was necessary for genuine reasons.
The issue, however, is different if the patient is self-funding.
Of course, it is possible for the consultant to send an invoice to the patient who did not attend.
That does not mean, however, the invoice will be paid.
The conclusions are therefore as follows:
if the patient is insured there is very little the consultant can do about DNA patients
if the patient is self-funding however taking a deposit (which can be deducted from the final charge) has the effect of REDUCING the number of “Did Not Attend” patients.
Would such an approach have a negative impact on the reputation of the consultant?
I suspect it would.
It would be interesting to hear from anyone who has a different approach and the results they have obtained. Feel free to email me at:
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Most consultants when they first start a private practice, consider how best they can set their fees. In reality, it is not the consultant who sets his or her own fees. It is the patient’s insurance company.
Consideration of fee setting should be viewed from two distinct areas:
1: Consultation fees 2: Surgical Fees
Consultation fees first.
Consultation fees (for both initial and follow up) will be agreed at the point of recognition by the respective insurance companies.
Clearly, if you have 20 years experience and are one of the few consultants within your geographic area, then you may be able to command a higher fee.
In reality, most likely you not be in such a position. You will be offered consultation fees at a level set by the insurance company you are dealing with. In return, the insurance company will refer patients to you.
In the case of self-funders, however, 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.
Surgical fees, if anything, are the easier one to deal with.
The insurance company with whom your patient is insured will always set surgical fees. You may feel the fee is too low and therefore 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-recognized.
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 such power.
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Take, for example, a patient who requires an injection which may be performed by a private orthopaedic surgeon at an outpatient consultation.
Thus you raise an invoice for, as an example, £195 [£100 for the consultation and £95 for the injection]. Please be aware for the purposes of this article the values are fictitious!
Upon receipt of the invoice by the patient’s insurance company, the value is rejected; as you CAN’T charge both for a consultation and an injection on the same invoice on the same day.
You can charge for one or the other but not both.
So you are paid £95 for the injection only.
What is interesting is that the immediate reaction from some consultants could well be to charge just for the injection and argue that is the right thing to do.
That said, it has already been suggested that the alternative would be to have the patient attend an outpatient consultation on, for example, December 18th and then attend for the injection on December 21st. See the patient twice in other words.
In such a case, the consultant CAN charge for both.
Not sure that’s in the patient’s best interests though but if the aim is to max revenue it is certainly in the best interests of the consultant.
I’m certainly not saying its right or wrong.
I am saying it’s an option.
Where it gets really tricky, is that some insurance companies WILL let you charge for a consultation and an injection at the same time.
Others will let you charge for some injections at a consultation but not all injections. Some, as mentioned, will not allow a charge for consultation and injection regardless if they happen at the same event.
And don’t forget not only do different insurance providers pay different rates for consultations; they also pay different rates for the injection too.
Gets a whole lot worse when the injection is pre-authorised as the fee for a consultation is higher than that for the injection, the orthopaedic surgeon charges for the consultation only yet the insurance company is expecting an invoice for the injection.
Unless you check each consultation and injection episode with the insurance company concerned, you will be!
More likely you will actually undercharge at some point in time. For example: if the insurance company DOES allow a fee for consultation and injection if you charge only for one sooner or later?
You’ll be out of pocket.
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Ever thought what is the most often quoted reason for non-payment by a self funding patient?
The same reason is quoted over and over again.
It is not ‘I haven’t got the money” nor is it “I didn’t realise it was so much”, not even “The invoice must have got lost in the post”.
Actually, it is…
“But when I registered at the Private Hospital, they took a swipe of my debit (or credit] card and the fees should have been taken from that”
Why is this always being quoted?
Why should you be suspicious?
In answer to the first question, it’s because the patient assumes the bill will be “sorted” by the hospital.
They don’t realise that the transaction is between them and you.
In answer to the second part, you should not be suspicious.
This is not to suggest the fault lies with the reception staff at the private hospital.
Recently I went with my own partner to a private hospital and as she checked in, it was very clearly explained that her debit card swipe covered only the hospital fees.
There was even a sign up to that effect on the wall in front of us. So my partner, as all private patients, should realise what is covered by the swipe of their debit card.
Yet a few weeks’ later when the invoice arrived from the consultant, she said something was wrong The Hospital had taken a swipe of her card when she attended the consultation.
Quite rightly, she called the consultant’s secretary who explained the situation and payment was made the same day.
It does demonstrate, however, the most often quoted reason why payment for a self funding invoice has not been made.
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Another day arrives. Its time to invoice yesterday’s clinics.
This is a good example of not paying sufficient attention to the clinic list. It almost cost the consultant £60. The patient was marked down as a follow-up. An invoice for £144 will be sent to the patient’s insurance company.
According to MHM, the consultant had never seen this patient before. A quick phone call established that this was actually a new patient so a £204 invoice was required for an initial consultation and not for a £144 follow up.
Who was responsible for making the mistake isn’t really the driver. It is important of course but mistakes happen. Of more importance is having a process to identify and correct the error.
Before it costs you £60.
All you have to do is outsource the invoicing to someone who checks absolutely everything.
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Some insurance companies decline to accept invoices that are sent more than six months after the consultation or surgical episode. Fair enough, they should have been invoiced.
A statement was received today from a certain insurance company containing an entry reclaiming £620 paid to an MHM client in December 2018.
Whilst that was before MHM started managing the client’s medical invoicing, a phone call to the insurance company was made anyway.
All part of the service.
20 minutes later the insurance company concerned confirmed the payment of £620 had NOT in fact been made to the client in December 2020!
In other words, they were totally wrong to deduct money from the MHM client. The insurance company is paying back to the MHM client £620 at the end of the month. We’ve just saved the client £620 – result.
Hang on a second.
This particular insurance company does indeed decline invoices over six months old. Yet it makes deductions from an MHM client going back not months but years.
And the deduction was wrong anyway.
ALWAYS check the payment remittances from an insurance company. 99% are correct but that last 1% can be worth hundreds of £s!
How many of you have had this happen to you? More importantly how many of you realise it has happened?
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It’s amazing how many people don’t back their IT systems up. When they have an accident, they have a serious accident.
One guy kept all his correspondence and notes on his laptop and only on his laptop. No problem at all until the day his laptop died on him. This specific problem was not resolved of course by him immediately going out and buying new equipment.
All the data was on his now-defunct laptop. Luckily a computer specialist was able to extract the hard drive and more importantly the data on the hard drive. It only then did he consider the implications of the accident that would have followed if the computer specialist had not been able to do that!
One of the first things MHM suggests to new clients is if they don’t have backups to go out buy an external drive and back everything up. MHM equipment is backed-up every 15 minutes onto an encrypted offline storage device. Every night the external drive is placed in a fireproof safe. At the weekend the exercise is repeated. MHM clients don’t have to back up any of their invoices and billing correspondence anyway.
Have you considered how you back paper invoices up?
The first thing to ask is why do paper invoices exist in the first place? With the exception of self-funders or an invoice for excess or shortfall, they shouldn’t. But you’d be surprised at how many consultants still send paper invoices unless the insurance company concerned specifically dictates online invoicing only.
A simple solution is available within MHM. All invoices etc are saved as a PDF document and stored in an encrypted format offline.
It’s always better to back up before or in case you have an accident
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What a truly awful expression!
It was said to me recently by a medical secretary who was struggling to get all her invoicing done.
Her belief was that she had only many hours in the day and it was difficult to get everything done in those hours. Therefore invoicing was completed when time allowed.
In other words, it was a low priority. There were more important things to do.
I’m sure there were. But it depends on what you decide is a priority and what is not.
I’m in the office at 8am and I finish at 8pm. Monday to Thursday that timespan is there every day. Friday it’s 7am to 1pm.
The day actually starts the evning before when I list in my Ical all the task for the following day.
The tasks ALWAYS start with invoicing clients clinics from the previous day. That takes top priority because MHM gets paid to make sure it’s clients get paid which starts with raising an invoice.
So that task can take me a few hours; somedays it may take me a whole morning. But it’s done everyday.
A medical secretary has other things to do as well. Dealing with patients is one. Typing clinic letters is another. And the phone keeps ringing too.
She has to do those things because they are priorities.
But if time doesn’t allow her to raise invoices, then the practice won’t get paid. It is a simple as that.
It’s not time that is dictating if a practice gets paid, it’s setting priorities that dictates if a practice gets paid.
Isn’t a strange that one of the first things to be kicked down the list of things to do is raising invoices? That is unfortunate considering getting paid is important because if the practice doesn’t it won’t be around for long.
And here’s the dilemma.
Everything is important. Dealing with patients. Typing letters. Answering the phone. And even raising invoices. They all have to be done.
The problem starts though when any one of them is neglected at the expense of another.
In that situation the very worse thing you can do is carry on regardless and muddle through somehow.
That inevitably leads to disaster.
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Anybody ever watched the movie “Jerry Maguire” and the immortal quote – show me the money!
Clearly a guy I recently bumped into at a medical conference hadn’t. He was the Practice Manager for a large hospital group.
His complaint was the lack of cash from insurance companies coming into the business.
His solution had been to analysis the internal administrative process of the hospital; make sure everybody knew their role and when to do it.
He ended up with a very comprehensive PowerPoint presentation.
Indeed he had spent four months doing just that.
After four months nothing had changed really.
I couldn’t help but think about his thought process.
He had gone around writing reports and compiling analysis rather than actually speaking to the insurance companies and finding out what the problem was from THEIR end?
In other words WHY they were not paying him?
If he had done so he would have immediately realised his practice was not invoicing correctly.
If he had asked the insurance companies they would have told him just that.
Only then could the practice start to review and possibly change the process to make sure they did get paid.
Start with the basics. Or as Jerry Maguire would say:
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I love it when a mistake happens or when something goes wrong.
It means I get the chance to look at what went wrong and more importantly WHY it went wrong.
That means I can stop the same mistake happening again and therefore I get better.
For example: I was sent a clinic list yesterday that was incomplete. the patients address was not correct. The insurance details were incomplete too.
It said (as an example): The Avenue, WV11 2BQ
It didn’t state the house number. Nor did it state the geographic area
The patient’s policy number was also missing. It just said AXA.
Bottom line: I can’t invoice it. My client can’t therefore get paid.
When I called the newly appointed medical secretary to point these errors out, she told me nobody had told her how important that data was.
So what did I expect to happen? I hadn’t taken the time to make sure she understood how important complete data is.
She thought instead it would be quicker just to get the basic details. On this point she is right.
She is in fact right enough to be dangerously wrong.
Getting complete and correct patient details upfront takes a lot less time than having to ring the patient (twice as it turns out) and then emailing me with the correct information.
She had to perform the task THREE times as opposed to once when the patient presents at reception.
Thus she learned how to do the job better.
And I learned to make sure a medical secretary knows who important it is to get the right information.
Win – Win situation really.
And all because we made a mistake the first time.
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