Insurance companies use medical coding to detail a medical procedure.
For example: an Orthopaedic surgeon will understand what a Multiple arthroscopic operation on the knee (including meniscectomy, chondroplasty, drilling or microfracture) is.
That is a lot to put on an invoice!
The CCSD code W8500 will identify the procedure.
Put this code on the invoice instead.
Codes can be found on the CCSD website:
The Clinical Coding and Schedule Development Group (CCSD) consists of representatives from the major healthcare insurers.
The Group’s purpose is to maintain a common standard of procedure codes.
A CCSD code is imperative IF a surgical episode is required.
The patient should quote the code to his or her insurance company when pre-authorisation is being requested.
However, be warned.
The example above of W8500 does not come with a suggested fee.
The rate for each code is up to the individual insurance company. You need to contact them to discover what fee they will pay for each.
When an invoice is sent to the insurance company, the code should appear on the invoice. It will reconcile to that expected.
If you do NOT use CCSD codes payment will be delayed if made at all!
Without a CCSD code, you will not be able to invoice electronically anyway!
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For the simple reason, cash does not flow.
Cash has to be managed.
Around this time of year, I take calls from consultant surgeons who in view of their impending tax payments require an increase in cash collections.
It’s happened every year since MHM was formed. The normal instruction is to increase the cash flow. Immediately. Simple enough. I can do that.
Existing clients don’t call because invoices have already been generated for them and they’ve already been paid for their work.
Their cash has already been maximized.
The real problem faced by potential clients though was highlighted this morning when a consultant surgeon referred to needing an outstanding cash flow “purge” within his practice.
This highlights to me a more fundamental underlying issue. Let me explain.
A consultant surgeon – just the same as any business – should know how much he is invoicing both in terms of patient numbers and the value of those patients.
If he is invoicing correctly and ensuring he gets paid he can also, therefore, calculate his revenue receipts.
he wasn’t a consultant surgeon but sold another service or product, he should be able to perform the same calculation.
So he knows how much he is or should be invoicing. Providing he proactively manages his practice.
If you think about it, most consultant surgeons already know their overheads too. They know how much their room rental is. They know how much the staff cost.
And they know how much their professional indemnity costs (too much before you ask).
Of course, there are other expenses but fundamentally they already know their expenditure.
They know their total costs.
Therefore they know or should know how much they are spending too.
Enter stage left Mr. Micawber:
He knew a thing or two about how to run a private medical practice did Charles Dickens.
For one thing, he knew cash doesn’t just flow into it.
It has to be managed.
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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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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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My Boss is Medical Healthcare Management Ltd.
And a very demanding Boss she is too.
She requires my undivided attention every single day of the week.
Even a private consultant surgeon has a Boss.
And it’s their own Private Practice.
Last Friday I was talking to a client. He is an ENT consultant.
I had to call him because he was three weeks behind in sending me his clinic lists. I also had to speak with him because he’s accountant had called asking for some data.
The accountant needed the data urgently so he could finish the year-end accounts for the consultant.
Apparently he’d been asking the consultant for this data for weeks and had been told to speak to me because I would have it. Indeed I did and it was emailed minutes later.
But it’s as I said to the ENT consultant, such data needs to be ready and able to be shared every single month.
The business demands it so it can calculate how much it can afford to pay him that month.
Just as the business demands clinic lists are sent the same day a clinic is held.
The consultant explained he didn’t have the time to do that.
Yet perversely, the consultant was complaining his cash input wasn’t enough to grow the practice.
The two, however, are absolutely connected.
If you want more cash into any business, you must invoice and then collect the payment.
And that means processing your clinic lists so they can be invoiced and then those invoices will be paid.
Compare the ENT client with another MHM client: a pediatrician.
He holds three clinics each week. After each clinic – literally, before he goes home – he scans his clinic list, password protects it and then emails it to me.
His cash flow is very strong.
His practice is a demanding Boss. She demands she is paid.
So he makes sure he keeps his Boss happy by processing his clinic list so she DOES get paid.
So how do you keep a demanding Boss happy?
Deliver what the Boss wants when the Boss wants it.
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The first thing to realise about increasing a fee is that you CANNOT increase a fee for all your surgical episodes nor can you increase a fee every time you perform a surgical episode.
Having said that it is possible on occasion to request an uplift in fee under certain circumstances. The question of time taken, however, to perform the actual episode is not in itself the first reason to request an increase in fee. All insurance companies WILL consider a request to increase fee but the time duration of the episode is not the place to start.
It is the “what, when & how to ask” that are the most important items to consider.
What, for example, may be defined as a 50% increase in the stated fee. Do NOT merely ask for a 100% increase in fee because the probability is that you will not get it!
When? The “when” may be defined as asking for an increase to be considered BEFORE an invoice is submitted.
How? This may be defined as having the correct information in order for the increase to be considered.
When MHM is asked to request a 50% increase in fee MHM asks its client to supply the following information:
a. The precise details of why medically the consultant feels his fee should be increased. In other words, a written explanation from the consultant as to why the episode was more complicated than anticipated. The consultant is also asked to provide a copy of his/her theatre notes.
b. Details from the anesthetist who provided his/her services during the episode
c. Copies of correspondence from the Hospital detailing the original schedule i.e. time allocated etc.
MHM will then call the insurance company concerned and advise them a fee increase is being requested. It will tell the insurance company a fee increase from say £500 to £750 is being requested. It will advise the insurance company all the information is available and ask where the supporting documentation is to be supplied.
Only then will an invoice be raised and submitted. It is then a question of checking the invoice every single week to ascertain the status of the invoice. This may take up to 30 days.
By following the above process MHM has on numerous occasions obtained an increase in fee for its clients.
Without following the process, it would not be obtained.
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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 much, much more switched on these days. 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 don’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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A question, which was asked recently at a private practice seminar MHM were presenting at.
Interestingly the question was asked by a consultant surgeon who had started his/her private practice two years earlier. He was of the opinion that such excess was the responsibility of the patient’s insurance company who would collect excess or shortfall amounts from the patient on his behalf.
Sadly this is absolutely NOT the case at all.
The responsibility for the collection of such items rests very squarely on the consultant himself.
Consider excess and the cause of excess?
When the patient obtains private medical insurance there will be an amount – or excess – agreed on the policy.
The exact amount of the excess will depend on how much the patient pays for his/her policy. Generally speaking the higher the premium, the lower the excess.
It’s just like car insurance, if you agree a £500 excess, the premium will be lower than if you only agree £100. That’s fine – until you come to make a claim on your insurance. Private medical insurance carries the same principles.
So, when the patient comes to see you and you claim the cost of your services off their insurance company there could well be excess for which the patient is liable. The consultant is responsible for the collection. Not the patient’s insurance company.
The consultant who asked the question called a few days later because to this horror, he had in excess of £5,000 worth of uncollected excess in the previous two years unpaid and due to him which nobody was collecting.
The supplementary issue, however, is why were the excess amounts allowed to build up over two years without anybody noticing?
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Most consultants, and certainly when they first start a private practice consider how best they can set their fees.
In reality, however, it is not the consultant who sets his or her own fees.
It is the patient’s insurance company.
Fee setting should be viewed from two areas:
Insurance Company Fees
Self Funding Patients
Consultation fees, for example, will be agreed at the point of recognition by the medical insurance company.
Clearly, if you have 20 years post qualification experience and are one of the few consultants within your geographic area in a particular specialism, then you can 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.
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 or at the very least shortfalled to the patient.
Keep sending invoices in for fees greater than that allowed by a particular insurance company and you run the risk of being de-recognized.
In the case of self-funders, however, there is nothing to stop you charging any fee you like.
Save of course if there are other consultants in your area then the fee levels they charge will influence that which you yourself charge.
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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