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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It actually happened too.
Consider a CCSD code for a follow up consultation = 20310. Now consider the CCSD code for a ECG = 20110.
A consultant surgeon couldn’t understand why he was not getting paid the right values for his follow up consultations i.e. £150. Instead, he was getting either £72 from one insurance company, £96 from a second or zero a third. The reason was clear when MHM investigated.
It was because some of the invoices for his follow-ups consultations had been coded as 20110 [ECG reporting] and not 20310 [follow up consultation]
That one digit incorrectly quoted was making all the difference.
Insurance companies were seeing 20110; some were querying the code when the patient hadn’t had an ECG but others were happily paying the fee for the 20110. The third insurance company did not cover 20110 ECG as part of their patient offering and thus declined to pay anything.
When numbers were audited the average discrepancy was £65. When all numbers were in, the number of errors equaled 11. And thus the client was out of pocket by approximately £725.
The consultant concerned was not happy, especially when his work did not require an ECG anyway. Thus one day’s analysis and the consultant now receives the right fee – because the right code and fee are being used.
Even getting ONE digit wrong can cost £725.
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Following on from a recent blog and questions raised at a presentation to consultant surgeons, I was asked to further explain why you must invoice quickly.
The obvious one is that the sooner you invoice, the sooner you get paid. Fairly straight forward you may think. Yet many consultants in my view take far, far too long to invoice – delays of up to 2 weeks are not unusual.
However, have you ever considered what might happen if there is benefits limit on a patient’s policy?
You won’t even know if there is or not and certainly you don’t know what the limit is. But if the limit is reached either partially or in full before you’ve submitted your invoice you are pretty certain to be shortfalled.
It is almost like whoever asks first gets paid first and whoever asks last gets paid IF there is enough money left. So if you invoice for your work a few weeks after the event and more importantly after everyone else, you run the risk of increasing the number and value of the shortfalls you are subject to.
For example, MHM was recently asked to review the invoice process of a consultant surgeon. In doing so, the cash flow of the consultant was compared to that of an existing MHM client. The consultant had many, many shortfalls and excess amounts on his accounts. The MHM client had less than 12. Why? Same specialism, similar volumes of work. However, MHM invoiced for the original client within 48 hours of receiving his clinic/theatre list. The consultant was raising invoices at the end of each month. Coincidence. No.
That is why it’s important to invoice quickly. If you are not, what can you do about it?
If you wish MHM to benchmark against what it should be, email me.
And it’s free!
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Ever thought what is the most often quoted reason for non-payment by a patient of the excess?
The same reason is quoted over and over again. Its 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 and should you be suspicious?
In answer to the first question, it’s because the patient assumes the bill for your professional services will be “sorted” by the hospital. They genuinely don’t realise that the transaction is between them and you as the Consultant. Clearly the above statement may not be applicable if the patient has purchased a “package” with the Private Hospital. 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 if there were any. 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 or credit card.
Yet a few weeks’ later when the invoice arrived from the consultant, she said to me something was wrong, as the Hospital had taken a swipe of her card when she attended the consultation.
Quite rightly, she called the consultant’s secretary (not an MHM client by the way!) who explained the situation and a BACS payment was made same day.
It does demonstrate however, the most often quoted reason why payment for an excess invoice has not been made.
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Most excess charges are between £75 or £100. Of course, sometimes they can be higher or even lower but often they are £75 or £100.
This in itself is not a problem. It’s just as easy to send an EXCESS INVOICE out for £75 as it is for £100. The problem arises though when the patient either pays by BACS or sends a cheque in.
It’s not unusual at all to see the same credits on client’s bank account statement with no details against them.
Thus when you come to do a bank reconciliation how do you know who has paid what?
The simple answer is when you raise an invoice for an excess charge make sure you ask the patient to quote the invoice number when making the payment.
The excess invoice number must be unique as it always should be for an ordinary invoice anyway. At least then you should be able to identify who has paid what and why.
But do patients really pay without putting the details on the back of the cheque or returning the invoice without the details? Don’t they always put the invoice number with their BACS payment?
Reality check – no they sometimes don’t.
If you don’t ask them to in any event you are fairly certain to end up with un-identified payments on the practice bank statement. And that is bad news!
Its bad news because it leads to excess invoices being paid and not being recorded as such. Many times MHM has been called in to chase old debt i.e. debt over a year old and in doing so receives numerous phone calls and emails from patients who claim to have already paid. Indeed they have.
So the reality of the situation is for the client to believe they are owed thousands of pounds from say 2 years ago when they are not. All this can be easily averted if when a payment is made for excess it is correctly recorded on the ledger. If the payment cannot be identified it should be shown as such on the ledger also.
It is very easy to do this.
Contact me if you wish to know how!
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Recently a family member in conjunction with his/her GP decided an appointment with a private consultant was necessary.
As the family member had private medical insurance through his/her employer, a phone call was made to the consultant suggested by the GP.
It turned out although not an MHM client, the consultant practice manager and I are old friends. So I made the call myself. An appointment was subsequently made.
Came as a surprise the next day, for my family member to announce the insurance company had called suggesting another consultant.
My family member asked why and was told the second consultant didn’t charge as much as the one he/she originally wanted to see.
Not a good thing to say. My family member insisted – and had to insist – on seeing the consultation of his/her choice.
I quickly found out how much the second consultant charged for an initial appointment. It was indeed lower.
Nonetheless, the appointment with the first choice consultant happened.
Two weeks later a letter arrived from my family member’s insurance company stating the consultant had been paid. There but was however a shortfall. The 1st consultant’s fee was higher than that of the second consultant. My family member was required to pay the difference.
The fact that my practice manager friend is pulling her hair out at the moment with the increases in shortfalls is not the point.
The point and the stark reality is that the insurance company were using finance as a criterion upon which to base the decision which consultant one of their policyholders (my family member) went to see.
And that, I’m sorry, is NOT right.
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Take this ONE client as an example.
Out of 15 consultations 4 (four) came back with excess / shortfall deductions totalling £575 in one week. 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 last year, the number of shortfalls / excess were roughly half this figure both in percentage and value terms.
The question as to why this is happening is not the concern. The concern is what are you going to do about it for if 23% continues the downside and potential loss to the consultant is significant. There is only one real way to ensure the patient makes good the excess / shortfall and mitigates this risk.
And that is to phone them.
Sure you can write letters and even email but nothing gets a response like a ringing telephone. Most patients are unaware of the issue (yes I know when they open their policy they are made aware of excess values) 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 because 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 shortfall / 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 shortfall / 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 is this case reduce to £13,800 per annum. Thats a chunk of change in anybody’s book still.
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 2014. 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 shortfalls etc and their views on remedies.
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This issue came up during a recent meeting with a consultant surgeon. More specifically how fees are accounted for against a benefits package and the possible creation of a shortfall.
Consider the total benefits payable under a patient’s insurance policy. For example, the benefits payable may be £100. Obviously, it could be considerably more as will the possible fees mentioned below.
To continue, however, against such a benefits package fees are deducted as follows:
The patient attends for an initial consultation at a cost of £20. Therefore the £20 is paid out and the total benefits figure reduces to £80. Subsequently, the patient requires a surgical episode at a cost of £50. This too is paid out and the benefits accumulator, therefore, reduces to £30. But of course, the hospital tenders their account (say £20) as does the gasman (£15). The benefits accumulator, therefore, further reduces to ZERO. Thus the benefits package is equal to the fees charged.
If the initial consultation fee is £21, the surgical episode fee £51, the hospital account £21 and the gasman’s account £16 then the total fees total is £109 against a total available benefit package of £100.
Thus, if when the fees are calculated against the benefits accumulator they exceed the total available, a shortfall will be created.
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Not only are accurate records required to show how many patients you are seeing and how much you are owed but they are also required by your accountant. They want them because HMRC want them!
Not only does a failure lead potentially to payment of incorrect tax amounts but it also leads to an increased accountancy fee when the situation requires rectification. This blog is concerned however only with the records you should keep regarding the amounts you invoice:
First item must be – Do you have easy access to your invoices and are they complete? If you have say £20,000 on a sales ledger you should be able to show how the £20k is made up. In other words, produce either in paper form or electronically, copies of the invoices. Too many times, MHM have taken a new client only to be presented with, on one infamous occasion, carrier bags stuffed full of paper which were not in order and did not reconcile back to the sales ledger. The sales ledger itself was actually a copy of the consultant’s own paper diary.
So. The client didn’t KNOW how much he was owed; he just thought he knew. He couldn’t prove the amount he said he was owed anyway. Took me a week to sort it all out!
What didn’t help was the lack of an invoice reference number. Many think this is not that important. Quite the reverse. For example: the consultant had seen Mr. Smith (the patient) and allocated as an invoice reference – Smith/Sept14.
Fine, but not when he saw Mr. Smith for surgery in Sept and allocated the invoice reference Smith/Sept 14 again. Which invoice was outstanding and which had been subject to excess? – I had no idea. I did know the new client had overstated his fees and would therefore be paying too much tax eventually.
To make matters worse, when all the invoice values in his paper diary were added up and cash payments (recorded in his diary) taken away, it appeared he was owed about £8,000 LESS than he thought he was!
This explained why he was of the opinion he didn’t get paid very often, he was right.
Be aware however, this particular blog is concerned ONLY with keeping records relating to your invoicing. There is much more to it relating to keeping other records for additional tax and audit purposes.
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If fees differ between insurance companies how can they be checked and monitored?
For example, a fee for a fictitious CCSD code XY4321 can differ between the big five insurance companies by as much as £100. Add to the equation another code. AB9876. It may or may not be performed at the same time as the XY4321 dependent of the insurance company concerned. Then the problem may become complicated.
AB9876 has 5 different fees anyway PLUS some insurance companies allow 50% of the AB9876 fee when invoicing alongside XY4321. Others, however, only allow 25% and the remainder don’t let AB9876 be invoiced alongside XY4321 at all!
Take a moment to realise why this is very important. It’s because if there is an error in the calculation, the chances are the consultant will UNDERCHARGE.
So how do you track and monitor the situation?
The solution is to create a grid that details all the codes you perform – most consultants do a relatively few different types of a surgical episode – and program the grid to calculate the correct fee for each code and the correct fee for each individual insurance company combination.
This is exactly what MHM does for all its clients by way of the “MHM Grid” and thus very, very rarely does MHM over (or more importantly) undercharge for anything.
Even more interesting is MHM don’t actually charge for building and maintaining a “Grid”. Clients get it free.
Do not, however, think, once programmed the Grid will always be correct.
The other factor is that fees and their combinations will and do alter over time. For example, if you check fees with BUPA you’ll discover the fees are correct up to October 24th at which point they may (but not necessarily will) change!
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Reality is, the question itself is incorrectly asked! A consultant surgeon or other medical professional doesn’t set his/her own fees. Instead the fees payable are designated by the private medical insurance company with whom the patient is insured.
Take ANY surgical episode (or consultation for that matter) and you’ll discover the fee payable by one insurance company will differ between that set by a second insurance company even though the same episode takes place. So it’s the insurance company that sets the fee and the fee can differ between them.
Taking the above example further using a fictitious CCSD code of XX4321, insurance company A may set the fee at £100, insurance company B set the fee at £125 and insurance company C at £150. Across them there is a difference of £50.
The problem arises when the consultant makes a mistake and bills insurance company C with the £100 set by insurance company A, and immediately looses £50.
That said, if insurance company A is billed insurance Company C’s £150, immediately the consultant is shortfalled. The suggested (and WRONG) solution is to pass the shortfall to the patient. By all means do so up to the point, insurance company A realise what is being done. Keep doing it and your recognition will be at serious risk!
Yet consistently many consultants complain that the fee is too low (which it probably is) but don’t realise it is because they are charging £100 when the insurance company concerned will happily pay £150.
How do you manage such a situation and set your fees?
You don’t. You employ an outsource company to make sure you are invoicing the right fee in the first place!
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Since private medical insurance first began, the number one route by a patient to a consultant surgeon has been the patient’s GP. Most time the patient will follow the GP recommendation but what if they don’t?
What does the private patient look for in a consultant surgeon?
Ease of access is the most often quoted reason a patient chooses a specific consultant. This is a logical progression from why the patient has private medical insurance originally – because he/she wishes immediate access to a consultant surgeon. Allied to this is the location of the consultant surgeon.
But how does the patient narrow down the search if there are many consultants to a geographic area all of whom are easily accessible?
The patient will look for recommendation from friends and colleagues who have been patients of the consultant. They almost certainly will check the internet for the consultant’s website. That said, it is not unusual for the patient to check the website AFTER making an appointment. Further still there is a gender divide with almost 90% of female patients looking at a consultant surgeon’s website but only 50% of male patients.
However, the story doesn’t end there. Empirical evidence confirms the first impression of a patient when he/she contacts a Private Medical Practitioner is a big influence on whether the consultant is actually engaged.
It is perhaps significant that one MHM client insists the telephone is answered within 3 rings and enjoys an extremely busy initial patient schedule. A second uses an answering machine service but consequently has a much lower number of initial patient consultations.
So, the patient is looking for ease of access to the consultant, a good reputation and to be managed by the Practice extremely professionally.
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The argument if a private patient should be allowed at an NHS location is not the debate here. For one thing, the debate would require a substantially longer blog article than space will allow!
This blog instead seeks to answer the patient’s question of “ Can I be seen privately on the NHS?” And the answer is YES.
There are many, many NHS facilities at which private patients may be seen.
Known as PPU (Private Patient Units), these units in the NHS offer a greater choice to those patients wishing to be seen privately. What is interesting is that the prices for an NHS Private Patient are often very competitive when compared with a private hospital.
Do not assume though that only self-funders can be seen at a PPU. In reality, most PPU are recognised by the Private Insurance Companies and often will arrange for their account to be sent direct to the insurance company.
However some policies – see an earlier blog – will restrict access to certain hospitals of the insurance company’s choice.
But in answer to the real life question asked by a patient of an MHM consultant surgeon client, YES a patient can be seen privately at an NHS location.
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Every so often I take a phone call from a self-funding patient or an insured patient who requires a receipt for their payment. They need a receipt so they can claim the money back from their health cash plan provider.
For example, patient visits a physiotherapist, pays for their treatment, MHM issue a receipt on behalf of the Physiotherapist. The patient claims the fee back from their Health Cash plan provider. Alternatively, the patient is insured but outpatient appointments are not covered under their policy.
Health Cash Plans are designed to ease the financial burden of having such regular health checks. Dentistry or a visit to the opticians for example. They are NOT the same as a private medical insurance policy.
So why are they relevant to the consultant surgeon?
Well on some occasions it has indeed transpired that the patient’s private medical insurance cover does NOT include outpatient appointments. Therefore the patient has paid for them but requires a receipt so they may claim the cost from the Health Cash Plan provider,
Thus it is important to understand what a Health Cash Plan is and how it may compliment a private medical insurance policy.
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It is dangerous for a privately insured patient to assume his/her insurance covers everything. Very often it does not and this impacts on the consultant surgeon.
Private medical insurance is designed for short-term injuries or illness i.e. an injury that suddenly happens and in most cases treated/cured relatively quickly. For example: a broken hand can be treated relatively quickly whereas a diabetic problem may not.
Consider it this way. Private medical insurance is in place to cover elective non-urgent operations such as knee replacement. A heart attack will be treated at an NHS level. In any event, if the condition was known before the policy was taken out, it will not be covered. Further, it does NOT follow however that if the injury is short-term and treatable under private medical insurance cover, all parts of the treatment will be covered.
It will depend on the type of policy held by the patient. And basically, the higher the costs of the cover, the more items are covered regardless of a financial limit. The lower or budget type cover may set a financial limit on how much can be paid out under the policy or, for example, may exclude consultation fees.
Is this relevant to the consultant surgeon?
In this writer’s view whilst it may impact on the consultant surgeon it will be a very sad day when a consultant even stops to consider if he/ she will treat a patient based solely on the type of insurance coverage. In such a case they would remain an MHM client.
That said what is the impact on the consultant surgeon?
For one thing, a budget type policy could easily lead to shortfalls, excess or the non-payment of consultation fees. This, in turn, in order to avoid a financial loss on his part, will lead to a requirement for the consultant to have such amounts collected from the patient.
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