Per normal I was checking what was happening with shortfalls and excess over the weekend. Using a single private consultant surgeon as an example:
Week ending Friday January 22nd: out of 15 consultations 4 came back with excess / shortfall deductions totalling £575. So for a total of £2,500 worth of outpatient consultations £575 or 23% came back short. Looking back to the same week last year, the number of shortfalls / excess were considerably less.
The question as to why this is happening is not the concern. The concern is what are we going to do about it for if 23% continues the downside and potential loss to the consultant is significant. What to do about it? The very first thing to do is to make sure the patient has been invoiced for the amount due immediately. If payment is not received within a week then there is only one subsequent single course of action.
Phone the patient. I do. Once I have the patient on the phone I take payment via a debit or credit card.
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.That means speaking to the patient.
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. The majority of medical secretaries won’t want to phone patients for money and will be thinking this is the least enjoyable part of her job.
What if the consultant doesn’t employ someone to tackle this? What if they don’t do anything?
Assume it’s not £575 or 23% a week or £27,600 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) and allows for some patients paying without being contacted.
Thats still £13,800 per annum.
What’s significant is that when speaking to a group of private consultant surgeons I asked what they considered the biggest threat to their practice(s). Most popular is the anticipated further reduction in fees paid by private medical insurance companies. There is little if anything that can be done about that.
The second concern, however, is the number of shortfalls and excess. It’s becoming a big challenge and so it should be.
At this point, empirical evidence suggests its potentially leaving the back door wide open 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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At a recent 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. 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 invoice can be sent as a PDF attachment to an insurance company. 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?
For a copy of an MHM Excel based sales/debtors ledger go to the Freebies section on this website. The invoice is there too.
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A shortened version of a recent conversation with a well established private consultant surgeon.
Very recently one of the major PMI players announced a further reduction in payable fees. Definitely applicable to newly recognised consultants in January 2015, the fee reduction does not apply to those recognised previously. Ot at least it didn’t.
But it does now.
The immediate retort from another very well established MHM client was to pass any reduction on to the patient. That’s all well and good but not if she is fee assured with the insurance company concerned. I actually checked just to be sure. Yep; if a fee reduction is passed on to a patient by a fee assured consultant, the consultants recognition may be put at risk.
None of the above means MHM agrees with insurance companies reducing fees – even though market forces may on occasion be the root cause of such reduction. By all means argue with the insurance company. And I already am.
But…don’t rely solely on that argument and assume the argument fees should not be reduced will be successful. It might. There again it might not.
Instead make sure you are charging the very maximum you can. Make sure you are charging for everything you do. If the surgery takes twice as long as expected, request an uplift fee. If a double consultation is required, charge for a double consultation. Its not as difficult as you may think it is.
And don’t forget to do a sanity check each month. If you think a 20% reduction in fees is bad, consider the 100% reduction if you fail to charge an entire consultation.
Whilst the question of where fees will go will be considered in future blogs, its important before even thinking about your fees to make absolutely sure you are charging the right fee already. You’d be surprised how many aren’t!!!!
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It’s great when a patient pays cash – on the way out he or she produces a roll of £10 notes and pays in full. It happened just before Christmas to an MHM client.
Couple of items to remember, however.
1. The consultation still needs to be invoiced – unless of course, you want HMRC to raise serious eyebrows (and you DON’T!!)
2. The cash has to be accounted for
It was this second point that caused a wry smile.
A sanity check picked up the consultation and an invoice to the self-funding patient was sent. With the result a most irate patient phoned MHM. So where was the cash?
Being just before Christmas, the MHM client had gone out and bought some ad-hoc Christmas presents with it. He’d clean forgotten the extra £150 in his wallet was actually practice money. It should always be treated as completely separate from his own personal money and banked into the separate practice account he has as you should have too! But he’d forgotten.
Thus the MHM client today had to take out of his own bank account and pay into the practice account £150 prior to MHM emailing a receipted invoice to the patient.
It was a very nice bottle of Merlot though – I really enjoyed it.
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August is the silly season with people on holiday at various times throughout the month, as we all know. Returning in September it’s catch up time!
Assume your practice secretary is on leave for the last two weeks of August, therefore, all clinic lists have to be invoiced for the last two weeks of that month and thus a particular patient’s follow up appointment invoiced.
Standard practice in such a case is to check if the initial consultation has been paid.
In this example, the initial consultation had not even been invoiced as the clinic list for that day hadn’t been supplied and audited against the invoice register! If it had it would have been discovered that none of the consultations for the day had been invoiced.
And the total clinic was worth £1,450.
Thus whilst shortfalls/excess/non-payment may cost the consultant money, not raising an invoice is 100% guaranteed to lead to non-payment.
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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.
Instea,d 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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