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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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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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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The patient arrives for the consultation. He hasn’t obtained a pre-authorisation.
Yes, of course, you should. Patient care must come first.
But the patient does not have a pre-authorisation! It does happen. It shouldn’t but it does.
How should this be handled? Ask the patient to immediately ring their insurance company.
Say the consultation was on Friday, January 24th and the patient calls the insurance company on Monday, January 27th.
The patient should make sure the insurance company knows when it took place.
In this example, the patient did not tell the insurance company it was Friday before.
When MHM tried to invoice, it was declined.
The consultation was before the date upon which the pre-authorisation was issued.
If the patient holds an insurance policy, which will not allow the backdating you’ll have even more difficulties.
This is not the insurance companies being unreasonable.
The patient has incurred liability on behalf of the insurance company yet the insurance company knows nothing about it.
Ultimately the patient is liable for the consultation fee of course so an invoice is sent to the patient.
The patient rings up (normally quite upset) and points out they are insured and are covered for consultations.
Numerous phone calls between the patient, the insurance company later, the issue is finally resolved.
The invoice is submitted to the insurance company and its paid in full.
It would have been paid without the hassle IF the patient had been asked by the consultant to tell their insurance company when the consultation was for.
If this is happening to you, it’s an issue you can address. Otherwise, you may spend 15 – 30 mins just sorting this out!!
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There a few things I hear that automatically set alarm bells ringing when I look at the billing process of a medical practice.
“I’ll take a look at it next week”
“I’ll get round to it in a bit”
“I’ve been meaning to look at that”
The final of those items was said to me recently.
I was sitting on a panel facing an audience of medical professionals.
Among the various questions was one relating to how to monitor the invoicing efficiency of a medical practice.
To me the answer is simple.
Before you can measure any part of a business, you must first establish a standard to measure against.
Which is what I said to the questioner.
I asked if he knew how many invoices he had raised last month and the total value of them.
Sadly he didn’t know either.
But, I continued, to improve the performance of your practice you must know how you are performing against whatever standard you decide is appropriate.
Now consider the issue of invoicing with a real MHM example. One of my guys – a private consultant surgeon – saw 25 patients between Monday, January 13th, and Friday, January 17th.
Therefore I should see 25 invoices.
That is an ultra-simple which makes sure everything is invoiced.
If I only have 23 invoices I have a problem!
But it also means of course at the end of this month I can add up the number of invoices and also tell the client how many patients he has seen this month.
Then we can compare that number with the number the previous year and see if it is higher or lower.
The introduction of such a basic, basic, basic management control isn’t a nicety.
It is an absolute necessity if you are going to manage the invoicing process effectively.
The audience member agreed fully but then the alarm bells went off when he said “I’ve been meaning to look at that for a while now”
He hadn’t because there always seemed to be some other problem to deal with.
That tells me his management controls aren’t as robust as they should be.
It also tells me he is suffering from one of the worst and easily avoidable causes of business failures out there:
Procrastination is even worse than having a backlog of invoices to raise because it diverts you from identifying a backlog is building up.
Procrastination is even worse than having no cash because it distracts you from raising the invoices and thereby getting paid.
Procrastination is the cause of the problem he has because various insurance companies have declined his invoices for treatment as the consultation was more than 6 months ago.
Set time aside every single week to make sure, you DO invoice and to make sure you review what is happening with YOUR money!
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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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We are in the people business.
That means you can’t run a private practice by email. Nor should you for we are dealing with people.
Reluctantly, that lead to one of the MHM clients having to dismiss his secretary in October 2019.
I’m one of the worst for trying to do things as efficiently as possible.
If I can’t see the point of doing something efficiently, I won’t do it.
But that does not mean I won’t answer the phone and speak both to patients and/or clients for they deserve some respect.
Ultimately, they pay my fees so they definitely deserve my respect.
It may not be the most efficient way of spending my time but nonetheless, if I don’t, I don’t make money. Simple really.
Yet the secretary referred to earlier didn’t understand that.
She was firmly of the opinion EVERYTHING could be done by email.
From answering a patient query to booking a patient consultation, everything had to be done (literally) by email.
When I called, the phone wasn’t answered. There was a message advising me to email her instead.
Potential or existing patients heard the same.
When she did reply – by email obviously – (normally the next day and that bugged me), her answer was often ambiguous. Thus another email was sent.
Another 24 hours and I received a second email that may or may not have resolved my issue.
Quite frankly if I had been a patient looking to book a consultation with her surgeon, I would not have been impressed that nobody could be bothered to even speak to me.
When I finally got to speak to her and complained she never answered the phone her response was magical.
She hadn’t got time to answer the phone because she had all these emails coming in.
So I risked certain death and pointed out, she was getting all these emails BECAUSE she wasn’t answering the phone.
Between January 2019 and September 2019, this particular MHM client’s practice hadn’t grown; indeed it had got smaller.
So much smaller that the client could no longer afford to employ a secretary and, instead, asked his wife to take over.
His wife started to answer the phone AND answer emails.
The number of emails reduced dramatically.
Patient numbers for October, November and December 2019 increased.
Thus far in 2020, patient numbers are going up again.
p.s. what inspired me to write this particular blog was a phone call I took from a patient this afternoon. I answered the phone and the very first thing the patient said was?
“Oh. You are a human being! I thought I’d get connected to a machine and have to press numerous buttons”
Think about that for a second, please?
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Not getting paid doesn’t happen by accident.
Something causes it to happen. There is ALWAYS A CAUSE.
If you leave invoicing until later (Friday for instance) it is very easy not to invoice at all. It can happen also if, for whatsoever reason, you leave invoicing until “tomorrow”.
Tomorrow turns into never.
Many times, I’ve been called in to examine and review the billing process of private medical practice and discovered an issue with invoicing frequency. So why is “tomorrow” “Friday” or “when I get the chance” the worst possible words for me to hear?
Nine out of ten times such an approach is a big clue as to the reason why the practice is not enjoying the level and frequency of cash it should be.
If you want to ensure your practice is paid promptly, the very first place to start is raising an invoice. It is crucial. And invoices should be raised DAILY!
Once a week is not helpful.
The danger in invoicing on a Friday or a Monday or only on any set day a week is if something happens that day – for example, the consultant needs a clinic booking urgently or a patient needs a letter immediately, then the invoicing gets left behind.
And that is normally the cause of the problems.
If invoices are raised daily should something happen to delay that ONE day’s invoicing, it is corrected the very next. There is no backlog.
Let me give you a real-life example.
Tuesday, January 7th a consultant ran an outpatient clinic and saw five patients. Three follow-ups and two initial consultations. £850 worth of consultations.
Yet invoices were not produced for this work until Monday, January 20th, – one day short of two weeks later!
Is it any wonder the consultant was extremely dissatisfied with the practice cash flow?
It didn’t take long for me to identify that on twice previous occasions over the previous few months one entire clinic list had NOT been invoiced (worth £725) and three initial consultations (worth £600) had also not been invoiced.
In the case of the initial consultations, insufficient insurance details had been obtained at the point of registration and remedy had been left until “later”!
In all £1,325 worth of invoicing had been missed.
No wonder cash flow was poor.
But before we go any further do NOT blame the medical secretary. She has enough to do. The phone rings or she has to meet and greet the patients. She has numerous letters to type.
That is precisely what she should be doing for she is there to ensure the “front of house” runs smoothly.
The error, if you will, is then expecting her to fit invoicing in around all that or, as was suggested to me, in her “spare time” WHAT SPARE TIME?
She hasn’t got any and nor should she.
In the above example, the solution was obvious.
Either get someone in to process all the invoices and the cash receipts or outsource it.
Private medical practice is a business. It must be managed as a business; end of.
Without putting too fine a point on it, failure to ensure the invoicing and accounts process is not 100% efficient is pretty much guaranteed to lead to the business having cash flow issues.
DON’T LEAVE IT UNTIL FRIDAY – GET ON WITH IT!!
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Two different MHM clients – both consultant surgeons – have been advised by a specific insurance company that the fees for their initial and follow up consultations are being reduced.
They are not amused, to say the least.
But what can they do about it? Nothing.
Actually, that’s not strictly true. In a perfect world, there is much they can do. But we don’t live in a perfect world. We live in this one.
In a perfect world they can, for example, pass any reduction in fees on to their patients.
Save of course their recognition agreement with the insurance company forbids them to do so. If they do they are at risk of de-recognition. Ah came the reply, the insurance company won’t find out. Yes, they will.
Or they can stop seeing patients referred to them by that specific insurance company.
In both cases during the last half of 2019 that is over £10,000 worth of referrals.
Both would suffer double percentage digit drops in private practice turnover. That is not good.
Both of these consultants, however, are by no means stupid.
Neither of them just reacts.
An immediate reaction is potentially the worst thing to do. Indeed many years ago MHM worked with one consultant who did just that when denied a fee by an insurance company. He even went so far as to tell the insurance company concerned unless they immediately put his consultation fees back up he would forgo his recognition with them and refuse to see their insured patients.
They didn’t so he did.
And immediately saw a 23% drop in the private practice turnover. Do NOT react.
What is required is a considered response to all the options.
In the case of the MHM clients, I calculated what the drop-in consultation fees would mean over a six month period against an assumption that the lack of referrals would lead to 25%, 50% or a 100% drop in patients from that specific insurance company.
In all cases, for obvious reasons, there was a loss. But at least that loss was now quantified.
It is worth noting that the drop in consultation fees would not impact in a drop of surgical fees because surgical fees were excluded from the reduction.
That said a refusal to see patients from the specific insurance company concerned due to consultation fee reduction would automatically lead to a 100% drop in surgical fees as clearly if a consultant does not see a patient, it is extremely unlikely he’ll take that patient into theatre.
Sadly there are only two options in reality: accept the reduction or don’t accept the reduction.
I’m afraid the insurance company really is in the driving seat when it comes to setting their fees and there is little a private consultant surgeon can do about it.
Many years ago a private consultant surgeon could charge what they liked and to a certain extent with a self-funding patient, they still can. However, with insured patients, those days are long gone.
Rightly or wrongly, those days are over.
So what should the private consultant surgeon do?
MHM suggests an analysis of how the reduction will impact on the private practice should be undertaken.
That will at least quantify how the reduction will impact on the private consultant surgeon in actual financial terms. All the data will be contained on a sales ledger and with the aid of an excel spreadsheet, it’s relatively easy to perform the analysis.
Such an analysis also confirms how the reduction will impact on MHM for MHM charges a percentage of what is actually paid to the consultant. If that figure is lower then the MHM fee will also be lower. In other words, the pain is shared.
Thus I don’t like it any more than the private consultant surgeon but I can’t do a lot about it either.
The bottom line remains to accept the fee reduction or reject the fee reduction.
That I’m afraid is the reality.
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Every single consultant I’ve ever met is dedicated to patient care and the best possible outcome for his or her patient.
But sadly that has little to do with the outcome of the practice as a business.
They may think it does.
But it doesn’t.
Patients reviews are ALWAYS good and they reflect clinical outcome.
Potential patients do actually read them and take the decision to see a consultant based, in some part, on good patient reviews.
But other than that, there are numerous other items impacting the business outcome.
Planning has a HUGE impact on the outcome.
Specifically, if you don’t have a plan you won’t be able to know if you have achieved the desired outcome anyway.
But what needs to go into the plan?
Sounds crazy but the aim of the plan should be to achieve the outcome, yet you can’t reach the outcome until:
a) you define what the outcome should be
b) you define the plan to achieve the outcome.
Just talking about it won’t be enough. It never is.
Unfortunately, far too many consultants start a private practice without deciding what their desired outcome is. Instead, they make reference to “making more money” or “seeing more patients”
But the smarter ones start by saying I want to make, for example, £5,000 a month (outcome) so I need to see at least 20 patients during that month.
It matters little if it’s £5,000 or £25,000.
What matters is they have a defined outcome with a plan to get there.
Then they start giving immediate thought and planning on how to see 20 patients a month.
None of which has anything to with clinical outcome!
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I hear this quite often.
Normally from prospective clients who call and want their fees reviewed.
They claim they have a colleague who gets £250 from BUPA or £350 from AXA.
But they have only been offered £136 from BUPA and £175 from AXA.
The first question I ask is what specialism are they in?
The second is what specialism is their colleague in?
This is very much a loaded question because I already know the answer to the first part.
BUPA paying £250 for an initial consultation and £350 for an initial consultation, tells me the colleague is a mental health specialist.
Then, and it happened last week, the caller tells me they themselves are an ENT consultant.
There is the answer.
BUPA and AXA pay more for a mental health specialist than they do for an ENT consultant or a gynecologist.
I do have a rye smile on my face when the caller points out, they are just as qualified as a gynecologist or as an ENT.
For what it’s worth I agree.
But the reality is, BUPA and AXA deem mental health specialists to be worth more.
The usual argument is that they spend longer with their patients. I have no idea if that’s correct or not.
But what I do know is those are the fee levels.
Arguing with either insurance company that the rules are misguided is, frankly, misguided.
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The other day I wrote of the importance of setting targets and then measuring performance.
Several consultants emailed asking what is, in my opinion, the most useful and important measure.
In all cases, the answer was the same.
THE most important measure is???
It doesn’t matter what specialism you are in, without new patients your practice will fail.
Therefore, you need to know:
2. Where are these patients being referred from?
It isn’t sufficient to know the total number of new patients last month.
You also need to know WHERE these patients came from.
But knowing, for example, 70% or 80% or whatsoever percent of new patients are referred from insurance companies.
You also need to understand which insurance companies are making referrals to you.
More importantly which are NOT.
If for argument’s sake, you are seeing 20 new patients a month via insurance companies, it is crucial to know which insurance companies?
More importantly, which insurance companies are not referring ANY new patients?
Then you can ask the question why not?
The self-funding market may well be the one which grew the most in 2019 and is forecast to be the highest grower in 2020 but that does not mean the insurance market should be ignored.
In fact, a second important measure is how many new self-funding patients and how many new insured patients.
Without both, the practice will struggle.
So the first most important measure in any practice is:
The second most important measure is:
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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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