A few weeks ago, I was checking what was happening with shortfalls and excess since the start of the year. Using a single private consultant surgeon as an example:
Week ending Friday, October 25th, 2019: out of 15 consultations 4 came back with excess/shortfall deductions. The total £575.
So for a total of £2,500 worth of outpatient consultations £575 or 23% came back short.
Looking back to the same week in 2018, the number of shortfalls/excess was considerably less.
The question as to why this is happening is not the immediate concern although I will blog about that next week if anyone wants me to?
The concern is what you should do about it.
If 23% of submitted invoice values continue to come back as shortfall or excess, the downside and potential loss to a consultant surgeon 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.
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. The point is 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 care.
This is not a debtor I’m talking to on the telephone.
It is a PATIENT!
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.
That’s 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. A challenge that will get bigger in my view.
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.
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Recently I was reading an article in a business management magazine.
The article highlighted some of the challenges faced by small business owners when they start.
But it could also have been written about a consultant surgeon starting a medical practice.
The article illustrated how many small business owners attempted to start their business without assistance.
It is therefore common subsequently for the business to struggle with, for example, a lack of customers or a lack of cash.
This is normal for a consultant surgeon starting a private practice too.
It is not easy to start a private practice. There is a huge amount to be considered.
The basic rule is that if it can go wrong it will go wrong.
It happened when I formed MHM too.
Despite 35 years worth of managerial experience in running a business for various employers, I was used to ringing IT and having them install a new computer.
As a small business, ALL of that had to be done by myself. I soon realised, even though it cost, it was much better to go out and find someone who DID know what to do.
The first item in the article stated the first challenge facing a new small business is a lack of clients.
The same situation a newly established private medical practice faces too.
The second item was the lack of cash.
When I go meet a prospective client both are mentioned. Regarding the second point, the amount of cash generated by the small number of patients is nowhere near what was expected.
Yet I recollect when speaking to a colleague who specialised in marketing for consultant surgeons, most practices do not have a process in place to utilise the positive experience enjoyed by existing patients.
Their lack of new patients could be helped by using testimonials from current patients. The new practice does not have the right marketing strategies (both online and offline) to attract patients consistently.
Instead, marketing is left to drift.
My colleague is an expert at medical marketing yet she suffers from consultants believing she is too expensive to engage.
Alternatively, the new private consultant surgeon has a conversation with a colleague who has an established practice.
Hopefully, this pays dividends but it does suppose the established surgeon is maximizing his own marketing efforts.
Precisely the same happens when the subject turns to medical invoicing.
Many newly established private medical practices assume the invoicing – the “accounts bit” – is just as easy as marketing.
It will sort itself out in the end. If it doesn’t they ask a colleague how they do it.
Once again it assumes the colleague is managing his billing correctly.
Sadly he may not be.
The paradox, therefore, is that many consultant surgeons when they start out, make the same mistake as I did with my IT requirements when I started.
Two weeks and a few hundred YouTube videos later, I bit the bullet and called someone who DID know.
It cost me £150 but within ONE day I had all the systems up, running and working very efficiently.
The old adage of “if you think hiring a professional is expensive, try hiring an amateur” springs to mind.
Yet many private surgeons, by attempting to manage their own medical invoicing or asking their medical secretary to do the billing to an expert standard, make precisely the same mistake.
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There are numerous occasions when a consultant can charge for follow-up consultation and a minor surgical episode.
But it is important to understand which private medical insurance companies will allow such a combination and which won’t.
Otherwise, you may well be missing out on a fee.
Take CCSD Code W9040 – an injection into soft tissue – as an example.
Insurance company A says a W9040 attracts a fee of £50 and will allow it to be charged alongside a £150 follow-up consultation.
Insurance Company B says a W9040 attracts a fee of £108. However, it will NOT allow it to be charged alongside a follow-up consultation.
The total charge for W9040 with Insurance Company A = £200
The total charge for W9040 with Insurance Company B = £108
If the consultant surgeon does not realise Insurance Company A will allow a charge for the follow-up as well and only charge the W9040 fee of £50 they will immediately be £150 out of pocket.
Don’t expect the Insurance company to correct your error.
They won’t. Why should they? After all, it’s your job to ensure your invoices are correct. Nobody else.
Another example: CCSD Code S0820 – a curettage of lesions
Insurance Company A says an S0820 attracts a fee of £325 but will NOT allow it to be charged alongside a follow-up consultation
Insurance Company B says an S0820 attracts a fee of £107 and WILL allow it to be charged alongside a £150 follow-up consultation
The total charge for S0820 with Insurance Company A = £325
The total charge for S0820 with Insurance Company B = £257
Once again, if the consultant surgeon does not charge Insurance Company B for the follow-up AND the episode he or she will immediately be £150 out of pocket.
To further complicate matters, and using the S0820 as the example, note that Insurance Company A set the fee for the S0820 only to be £325. Insurance Company B set the charge at £257.
If in error, the Consultant Surgeon charges Insurance Company A with £257 (insurance company B’s fee) then the consultant surgeon will undercharge and only be paid £257.
That is what they have asked for and that is what Insurance Company A will pay.
Thus it is vital if a consultant surgeon is to maximize the revenue generated by his practice that he understands at all times what he or she can and cannot charge for.
He or she must also understand fees can and do differ between insurance companies.
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A group of surgeons I know is having problems getting paid by insurance companies.
Not just an individual insurance company but all insurance companies.
The practice manager claimed there were many invoices unpaid by insurance companies 3 months after the consultation or episode date.
This was all the fault of the insurance companies who simply do not want to pay.
I found this odd as in my experience ALL the insurance companies I deal with pay well before 3 months have elapsed.
The practice manager therefore altered the patient’s terms and conditions to read “patients will be asked to pay anything not settled after three months”.
This is, in his words “a long stop” and would prevent the issue arising.
I’m not convinced however putting such a plaster over the wound is the correct action to take.
I’m definitely not convinced a “long stop” will prevent the problem because it will allow the invoices to become three months old and then do something about them.
I raised the following two points with the consultants and their Practice Manager:
It’s this second point that is the more relevant of the two.
Insurance companies are NOT the enemy.
Of course, I disagree with many of their fee reductions.
I also disagree when they decree certain multi procedures are now deemed to be part and parcel of each other.
The reason for my disagreement is obvious. I’m here to get the maximum amount of revenue for my clients.
Anything that reduces such revenue is not good.
Nonetheless, insurance companies should not be treated as if they are the enemy.
Insurance companies WILL settle a claim within 3 months. I can honestly say I don’t have a single invoice for one of my clients sent to an insurance company still unpaid after three months.
So why are the group of surgeons referred to earlier having problems and introducing the “three-month” rule?
Without even drilling too far down into how and when the surgeons were invoicing, I can tell you the probable cause and why they subsequently feel the rule is necessary.
That is why the invoices are not being paid earlier than the consultants are currently experiencing.
It is all about getting it right the first time.
The first means having a clinic list or a theatre list invoiced promptly with all the details required by the insurance company appearing correctly on the invoice.
Putting the effort in upfront always generates the best results. It may be tiresome and it may be an inconvenience to have to stop, make a phone call so you DO have the correct details but it pays in the long run.
Its also all about 30 days after the invoice has been transmitted to an insurance company if it is still unpaid, getting them on the phone and asking if there is a problem.
If there is, it gets sorted immediately.
In other words, the invoice is not allowed to be dated more than three months from the episode or consultation date.
Consider it this way.
If you invoice quickly and invoice correctly, the number of potential issues that may delay payment reduces considerably.
You simply must make it easy for a private medical insurance company to deal with your invoices. I actually said that to a consultant surgeon recently who wasn’t sure he agreed until I asked him if he liked money or not?
Obviously, he said he did.
Therefore, my statement was correct.
As regards the consultants who have now introduced the “three-month rule” the rule itself should be entirely unnecessary.
The cause of the problem should be examined and steps are taken to prevent the invoices from becoming more than three months old.
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I’m used to insurance companies declining to pay a consultation charge for an Orthopaedic Surgeon within 10 days of surgery.
The reality is that this does not impact only on Orthopods.
I’ve seen it happen with GI Surgeons. And I’ve seen it with ENT clients.
It’s the very reason before I invoice consultations within 10 days of treatment, I ask if the consultation was “routine”. Or if there were additional medical reasons.
But it is only the consultant surgeon who knows why the consultation took place.
If routine, a post-surgical follow-up within 10 days, might not get paid.
If on the other hand there were medical reasons, then it is possible.
Call the insurance company and provide evidence on WHY the consultation was necessary.
Nine out of ten times you will get paid.
The insurance company is NOT the enemy.
But what does throw me is when it is an initial consultation that has been declined because:
“Under the patient’s policy benefit is only payable when treatment is related to an eligible in-patient or day-patient stay within six months.”
How can an initial consultation be refused under such conditions?
What I’m actually being told is the consultation is not covered under the terms of the policy.
That is different.
I did suggest to the insurance company it amended the wording to read: “initial consultations are not covered under your patient’s scheme”
Where I have the problem is asking an unnecessary question. If the insurance company had made it clear WHY the consultation was declined there is no reason to call.
In the time I’ve taken to resolve the query I could have called the patient and I could have obtained payment for the declined consultation for one thing.
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Flip the question on its head.
Would you pass over your debit card details without knowing how much is going to be charged to it?
99.9% of people would say NO.
That’s today’s blog over then.
Or is it?
Because how do you know how much you can charge anyway?
In the case of self-funders, you can charge whatever you want.
Contrary to popular belief there is nothing to force you to charge as little or as much as you want.
Whether you’ll get paid as much as you want is a different matter for the self-funder has a choice.
He or she can either agree to pay the fee you quote or they can decide not to.
It’s that simple.
So, consider the following. You are a GI Surgeon and want to charge £250 for an initial consultation. But your colleague GI Surgeon down the road only charges £150.
Which is the right amount?
They both are.
It’s up to the patient which one they accept.
I’ve actually known some patients pay a higher fee because a particular consultant saw their neighbour last year and “he was lovely”.
Conversely, I’ve also known as patient decline to go see a surgeon because they said the fee was too high compared to those of another surgeon.
The original question however remains. Should you publish your fees?
In the case of self-funders, you should.
In the case of insured patients, you should state – or publish – that your fees will be in line with those stated by the patient’s insurance company.
I once debated this point with a consultant surgeon who forcefully stated it was wrong to publish fees.
Because, in his view, it might put the patients off.
That seriously worried me.
More specifically, the thinking behind it worried me.
If your patient isn’t told how much the fee is before the consultation and then decides, realises or even claims they can’t afford that much what position does that leave you in? Not a very nice one in my view.
Patients do not, however, base the decision to see a certain consultant only on price.
There are a whole host of reasons why they chose to see one private consultant surgeon over another. Recommendation. Geography. On-Line reviews. They are just three of many different reasons. An additional reason is of course cost.
But it’s not the only reason.
Therefore, tell your patients how much you charge.
After all, would you buy something without knowing how much it cost?
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Keep it quiet but I’m a virtual cheater!
First of all, I’m a virtual business.
I’m not physically based in my client’s offices. In some cases, I’m hundreds of miles away so I can’t walk down the corridor and tap on a door to speak with a client.
Instead, we communicate by email. We also use a really old fashioned device called a telephone and actually speak to each other. Most of the time that is good enough because normally, as a consultant surgeon, my client is either with a patient or in theatre.
So I can’t exactly knock on the door anyway.
Simple. I offer to go meet my clients and have a face to face meeting with them.
It’s important for both the consultant and I this happens.
Because over a coffee or lunch you can talk through any strategic decisions that have or are coming up.
More important than that though, you actually get to know how the client feels.
For example: am I delivering what they expect of me?
How do they feel about the service for which they are paying?
Are there any areas where the client is expecting more or sometimes fewer results?
It gives me a chance to ask questions and listen to what is being said. And it gives me the chance to respond.
It’s worth it just to listen. And listen intently.
Not with a view to interrupting but with a view to fully understanding what the client is thinking and saying. And why.
It would be very easy for me to only send reports by email to a client and ask for comments.
I do that every week anyway and sometimes the client responds with queries.
Most of the time, he or she doesn’t.
The quarterly meetings (sometimes only twice a year with some clients) makes it much easier to produce excellent results for my client.
For example, I have one client who does not want an excess payment chased from an elderly patient under any circumstances.
Excess payments for all other clients are to be processed every week as standard.
He mentioned this to me at the first meeting we held after I started working for him – 3 months after I started working for him!
Another client isn’t bothered about the age of the patient and wants excess amounts chased just as soon as possible.
A third client likes to hear which patients have an excess, how much and then decide if they can be chased.
I don’t mind which.
I should though because the more the client gets paid, the more I can charge the client.
But its the client’s business and not mine.
Yet all three examples were only identified because, even though I’m a virtual business, I went to meet the client. I listened to precisely what the client wanted and then did it. Even then there are items that require clarification and sometimes email is not the best medium to use.
Modern technology is great.
It really is. I can both send and receive so much data it is untrue.
I can check a fee online in a matter of seconds (I guess it does help that I’ve got access to all the insurance company fee structures though)
Weekly reports are sent to clients without breaking into a sweat even.
Yet all these to me are support roles for nothing ever will or should even match the usefulness of actually meeting a client.
You cannot get the same level of understanding from email. You may get close after speaking on the telephone but in my view, you can’t as a virtual business beat actually talking face to face with a client.
I told you I was a virtual cheater.
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I’m a contractor.
I provide an outsourced service for my clients.
I run my business to generate an income for me.
Notice all three of those sentences started with the word “I”?
But when I (sic) go and see a potential new client or even an existing one, I always remember it’s not what I want that is important. The word ‘I” e.g. generating an income for me, is the last thing of interest to the potential client.
What is important is to never forget the potential or existing client is much more interested in what I can do for THEM.
It is truly surprising the number of businesses and indeed individuals who forget the person to whom they are speaking is interested primarily in one thing THEMSELVES.
Whilst this does not mean the entire world is full of totally selfish people, it does mean that people are much more interested in what I can do for them than what having them as a client can do for me.
All of my clients are medical professionals.
Without stating the obvious, they all have their patient’s well-being at heart.
But that does not mean they have my wellbeing at heart because (a) I’m not a patient (b) I need to produce results for them.
If I were a patient it’s pretty much guaranteed they would have my interests at heart.
But I’m not.
I need to produce results for my clients otherwise I’m history.
Recently I blogged about a potential supplier who didn’t return phone calls to me. During the final conversation and in a desperate attempt to secure my business he came out with the classic:
“But Pete your order really IS important to me!”
That had the opposite impact than he desired for I’m not in the slightest bit interested if it’s important to him.
I’m only interested in what giving my business to him can do for ME.
Think about it. You don’t walk into Starbucks for coffee because you are interested in them.
You walk in because you want a coffee.
By all means, Starbucks will satisfy your thirst in pleasant surroundings too but never will they think you’ve gone in just to help them sell coffee.
It is just the same as my clients are only interested in what I can do for them.
And I never forget it.
Having said all that, I recently had a bad chest infection. Being self-employed you can’t call in sick so I duly attended a meeting with one of my clients.
He is very interested in the results I produce for him. That is why he uses me.
He was pleased to see HIS business was in good hands. A good result for both of us!
Afterward, though he started asking questions about my cough, cold, how long I’d had it, etc.
He then went on to give me some antibiotics.
I did think it was funny that I’d gone to see a client and ended up having a medical appointment with him.
Especially as he’s a gynecologist.
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We all hear that many times during the day.
It’s a pain but sometimes it literally is a case of not being able to provide an answer there and then. In itself that is not a problem.
Where it IS a problem is when you don’t get the return phone call.
Personally never mind it being unprofessional to not return a call, I think it is simply rude. Often it can result in a loss of business too. For example:
Recently I was approached by a potential MHM supplier.
We’d done business before. The supplier was keen to provide his services again so we agreed on a meeting. I have an existing supplier but I have to look at all avenues.
Sadly, and these things happen, the potential supplier had to cancel and said he’d get back to me with an alternative date the following day.
But the next day came and went without a call.
So did the day after.
Therefore I called his mobile and left a message for him to call me back. He didn’t. The following day I called again. Whilst he answered he wasn’t at that precise point able to offer an alternative date. But he would call me back “this afternoon” You guessed it, he didn’t. The next day I left another message to call me. He didn’t.
Skip forward to the next week. He finally called me to re-arrange the meeting.
It did occur to me whilst all this was going on that I might not be a significant account to him. I only paid him £200 a month previously. But that is £2,400 a year.
It’s also £2,400 worth of business he won’t be getting off me. I declined the meeting.
As I pointed out to him this was not because I was being difficult or vengeful or even showing my irritation.
It was solely because, to me, his lack of manners and his haphazard approach had not inspired any confidence on the future delivery of his service.
A service incidentally that not only I use but all of my clients could potentially use in the future.
All because, and to quote him directly, “I haven’t had the time all week to stop and return your call”
I resisted the temptation to point out that was his problem and not mine.
I also resisted the temptation to point out his comment made me feel my £2,400 a year wasn’t worth it to him.
I’d have actually preferred a call saying a £2,400 per annum contract wasn’t big enough for him. I would have respected that even.
I mentioned this tale to a family member last evening who happens to be a Regional Sales Manager for a large local company.
He was horrified. Indeed he advised if one of his sales team had done something like that, they would have been invited to consider their future elsewhere (Ok – he put it somewhat stronger really!) I have to agree.
Not returning a phone call is very unprofessional and can very easily lead to a loss of business.
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There are only 24 hours in a day.
All of my guys are incredibly busy. I’m amazed at the volume of work they get through in a single day. They are either on-call, doing a ward round or in theatre.
Then they have to see their private patients.
That explains why most of them call me either very early in the morning or in the evening. One prefers a Saturday morning. It doesn’t bother me. It’s my job to fit in with them and make their life easier.
Recently, however, I was asked to review the private practice of a consultant who was having serious difficulties generating any cash into his practice.
And following my question to his long-suffering medical secretary, it didn’t take long to establish why. The question was: what is the biggest problem you have this week. The reply said it all:
“I never get a response to the queries or receive the information I need after I’ve asked Mr. Surgeon. He always seems too busy to deal with the things I need”
Yet most of the information the med-secretary needed was fundamental to generating cash into the practice.
For example: two clinic lists from last week were still unprocessed (result: no invoices sent out) or remittances from an insurance company (no idea who had or hadn’t paid) or the post Mr. Surgeon picked up and put in his bag one day last week (it had cheques from patients in it)
So I sat down with Mr. Surgeon and asked him what he thought about it. His response was a classic: “I just don’t have time to deal with all that. My private patients are paying to see me so they must come first”
The stark reality is he is right enough to be dangerously wrong. He is right as regards putting the patients first but he needs to ensure his administrative support is first-rate too.
The reason Mr. Surgeon is having difficulty generating the cash due is in him not dealing with such issues as the missing clinic lists or not passing over remittance advice.
Mr. Surgeon needed to make very sure, the support facilities of the practice were dealt with. The word “support” suggests these things can be demoted to a “Too busy to deal with that and they are not that important so I’ll deal with it later” category.
Eventually, they catch up with you. In the case of Mr. Surgeon, they were the reason he was struggling to generate cash into his practice.
Compare and contrast that with another real-life MHM client: Mr. B Surgeon. He is very different from Mr. A Surgeon save curiously they see a similar number of patients each week and are in theatre on the same day too (but in different parts of the UK)
Mr. B Surgeon will send his clinic list the day he sees his patients. His theatre lists arrive the same day too.
All of which means his invoices are out the proverbially electronic door within 24 / 36 hours.
In the unlikely event, there are queries, a response comes back to me either that same day or at the latest the next.
His cash flow is many, many times greater than Mr. A Surgeon.
In case you are wondering why I don’t have such issues with MHM clients its because every single week my clients take their post or clinic lists etc scan them to me and promptly proceed to forget about them thereafter.
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A Consultant Surgeon performs an AB1234 worth £525.
At the same time, he performs a DC2468 worth £576.
The patient is insured so an invoice has to be submitted for payment.
Therefore you have to calculate the fee payable by the insurance company.
The total is £1,101.
You can’t charge a total of £1,101 i.e. both.
You can only charge 100% of the first code’s fee (£525) and 50% of second code’s fee (£576) i.e. £525 plus £288.
Total is £813.00
The problem though is that fee calculation is also wrong.
You should charge as follows – 100% of the higher fee and 50% of the lower fee. In the above example, it’s been calculated the wrong way round.
The correct calculation is:
£576.00 for the DC2468
£262.50 or 50% of the AB1234 fee
£576 plus £262.50 =
The potential gain for the consultant is, therefore, £25.50.
Or look at it another way, if you charge it the wrong way round, the consultant will undercharge and loose £25.50
It becomes a bigger issue as most surgeons perform the same procedures many times a month.
The same error repeated 10 times costs £255 each month.
How easy is it to make such an error?
Very, very easy.
If the consultant surgeon supplies a theatre list most likely he’ll have the codes written down.
But it’s a danger to assume they are written down in the order they should be invoiced.
You must check them and make sure you are billing codes in the right order if you are to ensure the consultant gets paid the right fee for his work.
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This issue came up recently with a consultant surgeon.
How are benefits and fees accounted for against a patient’s package?
Consider the total benefits payable under a patient’s policy. For example, the benefits payable is £100.
It could be more. The fees mentioned below could be higher too.
Against such a benefits package, fees are deducted thus:
£20 is paid out. The total benefits figure reduces to £80.
Subsequently, the patient requires surgery. £50.
This is also paid.
The accumulator reduces to £30.
Finally the hospital tenders their account: £20. The gasman submits his: £10. The benefits accumulator, therefore, reduces to ZERO.
The benefits package is equal to the fees.
If the initial is £21, the surgery £51, the hospital £21, and the gasman £16 then the total fees = £109. Against a total benefits package of £100.
Thus, if fees exceed the total benefits a shortfall will be created.
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After a recent presentation, a private consultant surgeon telephoned me. He wanted all his fees checked.
He heard about the MHM fee checker from a colleague who had attended the presentation so he wanted to commission a full review of his fees.
But he wasn’t so much a colleague of an MHM client. More he was married to one!
The standard charge for doing this is £100; sometimes it takes a few hours, sometimes it takes a whole day.
But as the husband of a current client, he got a freebie
To do it accurately however, you literally have to shut the door and have a “do not disturb” sign also.
You first need to know precisely where to look!
Especially with this surgeon as I calculated he had 204 separate fees to check.
It is very much a case of paying attention to the detail relating to each fee. This one took me about 6 hours and was emailed to the consultant on the same day.
During those 6 hours, I identified 2 fees that were wrong.
Save the fees published by the two insurance companies concerned were actually HIGHER than the consultant had been charging.
He had undercharged for his services.
In one case he had undercharged by £150 (21%)
In the second case, he had undercharged by £21 (16%)
So he immediately amended his fees and started to charge the correct amount.
He called me this morning; the last working day of the month.
So far and by using the correct fees he had charged and been paid an additional £513.
Of course, fees can go down as well. Sometimes the consultant’s fees are absolutely correct too.
But if they go UP you are literally undercharging for your services. What made it worse for the consultant concerned is that the fees had gone up at the end of September so he estimates he has missed out on around £1,800.
Look at it this way and work the maths out. He has earned an additional £513 this month. Less the £100 it should have cost him (my fee) he is still £413 better off.
I should have charged him after all. Nah!
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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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Most MHM clients ask us to look at self-funders when we start looking at the amount of money owed.
Self-funding patients are a very common reason MHM is called in the first place.
With the self-funding market increasing, therefore, it is important to understand the major reasons self-funders can be a problem.
What are the three most common reasons a self-funder hasn’t paid and has become a problem instead?
When the patient is contacted as a self-funder, he/she claims never to have received an invoice originally.
Whilst this is obviously easy to rectify (send them a copy!) how many medical professionals are 100% certain the invoice was sent in the first place?
Obviously some self-funders will be naughty so to speak but generally speaking, they will pay if sent an invoice.
So the first common reason is the self-funding patient hasn’t been invoiced.
Any consultant surgeon must be confident invoices have been raised and sent to the patient.
Sadly numerous times, we are told invoices are raised only to discover they have NOT been raised.
That is why it is vital to check the clinic list and be 100% confident everything has been invoiced.
We do it the old fashioned way – because old fashioned works!
We take the clinic list and draw a red line through each appointment and write the invoice number we’ve produced against the patient’s details. It’s old fashioned. It’s simple. But it works. It also applies to insured patients of course.
In 99.9% of cases when a patient arrives at a private hospital he/she will be asked to provide a swipe of their card.
Sadly on numerous occasions, the patient is unaware that the card only covers the hospital fees.
It does NOT cover the consultant’s fee.
Numerous times, the patient remains unaware of the debit card they’ve passed to the hospital does not cover the consultant’s fees.
The MHM solution is when the patient first makes contact with the consultant, he/she is advised the card swipe will NOT cover the consultant’s fee.
This should be followed up by a note on the consultant’s invoice to the patient stating: This invoice is NOT covered by any debit/credit card details you may have provided to the hospital.
The second common reason – the patient thinks they have already paid
On frequent occasions, a self-funding patient has called upon receipt of the consultant’s invoice to say they are actually insured.
This must be addressed immediately because invoicing the wrong person is absolute insanity.
The cause is a failure at the patient’s initial point of registration to ensure the correct details are taken.
This goes straight back to how the patient is processed at the point of registration.
The third common reason, therefore, is a major failure in the consultant’s registration process.
This simply must be addressed and not left to chance. If this stage is 100% correct, many problems are not allowed to occur.
If the above three items are correctly managed and a firm process put into place to manage the minority of self-funders who don’t pay, the number of outstanding self-funding invoices drops in most cases by over 80%.
Three basic simple steps in managing the process of a self-funding patient that sound unimportant but for a consultant surgeon they are definitely not unimportant if you want to keep self-funding patient outstanding accounts to a minimum.
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In one single sentence the cornerstones of how a private consultant surgeon can achieve the financial reward for all his efforts.
Every single time you perform an outpatient clinic the details are passed on.
Invoices can then be raised and sent to either an insurance company or a self-funding patient for payment.
Every single time.
Do NOT make the mistake of collecting them ready for “later in the month” because “later” never comes. Or at the very least you are risking an issue coming up which will either delay or cause invoices not to be raised at all.
Instead after every outpatient clinic, the details are passed over for invoicing. I’ve got some clients who actually take a photograph of their clinic list on their smartphones and send it to me securely. It’s a ritual with them.
Is it any surprise such private consultant surgeons get paid quickly? Other MHM clients have the clinic list (s) sent over every Friday afternoon without fail. They get paid quickly too.
It’s a ritual for them.
Contrast that with another MHM client who sends all the data over infrequently. Sometimes at the end of each month or more often than not every couple of months or so.
This client does not get paid as frequently as the others. The reasons are somewhat obvious.
Ritual is also applicable when dealing with excess or shortfall payments. The moment you are notified, you MUST action them for the longer they are left unattended the danger of non-payment increases.
I check every single remittance advise a private medical insurance company sends in. Any and all shortfalls/excess deductions are actioned the very same day.
It is a ritual.
Religiously – MHM check every single piece of data BEFORE an invoice is submitted for payment.
The policy number is checked to see if it has changed.
The patient’s date of birth and postcode is checked to see if that has altered.
The CCSD code is checked and the fee also checked against the appropriate insurance company’s fee schedule.
If there is a discrepancy, it is corrected.
Then – and only then – is the invoice submitted for payment. Religiously.
So how does just doing these two things contribute so much to a private consultant surgeon achieving his rewards?
Both cut down the opportunities for payment to be delayed, queried or not made substantially.
The crazy thing is the one piece of “equipment” used more often than any other at MHM to ensure both are achieved with the minimum amount of distress both to MHM and its clients?
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What follows is absolutely real and why medical invoicing can be more troublesome than it need be.
One of my guys ran an outpatient clinic last Thursday
The clinic list arrived with me on the following Monday. There were 8 patients: 3 initials and 5 follow-ups.
Within 30 minutes 7 invoices had been produced and delivered to the various insurance companies. But that final EIGHTH invoice caused significant issues. Why?
The patient’s insurance details had not been recorded correctly.
So I rang my client’s medical secretary and ask if she knew what they were. The FIRST phone call – I’m told the patient is with insurance company A but did not know his policy number. Length of the phone call: 5 mins
A SECOND phone call was necessary. This time to the insurance company. I was on hold for 11 minutes to this particular insurance company which is about normal for an insurance company. Some are 4 – 5 minutes. With some, you are on hold for considerably longer.
Once I got through however despite having the correct name, date of birth and postcode I was informed the patient’s policy had lapsed.
Length of the phone call: 11 minutes plus 5 minutes = 16 minutes.
A THIRD phone call was made. This time to the patient. Answer machine so I left a message to call me back. He did. The patient confirmed it was totally the wrong insurance company. He told me the correct insurance company but did not know his policy number!
Length of phone call(s) 5 minutes
A FOURTH phone call to the other insurance company. Placed on hold for TWENTY-THREE minutes! Finally, get through and I’m advised the correct policy number, etc. Invoice raised.
The total length of phone calls: 49 – FORTY-NINE MINUTES!!
There is no problem with spending 49 minutes on the phone; none whatsoever.
But just consider the problem if the medical secretary at the same time as that had patients trying to speak to her? Or she had correspondence to get out? Or she had clinics to book?
She would have struggled for sure.
Finally, consider how much easier it would have been if the patient had been asked to bring a copy of their insurance details with them when they registered.
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Don’t say – “all the details should be obtained”.
Say “all the details MUST be obtained”.
In other words, turn “should” into a must. But why is this so important? And why must you do it every day?
Many clients have asked why mhm obtains payment so quickly from insurance companies or from a self-funding patient.
The number one reason is that I don’t use the word “should”.
I use the word must.
And that is why it is so important – the consultant surgeon gets paid quicker. When I work alongside a medical secretary – the most underappreciated person in any medical practice normally – I emphasise the absolute need to get all the patient’s details.
For example: make sure the details are correct, make sure the patient’s policy number is correct, make sure the patient’s date of birth and postcode are correct.
When should this be done? NOW. It should be done every single time you have a patient in front of you or are reviewing a patient’s details.
Once all the details are correct – as they must be – the chances of getting paid increase dramatically.
This isn’t done in an aggressive manner at all. Far from it. In fact, 99.9% of all med-secs understand the reasons why and are only too glad to help. Most likely because most med-secs do not like “accounts” or “having to chase for money”
In other words, it is a state of mind.
It is a state of mind supported by very strict adherence to a number of routines.
Actually the word routine itself is not strong enough.
It’s a discipline.
It is the discipline to make sure all the details are obtained when the patient registers. It’s the discipline to make sure the clinic list is sent down to me every single week.
And finally, it’s a discipline to make sure all the invoices are raised, checked and delivered either to an insurance company or direct to a self-funding patient.
And that’s why mhm clients get paid so quickly.
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I’ve been asked to revisit why coding is such a big part of medical invoicing.
It is integral because without the correct code the chances of getting paid decrease. It is unlikely if you wish to invoice electronically you will be able to invoice without a code anyway.
Insurance companies use medical coding to identify and detail a procedure. For example, an Orthopaedic surgeon will understand precisely what a Multiple arthroscopic operation on the knee is.
But that’s a lot to put on an invoice. Plus there may be variations in the episode.
Instead, use the code W8500. That will specifically identify the surgery you have done.
If you are planning to invoice electronically you won’t be able to input the whole description anyway.
So where do you find the code?
CCSD codes can be located on the CCSD website.
The Clinical Coding and Schedule Development Group (CCSD) consists of the five major healthcare insurers – Aviva, AXA-PPP, BUPA, Simply Health and Vitality Health.
Its main purpose is to maintain a common standard of procedure codes. Such codes reflect current medical practice within the private healthcare sector. They are published as the CCSD Schedule of codes.
The various insurance companies will, therefore, recognise the majority of codes.
However, a word of caution.
Whilst the example above of W8500 will be recognised, a CCSD code does not come with a suggested fee rate.
The fee rate for each code is up to the individual insurance company concerned. To find the correct fee for the code, you will need to check with that insurance company.
For example, the W8500 mentioned earlier carries a fee of £615 for one insurance company. For a different insurance company, the fee may be £550. If you charge £550 instead of £615 by mistake, you will NOT have your fee increased.
If however, you charge £615 when it should be £550, your fee will be reduced.
Whilst not so important for consultations, a CCSD code is imperative IF a surgical episode is required. The patient must quote the code to his or her insurance company when pre-authorisation is being requested.
When an invoice is sent to the insurance company, the code should appear on the invoice, This will reconcile to 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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An interesting question asked by a consultant starting her own private practice.
And a question I couldn’t really answer.
What I could do was interrogate, based on a month’s worth of outpatient clinic lists for existing clients, how long-established private consultant surgeons allowed for consultations.
A number of different specialisms were covered. They included: three orthopedic surgeons (one foot, one knee, one hand). An ENT surgeon. A gynecologist. A dermatologist A GI surgeon, and an ophthalmologist.
The average time for an initial consultation was 30 mins.
Some were under 20 mins. Some much longer. But the average was 30 mins. To further investigate why I asked each consultant why it took as long as it did?
And got precisely the answer I expected. Some patients required more time to examine, explain and discuss their condition than others. Not one consultant allowed a “maximum” amount of time.
When asked why, for example, they had allocated the length of time they actually had, most made the same comment. It was based on their experience together with the recommendations from colleagues whom they had asked.
To get an understanding from a private insurance perspective, I asked the same question of various insurance companies.
They too shared the view that 30 minutes was about right. All had no fixed time “allowance” for an initial consultation. Two, however, were concerned that one consultant only allowed 20 minutes for an initial consultation.
The same process was followed when the question of follow up consultation was examined.
Unsurprisingly, the time taken for a follow-up consultation was shorter.
The average time taken was 20 minutes. One consultant allocated just 10 mins; another 30 mins.
Yet across the various specialisms, the average was around the 20-minute mark consistently.
Again, insurance companies were asked the same question regarding follow-up consultations. Again there was no fixed time “allowance” for a follow-up consultation.
But the question remains for the consultant setting up her own private practice relevant. Why?
If she had allowed 60 minutes for a consultation, she would see only two patients per hour.
At say £125 per consultation, she would charge £250 per hour.
But if she allowed 20 minutes per consultation, she could see three patients each hour. She would be able to charge £375 per hour i.e. 50% more (£125/£250)
Whilst 60 minutes for a single initial consultation is most likely not required, it is the principle being looked at. The same would prove true of follow-up consultations if the fee were £95 per consultation.
Two per hour = £190 whereas three per hour = £285.
Paradoxically, I have a somewhat pragmatic view as I suggested to the consultant just starting her practice. It is highly unlikely she would have so many patients as to require the question to be investigated as we have done here.
No MHM client, I’m very pleased to say, actually cared how long the consultation took. And that is how it should be. They were only concerned with providing the best medical care and attention they can.
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