Sometimes, getting more patients isn’t always the right answer.
The right answer is to get paid for the ones you have already seen.
Over the last three months MHM has been working very closely with an ENT consultant. His sole aim is to see more and more patients.
That way, he will make more money and retrieve the dire financial situation he has found himself in.
Thus he has reduced his consultation time down from 30 to 20 minutes. Therefore he’ll see one more patient each hour.
But the cause of his financial problem is not he doesn’t have enough patients.
He is owed a considerable amount of money. He is not getting paid.
Seeing more patients and not getting paid for them, will not help!
He needs to get paid for the ones he has seen as well as the new patients.
A simple cause.
Invoices aren’t being raised after each clinic. Instead, they are being raised every Saturday morning when “it’s quiet”.
But the problem with that is not all invoices are being raised.
Many of the patient details are incorrect. But his secretary can’t correct the details because many of the insurance companies she needs to speak to to get the right aren’t open on a Saturday.
Or if she needs to speak to a patient, she may or may not be able to reach them by telephone.
The very first thing to do is to make sure the details ARE correct. That is much easier than it sounds.
Then, she needs to invoice every single day.
In doing so she will identify issues quickly. Then she must resolve those issues the very same day.
It’s only by doing so will the dire financial situation the ENT has found himself in will get resolved.
Seeing more patients but not being able to charge for them, won’t resolve his problem.
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One of my major bugbears with medical practice is the ability to answer the phone.
Sounds simple. It is!
Yet many practices do not answer the phone. Instead, the call goes to an answering machine and then one of two things happen.
The call is never returned.
The caller rings another consultant.
The new patient wishes to see a consultant. Most likely he or she will have a choice of whom they see. It could be you or it could be a competitor. It is not a given they will choose you.
So what will be their reaction if they can’t make an appointment because no one answers the phone or can be bothered to go elsewhere?
They will call another consultant.
By all means have the option available for the patient to book online. I’m all for it. But don’t just rely on that.
We are in the people business.
And people like dealing with people. More accurately, they like to talk with people.
So answer the phone and talk to them.
It is inevitable that your phone will be engaged at some point or your practice will be closed for the weekend. Hopefully, the patient will leave a message.
But make VERY sure that call is returned.
If you don’t, potentially you will lose a new patient.
And if you don’t attract and keep new patients, frankly your practice is dead.
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Consider when the patient has contacted his/her insurance company and been issued with a pre-authorization number.
This does not mean, the insurance company will accept your charge.
This happened to an MHM client – a gynaecologist – a few days ago.
We spoke to the insurance company concerned.
They confirmed whilst they did indeed issue a pre-auth, this did not mean they would accept the charge.
In fact, pre-authorization had been refused.
Yet again the message came through loud and clear:
No argument from me on that one. It has always been so.
My issue though is why did the insurance company issue a “DECLINED” pre-authorization?
If they were not prepared to issue a pre-authorization then they should not have issued one at all.
This point was duly made to the insurance company. Their reply was poetic.
They had always done it that way.
I have the utmost respect for private medical insurance companies.
Most are extremely efficient and willing to help.
Whilst I’ve had numerous disagreements with all of them regarding fees etc, never have they implied or stood behind the “we’ve always done it that way” position.
But on this occasion, it feels very much like a case of stop wasting your breath!
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A common mistake made by a private consultant surgeon is undercharging for their work.
This is alarming when most consultant surgeons wish to increase their fees.
This always spins off into a debate regarding private medical insurance companies being the enemy.
Fees are always being reduced with the private surgeon being paid less and less.
That may be true sometimes.
It is not the right place to start, however.
The right place to start is to make sure you are charging the correct fee.
Such fee may be less than you want of course but, many times, be more than he thought you were entitled to.
Take the example of an orthopedic surgeon who contacted MHM to process her medical invoices recently.
She thought her consultation fees were too low.
That also may be correct.
But that was the consultation fee the insurance company was prepared to pay.
The orthopedic surgeon was unaware some of the insurance companies were prepared to pay a fee for minor procedures carried out at a consultation.
They would pay a procedure fee together with a fee for the consultation.
Whilst some insurance companies weren’t prepared to pay both fees, some were. Instead, the consultant had been charging ONLY for the minor procedure.
She had not been charging for a consultation as well.
The same situation was equally applicable to a private dermatologist just as it was applicable to a GI surgeon.
It is not therefore applicable solely to orthopedic surgeons.
It is applicable to many specialisms.
The issue, therefore, becomes one of: am I charging the right fee?
To confirm the fee is correct a review of procedure codes and the fee for the procedure code should be undertaken.
Both may then be compared against the fee structure of the private medical insurance company concerned.
Each code and combination of codes must be checked against the fee schedule of the private medical insurance company.
The often stated assumption that all insurance companies pay the same fee for the same procedure code should be rejected.
Take the example of a repair of the primary repair of Achilles tendon. Insurance company A pays a fee of £336 whereas insurance company B pays £405 – £69 more!
The orthopedic surgeon concerned was of the belief insurance companies paid out the same fee.
She had UNDERCHARGED by £69 as a result.
To return to the original issue of charging a consultation fee alongside a fee for a minor procedure, take a look at injection into soft tissue.
The same insurance company paid a fee of £108.
The orthopedic surgeon in question was unaware that a follow-up consultation could be charged in addition to the fee for the injection. Another £150 on top of £108!
Thus the correct charge was not £108.
It was, in fact, £258
To further illustrate the point a dermatologist may charge the very same insurance company, £91 for curettage of skin or lesion.
He or she may also charge a follow-up consultation fee in addition.
If the follow-up consultation fee is £100 (and it is for the MHM client concerned) the fee for the WHOLE event has doubled!
Thus the most common mistake in medical invoicing is not realising that fees can and do differ between insurance companies and also that some, not all but some, private medical insurance companies will actually and quite happily pay MORE for your work than you may be aware of.
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Two consultant surgeons apply for recognition by insurance companies.
They have been told by various insurance companies that the fees for their initial and follow up consultations are lower than they anticipated.
They are not amused to say the least.
But what can they do about it?
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.
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.
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 equal a drop in 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.
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.
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 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.
The bottom line remains to accept the fee reduction or reject the fee reduction.
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It is depressing the number of times I hear potential clients criticizing insurance companies.
In my experience the reasons normally cited are incorrect. Far from it.
I’ve lost track how often I’ve been told an insurance company won’t pay for something.
Yet when I ask if the insurance company has actually been asked IF they will accept a charge, the answer comes back that they have not.
I have all the private medical insurance companies on speed dial.
They need to be as I speak to most of them every single day of the week.
There are many, many things I’m already aware of.
There are also some things that I don’t know or more importantly, that may have CHANGED.
I ask them all sorts. For example – I ask them to confirm a patient’s policy number. I ask them to confirm why an invoice has only been partially paid.
Sometimes I ask them if I can or cannot charge for a certain medical episode.
Which brings me neatly to the W9040 code.
I was invoicing for an orthopedic consultant surgeon recently. His specialism was knees and during a follow-up consultation, he administered a W9040.
This particular CCSD code represents an injection into a joint or soft tissue.
The question arose if I could charge a particular insurance company for a follow-up consultation fee AND a fee for the injection.
So I called them.
The answer came back yes I could. I could charge £120 for the consultation and £50 for the injection i.e. £170.
The insurance company would happily pay such an invoice.
Compare and contrast that with work I was performing for a dermatologist recently.
This time the question arose of an S5210 (an Injection into subcutaneous tissue).
I’ve only recently started invoicing for this client and thus it was important to establish what could and could not be charged for.
More specifically, would the insurance company accept an invoice for the follow-up consultation AND the injection?
Yes, they would.
£125 for the consultation and £108 for the injection i.e. £233.
Remember however that I had asked ONE specific insurance company.
When I asked others the same question, some would NOT allow the separate charge.
What was concerning was previously the dermatologist had not been charging for the S5210 at all.
I actually asked his practice manager why this was so.
The answer came back that the question had been asked of an insurance company before and the answer was no.
The problem was that whilst the insurance company concerned did not (and still don’t) allow a charge, other insurance companies DID allow a separate charge.
But nobody had asked the other companies.
Instead, it was assumed the decision covered ALL insurance companies.
Thus on numerous occasions, insurance companies are wrongly blamed for their actions.
It was only by speaking with the individual insurance companies that I identified which ones would accept the charge and which ones would NOT accept the charge.
Insurance companies are NOT the enemy.
If you call them, you may be surprised at what you are told.
That is not to say you will always obtain a positive response but you may be pleasantly surprised.
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A question, which was asked recently at a private practice seminar MHM were presenting at.
Interestingly the question was asked by a consultant surgeon who had started his/her private practice two years earlier.
He was of the opinion that such excess was the responsibility of the patient’s insurance company who would collect excess or shortfall amounts from the patient on his behalf.
Sadly this is absolutely NOT the case at all.
The responsibility for the collection of such items rests very squarely on the consultant himself.
Consider excess and the cause of excess?
When the patient obtains private medical insurance there will be an amount – excess – agreed on the policy.
The exact amount of the excess will depend on how much the patient pays for his/her policy.
Generally speaking the higher the premium, the lower the excess.
It’s just like car insurance, if you agree to a £500 excess, the premium will be lower than if you only agree £100. That’s fine – until you come to make a claim on your insurance.
Private medical insurance carries the same principles.
So, when the patient comes to see you and you claim the cost of your services off their insurance company there could well be excess for which the patient is liable.
The consultant is responsible for the collection.
Not the patient’s insurance company.
The consultant who asked the question called a few days later because of this horror.
He had in excess of £5,000 worth of uncollected excess in the previous two years unpaid and due to him which nobody was collecting.
The supplementary issue, however, is why were the excess amounts allowed to build up over two years without anybody noticing?
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There are only 24 hours in a single day.
Yet many times, you hear the comment “there aren’t enough hours in the day”
But that raises the question “what are you actually doing in those hours? More specifically in the on average 8 hours, you are physically at work?
Recently I wrote how I work in hour-long segments: 45 minutes actual work then a 15-minute break.
But how do I decide what actually goes into those 45 minutes?
The items that go into the time slots are the ones that generate maximum financial benefit for me.
Otherwise, what is the point of completing the task?
So, I simply list all the tasks I have to complete that day and then I start with the one that generates the best financial reward.
It actually doesn’t matter what the task is. What matters is that it is the task that gives me the maximum financial reward.
For example: writing this blog won’t generate the maximum return. Invoicing a clinic list from last evening for one of my clients’ will.
In the case of a consultant surgeon, writing a blog won’t generate any income either.
Neither will the drive between hospitals.
Seeing a patient at consultation will.
Taking a patient to theatre will too.
As a consultant surgeon, you will only get paid for actually seeing a patient.
Having a coffee or surfing the internet, won’t generate any income for me.
Speaking to an insurance company and ensuring we have the right fee will.
Watching a Youtube clip won’t.
Chasing unpaid excess from a patient will.
And thus my day continues until ALL the tasks are completed.
Note, however, they are the tasks that generate the maximum income and financial benefit for me for that is why I am in business.
Consider, alternatively, why is the consultant has a private practice?
It’s to generate an additional income by providing private medical care.
In which case why are some consultants doing ANYTHING other than seeing a patient at a consultation or performing a surgical episode?
Those tasks are the ONLY tasks they get paid the maximum for.
If they are doing other things – and some of the other things may be important – they may not potentially be making the maximum they can.
The “other” things need to be done of course.
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It’s amazing the number of times I see this.
So the best way to guarantee you won’t get paid is?
Not to raise an invoice.
Let me give you an example..
An MHM client held one of his twice-weekly outpatient clinics recently. Nine patients; so there should be NINE invoices.
Except there are only EIGHT?
A quick look at the list indicates one of the patients is designated as inclusive care; no invoice required. But hang on a second, an invoice was raised for a surgical episode recently for this very patient and sent to an insurance company for payment.
Indeed it’s been passed for the payment already.
How can the follow up be deemed inclusive care if the surgical episode was chargeable to an insurance company? Generally speaking, it can’t.
Simple explanation. The patient had been incorrectly designated as inclusive care for this clinic. Once the error is corrected, there are NINE invoices. Happy days. After all its only one episode
Make that mistake only once a week for a single month and you potentially lose over £500.
And that is why MHM checks the clinic list is right each time and every time.
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For a number of years now, MHM has argued paper invoices should be avoided.
We have instead taken advantage of the offer from medical insurance companies. We submit invoices for medical services electronically.
It has saved a fortune in postage costs.
They are produced much quicker and cheaper than in paper form.
The amazing thing is that some private medical insurance companies still allow paper invoices to be sent to them.
Self-funders are different.
I’m still not convinced sending an invoice by email is the right thing to do. I would love to be proved wrong though.
Having said that, there is no reason – providing you have called the patient first – for an invoice for excess and shortfall cant be emailed. We do.
MHM supports those insurance companies who insist as part of them granting recognition that invoices to them are electronic only.
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A good understanding of medical coding is vital.
Without it, 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 what Multiple arthroscopic operations 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 code 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, recognize the majority of codes.
However, a word of caution.
Whilst the example above of W8500 will be recognized, 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-authorization 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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This issue has come up a few times over the years.
Consider if, during the initial consultation, you advise your patient surgery is required.
The patient is therefore given a CCSD code equating to the surgical episode to quote to his or her insurance company. He goes away, quotes the CCSD code to his insurance company and is given a pre-authorization code for, as an example, AB1234 by his insurance company.
The patient then contacts your secretary and passes over the pre-auth number.
Everybody is happy.
But what happens if, during surgery, you realize a change of surgical procedure is necessary?
Does it make a difference?
Not to the patient.
It also doesn’t make a difference to you either for you have performed the surgical procedure you deemed to be the absolutely correct procedure at the time.
The point at which it does make a difference, however, is the fee the amended surgical procedure attracts. For example:
The original code of AB1234 may, for example, generate a fee of £452.
But if during surgery, a different procedure was necessary a different code will be applicable.
For example XX4268 instead of the original procedure code of AB1234. XX4268 generates a fee of £619.00 whereas AB1234 generates £452.
So the question: which code do you charge for?
The XX2468 obviously.
There is a step to be taken before the invoice is raised.
The best practice is to call the insurance company and explain the situation.
All insurance companies are very used to such calls from MHM. Some request a letter from the consultant surgeon explaining why the change was necessary.
Some do not.
And thus MHM invoices the correct fee and you get paid the right fee.
What happens if you do NOT make the call to the insurance company and just invoice for a different CCSD code to that authorized?
Having never ever done that I wasn’t sure. So I called two of the major private medical insurance companies.
Both said the same.
At best the invoice will be seriously delayed pending their request for an explanation. In the worse case, the invoice will be declined.
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One of the most common remarks I hear from my guys is the number of patients they see in the NHS. They literally have patients queuing up to see them. Such a comment is normally followed by the opposite when discussing a private practice.
This, for me, confirms the absolute difference between the public and private sectors.
In the NHS, a consultant surgeon does not have to do much in order for patients to be delivered to them.
In the private sector, the opposite applies.
In the private sector a consultant surgeon, because fundamentally a private practice is a business, MUST attract a patient. He must engage in pro-active marketing.
He must ensure it is known his practice is there. First of all, however, he must comprehensively understand WHY a patient is choosing to go private. It is not merely the case of a patient wanting to be seen private because he or she has private medical insurance.
It is understanding WHY the patient has private medical insurance. I, for one, dispute it is because private care is better than NHS care.
More likely it is because the private patient wishes to be seen quicker.
Even so, a consultant surgeon MUST engage in marketing.
If the patient can be seen at the private practice quicker than at an NHS location but the patient is unaware the private practice exists then all bets are off.
Therefore a marketing plan of some description is an integral part of a private consultant surgeon’s business plan.
And therein lies the reference to the first and absolute cultural difference between an NHS practice and a private practice.
In an NHS practice, patients will be delivered to the consultant surgeon without him even asking.
In private practice, patients will not just be delivered. They have to be attracted to the practice or more accurately to the business.
Note the use of the word BUSINESS for a private practice is a business.
This is not the time to discuss which marketing strategies will and do work best for a private consultant surgeon. This blog is more concerned with highlighting that due to the differences between the NHS and the private sector, a private consultant surgeon has no choice but to have a marketing strategy.
Just as a consultant must have a robust infrastructure to support the business (secretarial support, invoicing, banking, etc), it is equally as important to have a marketing strategy.
Look at it this way, if any business does not have a regular number of customers or clients (in the case of a medical practice PATIENTS) then inevitably the business will not succeed.
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All MHM clients are very dedicated individuals.
Having spent approximately 15 years of training and finally becoming medical professionals, they go on to work incredibly long hours.
They do so because they actually love what they do.
All at some point all have taken the decision to start a private practice.
It’s unlikely they would be my clients otherwise if you think about it.
They start a private practice because they wish to make more money doing what they love anyway.
To have any other objective is either (a) silly or (b) engaging in self-delusion.
There is no shame in admitting you start a private practice to make money.
As I’ve blogged many times previously a private practice must be run as a business – a business with more than a social conscience but nonetheless still a business.
Yet, sadly, many consultant surgeons make the mistake of believing their practice will grow and make them rich if they continue doing what they love to do.
Sadly that is not true for doing what you love seldom leads to long-term financial success.
And that means you must measure the performance of your practice.
This is the point at which the private consultant surgeon realises he/she must understand financial analysis i.e. the numbers.
It’s not all that complicated. Supplying data to your accountant every year isn’t the same as understanding the numbers behind your practice though.
Let me give you a real example.
I was contacted recently by an established medical professional. He claimed to be working all the hours God sends but said he was always broke.
It didn’t take long to work out why.
The first good indicator was a complete lack of financial analysis other than a tax report a little over one-year-old. No debtors ledger was available.
He didn’t have any real idea how much he was owed.
Indeed it transpired both patients and insurance companies were only invoiced monthly.
So I took the last six months’ worth of clinic lists and checked how many had or had not been invoiced.
Quite a lot had not.
I did the same with surgical episodes with the same result. This was followed by an investigation into how much had not been paid even if invoiced.
But it was also a case of adding up the total revenue generated for each month, calculating the total costs (room rental, monthly indemnity insurance premiums, secretarial costs, etc). Then one was subtracted from the other.
Even if any type of provision was made for tax liability was ignored the results were not encouraging.
The really bad news is that the consultant looked very blank when I asked which percentage of patients were referred to him from which source.
It was clear this particular consultant had no real idea of how his practice or business was performing.
And that was and still is a very dangerous place for any business to be.
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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 around 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.
“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 a week ago (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”
I agree with him; partially anyway.
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 the 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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In response to this morning’s blog about “gap” invoices being increasingly used to mitigate fee reduction(s) imposed on consultant surgeons, many emailed me and disagreed.
It is of no surprise the vast majority who disagreed work for insurance companies.
Some were quite vocal in the dislike of “gap” invoices.
They were of the opinion cost extraction was the ONLY way to reduce the cost of premiums.
That alone would make private health insurance more attractive.
Faced with a smaller number of potential or existing policyholders, insurance companies have sought to make the offering more attractive by making it cheaper.
But is cost extraction really the only way to make private medical insurance more attractive?
The implication of such a view, confirms the belief that price is the single factor when a patient takes out insurance.
GAP invoices, being diametrically opposed to that aim, should be resisted.
However, are patients really that fixated by cost?
Or are there other factors they consider?
Some patients are happy to pay Gap invoices. That suggests the cost is not the only factor.
Some are completely unaware of the fee reductions being imposed on their consultants.
So are they really that concerned with the cost?
To a certain extent of course they are.
All patients looking for a package with a private hospital, for example, will be price-conscious.
However, that may not be the overriding factor.
Whilst they will certainly be looking for a value for money, it is more likely the perceived value of the package is more of a driver than just the cost.
Deeply involved in the perceived value is the reason the patient wants to be seen privately in the first place.
The prime reason a patient takes out private insurance is that they wish to be seen as quickly as possible, as conveniently as possible and by the consultant they want.
Yet insurance companies seem almost fixated with taking cost out of the private insurance market.
Seldom do they seem to be interested in what else the patient is seeking?
Seldom do they emphasize that a patient with medical insurance can be seen quicker and more conveniently.
Private health care is deemed to be expensive.
Whether it is or not is actually secondary.
What is more relevant is the perception it is.
So the insurance companies react by trying to take cost out. They begin a race to the lowest fee or to the bottom if you will. In doing so they sometimes shifting the emphasis away what the patient really wants.
To be seen not only at a reasonable cost but as quickly and conveniently as possible.
Keep reducing fees and sooner or later the fees will be so low the private consultant can no longer make a reasonable return.
Add in the fact there are fewer people who have private medical insurance now than at any time since the early 90s – and consistently reducing costs in search of a smaller pool of potential patients creates almost a perfect storm.
All of my clients have substantial NHS obligations which, incidentally, they perform to exactly the same skill level as their private work.
They are hard-wired to perform both in the best possible way.
So why does an NHS patient ask an MHM client if the consultant can see them privately?
By no means does that suggest a patient will pay any price to see their consultant of choice.
They want to see their consultant of choice and the most convenient time for themselves.
They do not, for whatsoever reason, want to wait
So why is it that insurance companies concentrate so much on taking cost out of the private healthcare offering, whilst almost failing to point out that private medical insurance offers rapid convenient access to a high level of facilities and a choice of whom the patient may see.
Doesn’t the existence and acceptance of GAP invoices, actually suggest that patients are prepared to pay more and not less to see a consultant as soon as they possibly can and where they wish?
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Top up (or GAP) invoices – asking the patient to agree to pay the difference between a consultant’s fee and the fee an insurance company is prepared to pay.
The discussion concerning them seems to take place more in whispers than anything else.
And sometimes they are even deemed to be almost a taboo subject because they don’t exist.
But they do.
So, and for the record:
I have no problem issuing them on behalf of my clients. Why and when?
Consider the case of a real consultant surgeon whose patient is quite happy to pay, for example, £852 for a surgical episode.
But the patient is insured with XYZ Insurance.
XYZ will only pay a “customary and reasonable fee” of £639. The fee was £852 but due to “market conditions” XYZ has reduced it by 25%.
Thus the consultant may now as part of his recognition protocol only charge £639
Most consultants actually perform the same procedure throughout the month.
Empirical evidence using MHM clients confirms they all perform, in their own specialism obviously, the same code(s) on average 5 times a month.
If that code happens to be the one reduced by £213 each time, the reduction in revenue is over £1,000 each month.
In the original scenario though, the patient has chosen to see that particular consultant.
His/her decision has zero to do with fees.
That is the consultant the patient has chosen.
If the patient is advised the fee for their procedure is £852 but their insurance company will only pay £639 towards it and then if they – the patient – is asked beforehand to pay the difference and agrees, where is the problem?
Ah no, say the insurance company, you can’t do that for that is above our customary and reasonable fees and anyway, you are risking your recognition with us.
This article is not about if they are right to potentially withdraw recognition if fees are not adhered to.
Neither is it about whether XYZ Insurance is right to reduce the fee.
The first thing consultants will all do is be deeply unhappy about the reduction.
The second thing they will do is attempt to mitigate the loss somehow or another.
And the second point is the more relevant one.
Many times I hear from insurance companies the market is contracting and cost has to be taken out to make the private medical insurance offering more attractive.
No argument from me on that BUT why is the cost reduction, or so it appears, being continually directed at the consultants?
Yes, I am aware that certain fees have gone up but overall fees have come down.
I’m equally opposed to those consultants who insist on ignoring insurance companies’ fee structures for every single procedure and/or episode.
I’m also very focused on taking costs out of any business so I can see where the insurance companies are coming from.
But not at the expense of continually reducing a consultant’s fee and thereby reducing his profit continually AND the patient’s right to a choice.
Top Up or Gap invoices are a reaction to consultants continually seeing their fees being eroded.
I haven’t said I completely agree with them for they should be unnecessary.
What I am saying is that I understand why I’m being asked to produce them and when.
Consider an actual quote to me recently from a very well established consultant surgeon.
An orthopod who has been in private practice for over 10 years:
That, perhaps, sums up precisely why some MHM clients are asking me to produce Top Up or GAP invoices.
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Re-reading Matthew Syed’s latest work reminded me of something when I look at the business performance of private medical practice.
One definition could be the ability to look at a situation and almost have a sixth sense of the cause.
For example just this week I looked at a pile of rejected invoices and knew immediately why they had been rejected.
I didn’t have to ask why.
The specific insurance company they were destined for always uses numeric reference numbers.
Those rejected contained letters. But that insurance company always proceeded their reference numbers with letters.
Nope. Experience had taught me that.
I’m told by one of my clients the technical expression for it is “expert induced amnesia”
The knowledge over time has moved from the conscious part of my brain, the explicit, to the implicit part of my brain.
And that got me thinking about what I look for when considering if and how a practice can improve.
The “what” is always the same. For example:
That is not the same as asking what the number is.
I’m not really interested in what the actual number is.
Instead, I’m interested in knowing if the business KNOWS!
If the answer is “don’t know” that tells me there is a lack of management controls. That sets the direction and scope of the assignment.
However, if the answer is yes but the number is at the end of the last financial year that tells me something else.
Very occasionally I hear “yes; its £x,000 as at the end of last month”
If there is no regular and timely basic management information being produced, the likelihood of significant process errors being made increases too.
And that is precisely what I found when I took on my most recent client.
No timely, accurate management information was being produced.
This was because the process of invoice generation and cash receipt allocation was not being completed.
That immediately led to another question: why not?
Yet paradoxically, the concept of “meaningful patterns” can be said to fly in the very face of my training and subsequent application of scientific management.
I’m looking for patterns that will point me in the areas of possible improvements.
Actually, it doesn’t fly in the face of my training and application of scientific management at all. And it doesn’t really matter if it does.
What matters is that areas for improvement are discovered. And then acted upon?
What is really interesting is the reaction from a practice principal when an error is found.
To me its an opportunity to put it right and ensure the error is prevented from happening again.
Sadly, however, some reactions don’t exactly proceed that way.
Significantly though, those that follow the path of “opportunity to improve” do see an increase in their cash flow.
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I’ve said it repeatedly and it’s true. It is much, much better to send invoices electronically.
It’s easier, more accurate and quicker. Further still, most insurance companies demand you invoice electronically.
So why a blog article, suggesting sometimes you MUST raise a paper invoice instead?
I spend many hours ensuring a new client’s invoices are sent electronically because for most consultants insured patients remain the major source of income.
Self-funding patients require a paper invoice though.
In fairness, practically all medical practice software packages do have the option to raise paper invoices.
That said a surprisingly large number of consultants try to invoice self-funding patients electronically i.e. by emailing the patient.
I’ve tried this many times and on the majority of occasions have to call the patient regarding the unpaid invoice only to be told the invoice never arrived.
Most likely this is because junk mail checkers do their job and decree my email to be junk.
Therefore I have to post a copy of the invoice anyway.
In the case of self-funding patients do not try to send an electronic invoice to them.
How many of you have tried to email invoices to patients and found it problematic though?
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