One of the most fatal ways to restrict the growth and profitability of a private medical practice or indeed any business is a failure to communicate.
Over the years I’ve enjoyed excellent relationships with clients – my original client, for example, is STILL a client. His practice has grown and it is still growing. Another client saw around 6 patients a month when we started working together in 2012; now he sees around 50. In both cases, MHM is used as the mailing address for correspondence from insurance companies and from patients. Most of the time a client doesn’t need to see them anyway. They just need to know any issues – shortfalls or excess for example – have been sorted and they either have been or are being paid.
Other clients though have not shown such growth. Indeed I have struggled to get their invoices paid quickly, shortfalls and excess under control and self-funders are problematic also.
This is down to one reason and one reason alone.
Clearly, in the first example, the benefits of a clean and robust working process are beneficial. Included in such process is the weekly client’s report I send out.
For example, I have one client who is always complaining his cash flow comes in peaks and troughs. It will do if I only get the clinic lists intermittently and I only receive notifications of payments from him intermittently also. Other important pieces of correspondence are also only sent to me on an ad-hoc basis. The reason cited for this is that the client simply does not have the time to communicate. I have to say 99% of the time I agree. He should be busy seeing patients or in theatre rather than talking to me.
In the nicest possible way, I’m actually not bothered if a client talks to me or not. In other words, this is not a personal gripe from me regarding a failure to communicate; far from it. I’ll react to the information supplied to me usually the same day it arrives.
But if the information doesn’t arrive, I have nothing to react to.
It is more important the information is received by the client and failure to communicate by passing it on to me that which is the real issue.
Reverting to the first client, he uses the MHM address for all accounts and billing correspondence. He also uses the MHM email address for his electronic remittances. All the information comes straight to me. Taking one month this year, his total billing for that particular month was £18,500. At this precise point – Nov 4th – he is still owed £150 (1%)
99% of his invoices have been paid or if subject to excess/shortfalls, they have been collected.
Turning to the second client, his total billing for the month was just over £4,250. All the information from insurance companies etc goes to him. At this precise point he is still owed £822 (22%). Only 78% of his invoices have been paid.
And that is why communication is everything in business and the domino effect should and can be avoided.
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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 their business. But it could just have easily been written about a consultant surgeon starting a private medical practice.
The article illustrated how many, many small business owners attempted to start their business on their own and without assistance from outside sources. It was therefore common subsequently for the business to struggle with, for example, a lack of customers, a lack of cash and a subsequent disillusionment with the very idea of running a business. This is very normal for a consultant surgeon starting a private practice too. It is by any means an easy to do so. There is a huge amount to be considered. The basic rule is that if it can go wrong it will go wrong.
It actually happened to me too when I formed MHM. Despite the odd 35 years worth of managerial experience in running a business for various employers, I was used to, for example, ringing IT and having them install a new computer or re-sync mobile phone settings. As a small business ALL of that had to be done by myself. I soon realised that , even though it cost money, it was much better to go out and find someone who DID know how to install an IT system.
The first item in the article stated the number one challenge facing a new small business is a lack of clients. Precisely the same situation that a newly established private medical practice faces too. The second item was a lack of cash. Certainly, when I go meet a prospective client both are mentioned. More specifically as regards the second point, the amount of cash actually generated by the small number of patients is not anywhere near what was expected.
Yet I re-collect 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 to encourage new patient referrals. Their lack of new patients could be helped by using testimonials from current patients in other words. The new practice does not have the right marketing strategies (both online and offline) to attract patients consistently.
Instead, marketing is left to drift unattended. My colleague is a real superstar at medical practice marketing yet she suffers from consultants believing she is far too expensive to engage.
Alternatively, the new private consultant surgeon has a conversation with a colleague who does has an established practise. Hopefully, this pays dividends but it does suppose the established surgeon is maximising his marketing efforts in the first place.
Precisely the same happens when the subject turns to medical invoicing and payment of outstanding accounts. 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 is that many consultant surgeons when they first start a private practice make the same mistake as I did with my IT requirements when I started – a vain attempt to sort it out myself followed by frantic phone calls to experts. After 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, 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 and collections to an expert standard, make precisely the same mistake.
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I always check what is happening with shortfalls and excess for they are a major area of risk to a private medical consultant. Using a single private consultant surgeon as an example:
Taking a single consultant and looking at her work for a single week – out of 15 consultations 4 came back with excess / shortfall deductions totalling £575. So for a total of £2,500 worth of outpatient consultations £575 or 23% came back short. Looking back to the same week in 2016, the number of shortfalls / excess were 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.
I do. Once I have the patient on the phone I take payment via a debit or credit card.
Sure you can write letters and even email but nothing gets a response like a ringing telephone. Most patients are unaware of the issue (yes I know when they open their policy they are made aware of excess values) but some think this is an issue between them and their insurance company. In other words, the patient thinks they need to pay the insurance company because the consultant gets paid in full by the insurance company.
There are variations on this but the crucial point for the consultant is not to establish why. 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.
Thats still £13,800 per annum.
What’s significant is that when speaking to a group of private consultant surgeons I asked what they considered the biggest threat to their practice(s). Most popular is the anticipated further reduction in fees paid by private medical insurance companies. There is little if anything that can be done about that.
The second concern, however, is the number of shortfalls and excess.
It’s becoming a big challenge. 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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Sometimes it can be confusing why an invoice is declined for payment.
The patient arrived for her consultation. She brought her pre-authorisation number too.
An invoice for her consultation and the investigatory procedure was raised.
We were expecting a £200 fee for the consultation and a £75 for the procedure.
Instead, payment was made for the procedure only. Thus the phone call to the insurance company.
The invoice was NOT declined because the insurance company had decreed a consultation fee could no longer be charged at the same time as the procedure.
Nor was it as stated on the remittance that the episode was within 6 months of the previous treatment date.
It was because the patient’s policy did not cover consultations.
There are a number of policies out there like this. Other than asking the patient, they cannot be identified until payment is made.
In any event, the £200 consultation fee was the patient’s liability.
What was more relevant is that the issue was identified and actioned.
Shortfalls/excess can easily build up. Then they are a problem.
When MHM are contacted and asked to report on the performance of a practice, shortfalls/excess are consistently in the top three problems.
Thus MHM was, having checked it all out and sent the invoice to the patient, delighted to be told a few days later the client had received the £200 by BACS into her bank account.
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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 sector.
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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Many times I come across a consultant who is having problems getting paid by self-funding patients.
This is often followed by a reference to numerous reminders and sometimes even final demands being sent in vain to the patient. Despite all this, no payment has been received and the invoice remains outstanding. I’ve always found this curious as I have very few problems with self-funding patients.
Firstly, I make sure the invoice that is sent out is absolutely correct. The address is verified with the post office (the address and the postcode is checked against the Post Office “Postcode finder”). It’s free and saves me worrying if the details are correct.
Secondly, if the invoice is unpaid after a set length of time I telephone the patient.
Thirdly and finally, I take debit or credit card payments.
None of the above are exactly rocket science but if you strip down each stage you remove many of the reasons for a self-funding patient not to pay.
If you take each, in turn, starting with validation of the address, this removes the potential for the invoice to be returned undelivered.
For example: how confident are you the address quoted is 100% complete and accurate.
There are many occasions when an address has been shorted or a digit incorrect used in a postcode. It takes all of 30 seconds to check everything is as it should be.
If it is NOT, then the opportunity to get it right presents itself. If you send an invoice out incorrectly addressed, and believe you me I’ve seen.
Permit me to give you an example of something that was actually mailed to me and never delivered recently because the postcode was wrong.
It was a digit out.
That doesn’t seem to be much of a mistake but it was enough to cause a failed delivery.
The first I knew about it was when I called the sender to ask where the expected correspondence was.
How many self-funders are going to call and ask where the bill is?
Some might but good luck expecting that to help reduce the number of outstanding invoices for self-funding patients.
By actually speaking to the patient two things are pretty much going to happen. You are either going to get paid or you are going to find out why the invoice hasn’t been paid.
For example, the patient will either agree to pay there and then or, as in the latter case, explain they are insured, thought the payment would be taken from the debit card swiped upon registration or some other reason.
It doesn’t really matter what the reason is. What matters is that I’ve been able to identify a problem.
And then sort it.
Sorting it brings us neatly to the third reason my clients don’t suffer from excessive issues with self-funding patients. I take debit and credit card payments for them.
There is a telephone number on the invoices I send out to use if the patient wants to make a card payment.
Or in the event, I have to speak to a patient I always ask for a card payment. 99.9% of the population have debit and/or credit cards.
Thus the patient is encouraged to clear my client’s account whilst on the phone.
Of course, there may be issues such as the patient genuinely believes the hospital have taken payment or the patient wants to check something.
Not a problem with any of that save it needs resolving within a maximum of 36 / 48 hours because my client hasn’t been paid.
None of the above is bullying or harassing the patient; quite the reverse in fact.
It confirms not only is the consultant a professional but he/she has an equally professional administrative function within the practice.
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MHM recently completed a project for a private hospital. The project was to investigate why various private medical insurance companies were not paying.
One insurance company was proving to be particular troublesome. An analysis of a complete month’s invoices soon identified why. This particular insurance company required all invoices to be submitted electronically. No problem with that.
Except the invoices were woefully inaccurate. For example, the patient’s date of birth or policy number or pre-authorisation was incorrect. Each and every time this caused the invoice to fail at the point of logging electronically with the insurance company. Thus the invoice was not actually passed to the insurance company for payment. Instead it was put in a “holding” pile.
To resolve the problem, it was imperative to make sure ALL the details were correct so invoices could be successfully processed and not placed in a “holding” pile. It was vital all the details were 100% correct. That was, or so it appeared to be, the root cause of the issue.
Why was this proving so troublesome?
It transpired medical secretaries were of the opinion the hospital receptionist were responsible for getting it right. The hospital receptionist said the medical secretaries were responsible. Then they both claimed the person who actually raised the invoice was responsible. The reality was that nobody was making sure the data was right and this was before the correct CCSD code was being identified and used.
The spat had caused, over the previous six months, the hospital to be short of money by many tens of thousands of pounds. Indeed the holding pile was not only greater than the value of an average daily outpatient appointments, it was STILL growing.
Skip forward a few months. The receptionist obtains the details and checks them. The medical secretary ensures all the details are recorded on patient records accurately and checks them again. The person responsible for medical invoicing highlights on a daily basis ANY invoices which can’t be processed. The holding pile is now less than 0.5% of a MONTH’S worth of invoices.
Is this overkill?
Cash in-put into the hospital from this ONE insurance company has increased by around 160%. It’s not overkill at all.
And the hospital has realised a little pre-emptive medicine has stopped a rubbish in = rubbish out issue.
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If you get the basics right many problems with getting paid aren’t allowed to happen. Accidents aren’t allowed to happen. The basics mean the absolute minimum and mandatory requirements in order to present an account for your services. The basics are as follows:
Patient’s full name
Patient’s full address
Patient’s date of birth
Policy number of the insurance company concerned
A pre-authorisation number issued by the insurance company
Correct CCSD code
But it doesn’t stop there.
Your name and address
Your provider number
A unique invoice number
The date of the invoice
The date of the treatment/consultation
The right CCSD code
But if you don’t get all 14 on your invoices you make it harder for the insurance company to pay you.
Where do you get the above data from?
If you are practicing from a private hospital almost certainly the above will be recorded on the hospital’s registration form. If you are operating from some other private consultation facility, make sure you do ensure the details are obtained.
If you are invoicing electronically, its pretty much standard that you MUST have the above data immediately to hand anyway. The same is also true if you are dealing with a self-funding patient or you endure having to collect a shortfall/excess amount from a patient.
In other words, the chances are you are going to need all 14 pieces of data. Therefore it makes more sense to get them right the first time.
If anybody wants a blank invoice that does satisfy ALL the above, go to the freebies tab on this website!
But the proof of the pudding is very much in the eating. Have a guess at what are the TWO major reasons an insurance company does NOT pay your invoice?
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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 advices.
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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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 cost 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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Reading Matthew Syed’s latest work reminded me of something I’m conscious of when I look at the business performance of the private medical practice.
One definition could be the ability to look at a situation and almost have a sixth sense of the cause of the problem. 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 ONLY.
Those rejected contained letters. But the international division of that insurance company always proceeded their reference numbers with letters.
Nope. Experience had taught me to spot that.
I’m told by one of my clients the technical expression for having such an almost sixth sense about something is called “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 how and 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. It is “do you know how much?”
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 which 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 which 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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It wasn’t so long ago I went on record as saying sending a self funding patient an invoice by email was a waste of time.
I still stand by that.
Empirical evidence from January 2015 to April 2015 confirmed it was much better to send a paper invoice to a self-funding patient. Invoices sent to a self funder by email (a form of EDI) are not as good as a paper invoice.
Not as good? In simple English – they do not get paid!
Earlier this week I received an email informing me many of the medical practice accounting packages out there contain an option to produce an EDI invoice for self funding patients.
If this is so why did I insist emailing (a version of EDI after all ) wasn’t the thing to do? I must therefore be mistaken otherwise why do the companies who write the software for a private medical practice bother with EDI invoicing?
For the record, I agree the vast majority of EDI software packages do indeed have the option to produce paper invoices. They need to. But if you think about it, the software holds all the data relating to an invoice electronically. It either sends that data in its electronic form or it sends it to your printer which transcribes the data into text.
The software package can do it either way.
I’ve said it repeatedly. It is much, much better to send invoices electronically. It’s easier, more accurate and quicker. Only if they are being sent to insurance companies and the like though. Most insurance companies demand you invoice electronically already. It is only a matter of time before they all INSIST you send all invoices to them electronically.
Yet I remain firmly of the opinion, in the case of self funding patients you need to send a paper invoice.
Take the situation when I logged on to my email this morning.
Overnight, as happens most mornings, I’d received hundreds of emails offering everything from a genuine luxury watch at up to 90% off to a gentleman in Russia who emailed me confirming he was ready to pay me back the $1,000 loan I made to him if I sent him my bank account details. All these type of emails had been diverted to my junk mail folder.
My situation is not unlike the vast majority of people out there who have an email account. That’s why we have junk filters on our email systems.
And that is the problem when you email an invoice to a self-funding patient.
I tried many times between January 2015 and April 2015 to send an email invoice to patients. On the majority of occasions I’ve had to call the patient anyway regarding the unpaid invoice only to be told the emailed original had never arrived. Most likely this was due to their own junk mail checkers doing their job and deciding my email was junk. Therefore I had to post a copy of the invoice anyway.
The self funding EDI invoice had not been paid.
In the case of self-funding patients do not try to send an electronic invoice to them. Send them a paper invoice.
EDI invoicing is totally the way forward. Absolutely every single MHM client is invoiced electronically IF the invoice is destined for an insurance company.
If the invoice is for a self funding patient, in respect of a shortfall or is for an excess absolutely every single one of them is in paper form.
In other words, even when the medical practice accounting package can send EDI invoices you should make sure it can produce paper invoices as well. You WILL need them for self-funding patients.
I still say I’m right
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Get the details right!
I’m very much a “do it once and do it right” type of person.
As I write this I’m on hold to a particular insurance company and have been for thirteen minutes and 23 seconds. The reason I need to speak to the insurance company is that the policy number is missing from the patient’s registration form.
Written instead is “TBA” i.e. to be advised.
Where I have a BIG problem is thinking that when this patient arrived at my client’s clinic, the registration wasn’t done correctly.
If the patient didn’t have their policy details with them, then steps should have been taken there and then for the details to be obtained.
Either call the insurance company or pass a phone to the patient and have them speak with their insurance company.
In the worst case scenario, ask the patient immediately after the consultation to call with the insurance details.
I guess it was the latter case and the patient was asked to call back but has not.
WHY wasn’t the patient called and reminded?
Did the patient understand when they made the appointment how important it was that they bring their insurance details with them?
In reality, the medical secretary concerned DID make sure she called the patient. She got the details and entered them on the practice database.
Because the details still aren’t correct.
When I finally got through it was a very simple fix.
Policy number 3443956X was wrong
Policy number 3433956X was right
If you want to get paid quickly and efficiently you MUST remove any and all obstacles that prevent an insurance company from paying an invoice.
In this case £275 worth!
Don’t you like getting paid?
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He wrote the 9th Symphony.
One of the most acclaimed pieces of music in the world was written by a deaf man! How?
Actually, Beethoven wasn’t deaf when he wrote the 9th but he was profoundly hard of hearing.
Nonetheless, how on earth did he manage to write such a wonderful piece of music with such a condition?
Well, a popular myth is that he knew the sounds each instrument made in his head and could feel how they all sounded when put together.
He also had somebody to write down the musical score for him.
It is well to remember by the time he wrote the 9th Beethoven had been playing and writing music for over 40 years so his experience alone (with more than a little talent thrown in) equipped him well.
But he was smart enough to realise his limitations and have someone help him.
Yet many times when starting and running a business, it is assumed that talent, determination, and knowledge alone are enough.
Take running a medical practice for example. All consultant surgeons are, without a doubt, talented, determined enough to go through 20 odd years of training and extremely knowledgeable.
However, just as it would be fairly dangerous to ask Beethoven to remove your appendix, it would be equally unwise to ask a surgeon to write a symphony.
You need the right kind of training, experience, and knowledge to be a consultant surgeon. You need the right kind of training, determination, and experience to run a business too.
The training may not be as highly skilled and crucial as a surgeon but you still need it. If you haven’t got it, you go out and get someone with the right skill set.
Nonetheless, there are many people who think running a business or a medical practice is simple.
They think they don’t need to understand some things and, crucially, are not prepared to find someone with the right skills who do understand.
Sometimes a consultant surgeon thinks because of their talent, determination, and knowledge, they too know how to run a private practice. Some do; some don’t.
Please do not misunderstand me some clients in addition to being very successful surgeons are seriously switched on business people.
Consequently, many times I’ve been asked what makes an obviously highly skilled consultant surgeon so successful in their business endeavors.
Others aren’t quite so successful.
The really successful business ones are those smart enough to realise they don’t have the talent and knowledge to run their practice as a business.
Some of them are, however, more than capable of running a business.
Both however realise, and perhaps more importantly, that their knowledge, experience, and skills are best employed when seeing a patient. So they outsource the issue to someone who has the specific skill set to achieve high-level results.
Just the same as Ludwig Van did when he wrote the 9th Symphony.
Beethoven may have been able to overcome his hearing problem but he was also smart enough to get other people to write the numerous scripts out for the 100+ musicians needed to perform the 9th Symphony.
Very successful consultant surgeons go out and get help too!
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A CCSD codes is used by insurance companies to identify a medical procedure.
An Orthopaedic surgeon, for example, understands what a Multiple arthroscopic operation on the knee (including meniscectomy, chondroplasty, drilling or microfracture) is.
But it’s a lot to put on an invoice every time you produce one!
Put the CCSD code W8500 on the invoice instead. It will identify that specific procedure.
So where do you find a code?
A CCSD code is found on the CCSD website: www.ccsd.org.uk
The Clinical Coding and Schedule Development Group (CCSD) consists of representatives from the five major healthcare insurers – Aviva, AXA-PPP, BUPA, Vitality and Simply Health.
The group’s main purpose is to maintain a common standard of procedure codes. The codes reflect current medical practice and are published as the CCSD Schedule.
The various insurance companies will, therefore, recognize such codes.
Whilst the example W8500 above will be recognized, it does not come with a suggested fee.
The fee payable for each code is up to the individual insurance company concerned.
To find the correct fee for the code, the insurance company concerned should be contacted.
When an invoice is then sent to the insurance company for payment, the code should appear on the invoice. Both the code and the fee will match that expected by the insurance company.
If alternatively, you do NOT use CCSD codes payment will be substantially delayed if made at all!
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It never ceases to amaze me the number of occasions where a new client claims he has been having issues getting paid by an insurance company only for me to discover why within minutes.
Because the invoice was never raised.
Yet it really is incredibly easy to make sure invoices are raised as a matter of ritual.
Ritually – you make sure every single time you perform an outpatient clinic the details are passed on.
Invoices can then be raised and sent to either a private medical insurance company or 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) scanned over every day 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.
MHM check every single piece of data BEFORE an invoice is submitted to a private medical insurance company 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.
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?
The one piece of equipment which means the ritual is followed?
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An MHM client recently performed a certain surgical episode. The surgery was something he’d done many, many times before with invoices being sent and paid.
Pretty standard in other words.
One particular insurance company paid £300 for the procedure. Before sending the invoice I’d checked per normal this was the correct fee.
When the payment remittance arrived from the insurance company I was, therefore, most puzzled to see the fee had been reduced to £240.
It was not a shortfall. It was not excess. Therefore any shortfall could not be passed on the patient.
According to the remittance supplied by the insurance company, the fee of £240 was in line with the normal published fees.
Except according to the insurance company’s own website, it wasn’t.
So I called the insurance company and asked them to explain.
The reply was wonderful. The fee had obviously been reduced between the date I had invoiced and today.
I have a view on that argument and it is not a positive one.
However, as I pointed out, my client had performed the same surgical episode on different patients both before and AFTER this one. A fee of £300 had been paid in all cases.
Also, I have more than ONE client who, as it happens, perform the same procedure although in different parts of the UK and been paid £300 since the date of this episode as well.
Still not to be beaten, the insurance company suggested the specific consultant surgeon I was dealing with as regards this case had agreed, as part of his updated recognition process, to accept a lower fee i.e. £240. That came as complete news to me! It came as a shock to the Consultant Surgeon too!
So I called the insurance company back save this time I asked for my normal contact there.
After the normal pleasantries, I explained my predicament.
The phone went quiet for a while but then my contact came back on the line with the immortal “Oops – we got that one wrong”
It’s a good job I was paying attention.
I really did have to smile.
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