As physicians, most of your time is allocated to your patients and to patient care. Little, if any time is allocated to the business of medicine. However, the business of medicine will be the beginning point of your key to a successful year in 2015. You can best begin by understanding how the practice fared in 2014 and looking at the business strengths and challenges you faced last year.
Start by reviewing your financial data for 2014. How much income did the practice generate, and how much was actually collected? Review your collection policy to see if policies are reasonable in today's business environment, and confirm the policies are being enforced.
Co-pays and deductibles can be collected at the time of the patient's visit, and doing so can save the time and expense to send a bill and the work to collect the amounts by mail. In the past few months, there has been a surge of new health plans established, and many provide both a primary and secondary payment plan for all eligible employees. This requires a change to handling patient payments.
First, understanding the amount of the Co-pays and deductibles. This is accomplished by acquiring patient data (two cards instead of one), collecting the amounts at time of the patient visit, filing a primary claim--collecting it and then filing a secondary claim for the balance of the payment due. It will be more important than ever before to verify all insurance coverage at each visit, as the Affordable Care Acts allows grace periods which could improperly report available coverage.
If you can't collect a valid amount due from your patient determine if your collection protocol is active and efficient. Be certain that a collection agency provides routine reporting of accounts it is collecting on your behalf and the status of each account.
Take a look at expected 2015 revenue. Review information from insurance companies and government programs to understand changes that may affect revenue. Review your fee schedule at least annually, and when major payers publish new schedules.
Review your 2014 expenses--use the financial statement to budget your 2015 anticipated expenses. It is important for cash flow purposes that you know what expenses to expect or equipment that must be purchased during the year. Meet with your practice administrator to put together the budget. Verify major expense categories, such as salary, retirement plan, supplies and insurance. Take a look at expenses that are expected to rise-- for example, many rental agreements have annual increases built into the lease.
Confirm your banking arrangements and available line of credit. With health care changes such as payer payment slowdowns or ICD-10 looming in 2015, you need to have cash available if funds slow down. The plan needs to include a payment strategy and compensation arrangement to complement the anticipated practice income.
Review your staffing to confirm that you have the proper number of full time equivalent employees. Every practice is different. But having the right number of employees is crucial to proper practice profitability. Review your practice employee handbook to confirm it is current and up-to-date.
Other important topics to consider going into 2015 are the Medicare Incentive Programs. For 2015 The Centers for Medicare and Medicaid Services (CMS) has added 28 new individual measures and removed 73 measures, so that in 2015 there will be a total of 240 measures in its Physician Quality Reporting System (PQRS). Meaningful Use for eligible professionals will provide incentive payments if certain requirements to meet and attest are met. Both PQRS and Meaningful Use provide incentives if met and payment reductions if not met. Visit the CMS website at www.cms.gov for the details.
Blue Cross Blue Shield of Alabama Value-Based Payment program allows an opportunity to earn additional amounts for "value-based payment reimbursement codes" found on the BCBS of Alabama website. The three areas of qualification are 1) Cost Efficiency--a risk adjusted score based on acuity and cost efficiency; 2) Patient Focus--including patient satisfaction scores, and participation in NCQA Patient Centered Medical Home or NCQA Diabetes Recognition Programs, and 3) Clinical Effectiveness. More information on this program is available at www.bcbsal.org.
The business of medicine constantly changes. Keeping up with patients has transformed with electronic health records. Moving patient information through the "system' requires information to provide the best patient care, while obtaining information and demographics for proper payment. Both are important for a successful practice in 2015.
Gerard J. Kassouf, CPA/PFS, CFP© is a director in the Birmingham, Alabama Accounting and Business Consulting firm of L. Paul Kassouf & Co., P. C. He can be reached at gkassouf@kassouf.com