About This Series
Have you been pondering striking out on your own, making the leap from employed associate to practice owner? Or are you just starting out in practice, and wondering if it’s worth going even deeper into debt to start your own venture rather than getting “a job”?

Whatever your situation, Physicians Practice is here to help with our comprehensive six-part guide to starting a medical practice. In addition to the pre-opening day planning advice you may have seen in other such guides, we’ll delve deeper into the key milestones you’ll need to meet for success long after you cut the ribbon.

The months leading up to opening day are a great time to put in place the process platform upon which your practice will function for many fruitful years. Admittedly, plenty more protocol-setting will happen on the fly, after you’re up and running. “I felt like I was improvising in front of a packed house,” says internist and pediatrician Chrissie Ott of the first few days in her new practice. “It was a cold bath of ‘you don’t know what you’re doing.’”

But it turns out Ott did know what she was doing. After a mere two months had passed, this Portland, Ore., “micropractice” doc was so happy she felt a little guilty. All that attention she paid to simplifying processes — filling two notebooks with task lists — was more than worthwhile. “It’s a lie that [medical practice] has to be as complicated as we presume that it is,” she says. “I am one person, and I have set up a functional practice that is lovely — and it’s fun to practice!”

Consultant Keith Borglum breaks it down: “There are maybe 10 core issues that you have to get right. [Otherwise,] a lot of times the perfect answer is not available, so you have to make adjustments … Sometimes you have to wait for something to come up.”

First up, financials

Here’s a quick list of financial protocols to “get right”:

• If an electronic filing option is available, use it. To keep accounts receivable in check and cash flowing, file claims as quickly as possible, ideally within one day of an office visit. In fact, do everything you can online — check eligibility, benefits, and deductible balances, as well as obtain precertifications.
  
  
• Maintain a set of form letters that can be customized for the situation or payer to make appeals easier and quicker to file. Regularly check EDI (electronic data interchange) reports with your clearinghouse to identify and address any claim rejection triggers.
  
  
• Review EOBs at least a couple of times a week. Yes, this can feel like a thankless task, but it’s necessary in order to file appeals and go after any secondary insurance in the most expeditious manner possible. “It never stops surprising me that people will focus so much energy complaining about the horrible rates from the managed-care companies, but then never monitor their EOBs to make sure they’re actually being paid the promised rate,” notes Jerrie K. Weith, director of healthcare services for St. Louis consulting firm Anders Minkler & Diehl LLP.
  
  
• Accept electronic payments. “If you can get your payments to post automatically to your practice management system, all the better,” says Weith. Also, help patients pay you consistently with clear time-of-service and collections policies that you and your staff feel comfortable upholding. Fortunately, patients are becoming more accustomed to forking over cash while at the doctor’s office.
  
  You might consider accepting credit and debit cards to provide every possible avenue for patient payments. However, if ultra-low overhead is a priority for you, then you may not want to go that route. “I take cash and check copays only,” says Ott, “so I don’t have to deal with the additional complication and fees that the credit card companies take off the top.” Ott does offer patient payment plans (on a case-by-case basis), but she advises being careful not to overextend your resources.
  
  
• Closely track your performance. “Use a dashboard report or a key indicator report that tracks your results on days in A/R, net collections percentage, and aging,” recommends Weith. “There are dozens of different indicators you can track.” For example, some aging reports you’ll find illuminating show what’s been in your A/R less than 30 days, more than 90 days, and percentage of bad debt.
  
  Beyond the must-know stats above, follow up on “whatever is most important to your practice,” she says. “You may want to track the number of new patients per month or number of days your charges lag.” Ask yourself what barometers will represent success to you, and keep tabs on those areas from the beginning.

Pay attention to your payers

Payer contracts will directly affect your practice’s A/R for years to come, so they warrant extra-special attention. Any room for dickering — and there isn’t much for small practices — will depend on your market. Weith advises that you really need to figure out whether you can afford to drop a particular payer, as “it’s the only leverage you have in some situations,” she laments.

This can be particularly challenging in regions with high managed-care penetration, Weith points out. “Usually you have to actually tender your resignation before you can get the attention of the payer,” she says. “The payers think that everybody threatens to leave but nobody ever does. It’s kind of sad that it’s that adversarial.”

In other parts of the country — and with in-demand, often hospital-based, specialties — the picture isn’t nearly as bleak, so ask others about their experiences before making assumptions about how far you’ll get.