5 Keys to a Better Practice

Polite and friendly, pediatrician Carol Reynolds isn't your typical angry-at-the-system doctor. But get her talking about the challenge of dealing with insurance payers, and her congeniality turns to frustration.

"It's so burdensome and labor-intensive," says Reynolds, the medical director of Potomac Physicians, a multispecialty primary care group with 10 practices in the Baltimore area. "I don't know why insurers seemingly work so hard not to pay doctors. There is so much that has to be done and every payer seems to want it done in a different way."

She struggles with other practice management hurdles, too, from staffing to scheduling to finding room for all those paper charts that occupy every available inch of her office in Woodlawn, Md.
And Reynolds is hardly alone.

So common and pervasive, in fact, are certain challenges to running an efficient medical office that when Physicians Practice asked its readers to name their five biggest headaches, the response was overwhelming. And while opinions were not without variation - some of you cited certain clinical challenges, for instance, and one of you complained about lax security at the prison where you work - a clear consensus emerged.

Most respondents focused on a handful of complaints that seem to plague almost every practice, regardless of size, specialty, or location.

In no particular order, they are: staffing issues, scheduling problems, the headaches of dealing with payers, the challenge of reviewing new technology, and the overwhelming documentation required to get paid - and to cover one's posterior in an over-regulated and litigious world.

Why should anyone want to compile such a list of problems? The dual goals were to remind practices that they are not alone, and - more importantly - to offer some creative suggestions for clearing their biggest hurdles.

On the latter point, there is good news: there are ways to deal with every item on the list - perhaps not to eliminate any entirely, but to manage each one at least a little more easily.

Challenge: Staffing

The difficulty of finding, managing, and retaining good administrative staff was one of the most common challenges identified by physicians.

Daniel Laury, a solo OB/GYN in Medfield, Ore., says employees today are not properly motivated.

"Basically, there's a work-ethic issue," complains Laury. "I know every generation says this, but ... the drive to do well just isn't there anymore. And that's what other doctors tell me, as well."

The complaint by middle-aged and older physicians that younger colleagues and staff don't want to work very hard is a common one. And indeed there are generational differences when it comes to attitudes toward work, says practice management expert Elizabeth Woodcock, MBA, FACMPE, CPC.

But what prior generations may perceive as laziness is for many younger people just a different set of priorities, she says. Younger doctors and staff tend to work to live, not the other way around; they work as hard building satisfying personal lives as previous generations did building their careers.

Between clinical and nonclinical staff, this gap can seem wider, because administrative jobs in medical practices can be tedious and low-paying. In other words, to many of your staff it's just a job.

But in a way that's good news, because while there isn't much you can do about someone's poor work ethic (short of firing him), you can strive to make your workplace more fun and interesting. And you can challenge your employees in ways that will keep them engaged, while benefiting them and your practice in the long run.

Reynolds says she sympathizes with her administrative staff.
"The jobs have a certain degree of monotony associated with them," she says, "but they are absolutely critical functions. We have to make sure that we all do what we can in terms of engaging the group. Make sure you give them the appropriate training, answer all their questions, and try to find ways to inject in their day some other things that kind of generate a little more interest and keep them going."

For instance, charge-posting has to be done perfectly, Reynolds says, yet the process of typing numbers into a computer all day is tedious, and therefore prone to error. How to resolve that?

Potomac Physicians involves its charge-posters in its claims appeals process, "so they have a fuller picture of the whole situation," says Reynolds. "It gives them a sense that they're really bringing something to the practice."

By cross-training its front-desk staff to perform in other areas of the practice, it adds variety to staff members' days, builds their professional credentials, and gives the practice some flexibility. The results have been solid, says Reynolds.

"Statistics I've read suggest that practices have an annual turnover rate of 20 percent to 25 percent at most front desks or medical record operations," she says. "We've been lucky; at our practice, turnover is around 12 percent, and we're really happy with that. Again, our efforts are to try to make the job a little more interesting. We train all of our front-desk people at all of our offices to have the ability to make appointments, register people as they come in, manage the medical records area, get the physicians' claims into our business office - they all have the ability to do that. They all have primary functions in one area or the other, but if they want to, they can move around - or if we have an urgent issue, we ask them."

From time to time, you can also try to make the workplace more fun by having inexpensive office events, like summertime ice cream socials. Involve patients, too.

Of course, the principles of basic employee management always apply. "Don't tolerate employees who are not pulling their workload or being a team player," advises Woodcock.

You should hold staff to productivity standards that you develop for specific job functions in your practice. Consider offering monetary or other types of incentives to staff who meet and exceed your standards.

Of course, knowing what you need is one thing; knowing whether employees are meeting your expectations is another. Sometimes neither the employer nor the employee knows for sure whether the staff member is doing a good job. You need to know what the employee's actual productivity is, and that information is difficult to glean without a good practice management system.

Speaking of which ...

Challenge: Purchasing technology

When the doctors at Arizona Oncology Services, a 20-physician radiation oncology group based in Phoenix, realized they couldn't determine how well they were doing financially with a new brain cancer procedure without performing weeks of research to run several reports, they knew it was time for a new practice management system.

But how to find the right one? That job was handed to Joshua Mentzer, the practice's chief technology officer, who sorted through systems offered by more than 100 vendors before paring the list to 30, and then to three.

Eventually, the group settled on the NextGen Enterprise Practice Management system.

Sound like a massive job? It was. But the task was made simpler - or at least was given focus - by Mentzer's meticulous interviews with representatives from each of the practice's clinical and administrative departments. The mission was to learn exactly what the practice needed in a practice management system - and what it didn't.

"For example, I knew the nurses would have to have a particular scheduling feature. And so I took those needs and filtered out certain vendors during the first phone interviews before I'd even sit down with them," says Mentzer. "In addition to the basic requirements, we were looking for flexibility, because that's something we feel we didn't have before. Our doctors informed me that they didn't think that any system, right out of the box, would be appropriate for radiation oncology - they felt that whatever it was, it would have to have some type of customization ability."

The results? Thanks to more accurate billing and quicker payment-posting, Arizona Oncology Services has increased revenues by 22 percent and decreased days in accounts receivable from 77 to 43. The system also has made staff management and retentions easier, according to chief operating officer Timothy Mc-Keough, because it makes certain tasks easier and provides managers with productivity data on each employee.

"That leads to being able to clearly tell someone whether they're doing a good job or not," McKeough explains. "That's good for staff retention - it might mean letting someone go, but at least when you have to sit down with someone you don't have to say, 'Well, I think you're not doing a very good job.' You can say, 'This isn't working - here's your data.'"

The know-what-you-need approach is appropriate for every major technology shopping expedition, including those for an electronic medical record (EMR). (See our story on using a request for proposal (RFP) to select technology vendors, page 55.)

Mentzer says he sees practices all the time basing buying decisions on factors that should be largely irrelevant to the group, because it hasn't thought carefully enough about its needs. That makes the practice vulnerable to being awestruck by a system's bells and whistles, only to learn after buying it that it doesn't do what they want.

"We have two to four practices a month come through our offices to see our software, [and] to see how we did it, and the biggest problem with them is they don't know what they need," says Mentzer. "They get 'feature shock,' as in, 'This is really neat; this is great,' and they allow that to influence their decision."

Or as McKeough puts it, "You can end up getting something that looks like a Jaguar and runs like a Yugo."

As tough as it is to find the right product, one thing about a good practice management system is that it can help you boost revenue, reduce denials, and fight back against stingy payers.

Speaking of which ...

Challenge: Dealing with payers

When it comes to dealing with payers who downcode or bundle your charges without alerting you, who underpay on certain codes inexplicably or don't pay in a timely manner, or who simply deny claims that you think should be paid, a good practice management system is invaluable in helping you understand what's going on and respond effectively.

"The only way to deal with those payers is through technology," insists Mentzer. "You have to be a step ahead of them. Right now I hear that so often from practices - I'll ask them what's going on with their billing, and they say, 'Well, I don't know.' And they have no way of knowing. And that's one of the great things about our system: We can build in the allowable for each payer, and whenever a payer pays us at an allowable below what's in the contract, the system immediately creates a task and assigns it to a user."

Reynolds and others agree: the most efficient way to handle payer problems is to do so in aggregate, and the only way to do that is to utilize technology. Use your system to run reports on specific codes and/or payers to get a sense of what services are - and are not - being paid. If you're supposed to receive a particular sum from Payer X for a specific code, and you're getting less than that or nothing at all, find out why. If you think you're right and the payer is wrong, gather all the disputed charges and address the issue as a whole. And if it's your practice that's wrong, make sure you understand the problem and correct it. Your system should be able to help you with that, too, by flagging charges that don't look right.

"A lot of these difficult issues with payers are caused by a group failing to bill something right," says Mentzer. "If you know you're not supposed to bill this code with that code because it's bundled, why do you keep doing it? If you know ahead of time there are things you can and can't do, and you can place some bottlenecks or edits in there to keep these things from even going out the door, you can avoid most of these headaches. It's so much easier to deal with this stuff before it's sent to the insurance carrier than after."

It's impossible to chase down every $5 underpayment individually, but when you're being shortchanged repeatedly for a procedure that's common in your practice, you need to identify and address the problem.

"When we know they're all on one payer or one code, we can settle it almost immediately," says McKeough. "And we'll just have someone put together an Excel spreadsheet, providing the dates of service, the [patients'] insurance IDs, how much we were underpaid, and a sum on the bottom with a note saying, 'Mail us a check.'"

You can also run reports on common procedures by all payers, as a way of helping guide decisions about your future relationships with some of them. Be careful to consider the whole picture, though, before dropping any contracts - a seemingly lower-paying contract may actually be a better deal than one with higher allowables, if the lower-payer is timely and hassle-free.

One thing's for sure, says Reynolds: you can't count on the carriers to help you out. A payer isn't going to alert you that you could get more of its money if only you'd make a minor change in your coding practices. It's incumbent on you to know what's coming into your office, and how much effort - and time - it's taking to get it there.
Your time is perhaps the most valuable thing you have, after all. You literally can't afford to waste it - or have it wasted for you.

Speaking of which ...

Challenge: Scheduling

Maybe it's just a sign of the times. What with so many two-income families struggling with super-hectic schedules, suburban traffic jams worse than ever, and the apparent decline in basic civility in American life, it's little wonder people so commonly show up late for appointments - or not at all.

Not that any of those excuses makes life any easier on you. In the modern medical practice, it's tough enough to make ends meet when everything goes smoothly; you can't afford to waste appointment slots. It costs your practice money, makes it harder for you to stay on schedule, and exacerbates patient wait times.

A few years ago, practices like Potomac Physicians could grudgingly tolerate the no-show problem. It was annoying, says Reynolds, but because so many of the practice's contracts were capitated, it didn't matter very much if a patient blew off an appointment, as long as the patient rescheduled.

"You were getting that capitation money, anyway, so you could afford to see Mrs. Jones at another time," says Reynolds.

No longer. With capitation just about dead as a reimbursement model, Potomac Physicians had to find a way to reduce if not eliminate its no-shows, and to minimize their impact on its operations. Its answer: open-access scheduling. Two years ago the practice scrapped its old system of requiring patients to call days or weeks in advance for appointments, and instead committed itself to seeing most patients the day they call.

"As we like to say, we give them what they want when they want it," says Reynolds. "It's all about service, and that's the only way to make the business run."

It wasn't an easy transition; getting the group's physicians to buy in to a radically different scheduling system was a tough sell. But it's been worth it.

"Often we had to make our schedule go longer than the doctors expected, or add patients on where other patients were, and ask doctors to apologize when patients had to wait, but to work through it," Reynolds explains. "And since we've done that, we've been able to get to the point where 65 percent to 70 percent of our appointments are same-day, our schedules are full, and the no-show rate is probably 2 percent or less. And that was quite an incredible feat."

Best of all, she says, patients love it; when people are sick, it doesn't do them much good to get an appointment for two weeks later. Potomac Physicians "could never go back" to its old scheduling system because patients have come to expect same-day access, she says.

But not every practice situation is appropriate for same-day access, and some aren't ready for, or interested in, making the switch. In those cases, Woodcock suggests you consider the following possibilities:

  • Appointment reminder calls and patient call-backs. Many practices use reminder calls as a way of reducing no-shows. Yet some are still plagued by the problem, as patients tend to ignore or forget about the reminder messages left on their answering machines. Some groups are now requiring patients to call the practice back to confirm the appointment. If the patient doesn't call back, the appointment is canceled. "Practices that do this usually restrict it to a subset of important visits, like expensive procedures and new patients," says Woodcock. "If you implement this policy, remember to inform patients in writing before you start, and be sure you can handle the extra phone calls."

  • Charging patients. Should you charge patients a fee for blowing off an appointment? It's worth considering - more groups are charging fees that typically range from $15 to $25, Woodcock says, and the practice is "getting patients to pay attention." But consider the time and money it will take to collect the fees versus the benefit you'll get. "Don't even try this if your practice serves an indigent population or some other hard-to-reach patients," she warns. And if you go forward, explain it to patients in writing in advance, post signs, and have your scheduler remind patients about the fee when they make appointments. Often, the patients who forget to keep their appointments are busy professionals - and well-insured. Don't drive them from your practice just to fill your schedule with compliant, but lower-paying, patients. "Remember," Woodcock says, "the point is to get patients to keep their appointments, not to boost revenue $15 at a time or drive patients away."

  • Setting appointments when needed. Annual appointments are common in many specialties, but trying to schedule an appointment a year in advance is a great way to increase no-shows. Instead, remind patients six weeks or so in advance of their due date, and set the appointment when the patient calls in.

  • Pre-appointment screening. Subspecialists with a narrow field of clinical care often find that many inappropriate patients are referred to them. If you're in this boat, consider a pre-screening system. But be careful not to make it too cumbersome or time-consuming; patients should know the day they call whether they'll be able to make an appointment, and referring physicians should be educated on precisely the clinical issues you're prepared to handle - and those you aren't.

Challenge: Too much paper

In different ways, many of you who responded to Physicians Practice's query about the toughest practice challenges cited the general hassles associated with regulatory compliance, defensive medicine, and documentation.

Richard Plunkett, an emergency physician in Yakima, Wash., complains about the ever-increasing rules for getting paid by Medicare and Medicaid.

"The federal government's documentation requirements to get paid have escalated every year, forever," says Plunkett. "We get feedback all the time, saying, 'You delivered a level four service but you missed a bullet here and there, so we could only code it as a level three,' because the government's position is, if you code it higher than it should be, it's fraud."

Reynolds laments the need to store all the medical records that the practice has built up over the years. "Office space can be very expensive," she says. "And when you obtain this very expensive space just to store records, it doesn't feel right, but you have to have the records here so you can access them when you need them."

Reynolds is happy with her group's practice management system, GE Medical Systems' Centricity Physician Office - Practice Management (formerly Millbrook Practice Manager), but says she'd love to have an EMR if only to free the practice of the mounds of paper it deals with.

But her worst fear, she says, is buying the wrong system: "It could be that we're a little scared. But I tell you, whenever I read a journal, and I read an article that says, 'We now have the right EMR,' I think that's awful - that scares me to death."

One solution might be to "build your own" EMR - to make use of your existing information technology infrastructure, perhaps adding a few relatively inexpensive items, to digitize your practice, suggests Woodcock. Here's how:

  • Create a shared database by organizing your transcribed office notes (in electronic form) by patient identifiers. Through a database program, you can put the notes on a local area network and access them by your designated identifier. That makes each note accessible to every physician on the network - a great solution for practices that share patients.

  • Get rid of paper by scanning every scrap that comes into your office, from lab results to operative notes. Add the scanned images to your database. You can even scan patients' insurance cards and EOBs to improve efficiency in the billing office.

  • Use personal digital assistants to capture charges and download the charge information into your computer system.

  • Use e-mail and instant messaging to distribute telephone and other messages internally.

  • Post pertinent information to which you or your staff needs quick access on a secure Web site. You may be able to set up a very simple site for a small fee, or for free, through your Internet Service Provider.

A do-it-yourself system like this one surely won't have all the capability of true EMR. But it may be a good, inexpensive, interim step for practices interested in, but scared of, taking the EMR plunge.

Worth the effort

Modern physicians are victims of their own success - and of society's. As medicine has advanced, patients have gotten the idea that nearly anything can be cured and that doctors should be perfect every time. Moreover, as societies have sought to protect the poor and vulnerable with government benefits programs, some people have concluded that not only should their healthcare be flawless, it ought to be free, too.

That leaves physicians in a difficult position. But not an impossible one. With diligence and imagination, you can make your practice run more smoothly, improve the quality of your life, boost revenue, lower overhead, and even keep your patients happy. It isn't easy. But it's worth the effort.

Bob Keaveney, editor for Physicians Practice, last wrote about practicing "bare" in the May issue. He can be reached at

This article originally appeared in the June 2004 issue of Physicians Practice.

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