The business of medicine is one that holds surprises around every corner. From insurance delays to clients who refuse to pay to the ever-shifting prices of medical supplies and equipment, being able to track profitability to ensure success can be an extremely challenging endeavor – one that has kept business professionals on their toes for years.
The issues are the aforementioned variables, plus others. The nature of a medical practice can make collecting payments extremely difficult, as self-pay patients may not be able to pay and insurance companies are notorious for refusing to pay full charges. Despite the difficulty of dealing with these issues, however, they are unavoidable.
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Topics:
oates,
medical accounting,
medical practice,
john shepperson,
oates co,
insurance,
affordable care act,
hipaa
Multi-physician practices seem like a slam dunk in terms of logistics, billing, and other administrative considerations. Once the overheads are in place, theoretically it should be easy for practices to add additional physicians. Yet many practices struggle to manage multiple physicians and/or clinical teams.
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Topics:
transition,
multi-physician,
medical practice,
software,
multiple physicians,
multi-physician practice,
john shepperson
Revenue sharing in a multi-physician practice is often done on a production based system. Production based pay gives the harder working physicians a larger slice of the earnings. Revenue allocation is also sometimes done based on a percentage of the revenue regardless of an individual's production. Both of these methods have pros and cons.
If the group is a single specialty group, both systems can often be used – a flat, smaller percentage divided equally and another portion based on production. This can depend on the type of specialty; if two doctors share the same specialty, equal payment can encourage them to back each other up; if one doctor is out sick or on vacation, the other doctor willingly steps up to help cover the workload.
In practices with multiples specialties, production based revenue allocation is an often used method. A large number of groups use receipts to measure productivity, where the direct costs are subtracted from the revenue and overhead costs are assigned. This system may seem fair but in areas of the country where most patients have low billable amounts, some physicians will be at a disadvantage. This will require the group to find a way to balance the mix.
How expenses of the practice itself are divided among the group can have a huge effect on income distributions. If expenses are to be divided evenly, it would be best if all the doctors’ revenue is somewhat equal. The other option is to charge all expenses that can be tracked to the doctor who uses them. This, however, could cause physicians to start taking shortcuts to save money and could affect the quality of care given to patients.
Regardless of how the revenue allocation is decided, an accurate and understandable system must be in place. All members of the group need to feel that they are getting a fair share and no one should feel as if they are carrying the bulk of the load.
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Topics:
revenue,
medical practice,
accounting,
health care,
healthcare,
billing,
multiple physicians,
multi-physician practice,
allocation,
john shepperson
Cost allocation is the method of identifying and assigning costs to the site at which they are incurred. Each branch/location of a medical practice is considered a ‘cost center’ and multi-site medical practices can have varying costs based on the location and services offered at a particular site. For example, sites that house administration will have lower costs than sites that house laboratories or operating rooms. Cost allocation is very beneficial in the management of a multi-site medical practice.
There are several good reasons that allocating costs is important to a multi-site medical practice. When costs are assigned correctly, the types of costs at each location can easily be analyzed, which is very important in the budgeting process. With a budget that is based on accurate cost allocation it is possible not only to see expense overages quickly, but also to correct expense overages quickly. Keeping track of expenses is essential for internal planning.
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Topics:
cost allocation,
medical practice,
accounting,
billing,
multiple physicians,
multi-site,
allocation,
expenses,
cost center,
john shepperson
A major obstacle for medical practices is record-keeping. Records of patient visits, payment methods, invoices, types of treatment given, and medications prescribed are all examples of what medical practices keep track of. What many people don’t consider, however, is that medical practices – just like every other business – also have to keep track of employee hours, inventory, overhead costs, and profitability.
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Topics:
record keeping,
medical practice,
health care,
healthcare,
billing,
Centricity,
NextGen,
software integration,
john shepperson
After the last patient of the day has left your office and your daily paperwork has been completed, you need to know where your medical practice stands. At this point, medical accounting software should come into play. Medical accounting software is an efficient and easy way to maintain your accounting records because it is:
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Topics:
record keeping,
medical accounting,
HIPAA compliant,
medical practice,
accounting,
software accounting,
john shepperson
