Preventing Staff Turnover - Do the Small Things

Brian M. McCook, CPA, Director of Health Care Services

One of the major concerns for physician practices is whether they are paying their employees appropriately.  When discussing this issue, it is crucial to keep in mind that there will always be a higher paying job somewhere.  Although it is critical to make sure your practice is competitive in the marketplace in terms of pay and benefits, focusing on the small things could make all the difference in the world.

So what are some of the small things you can do: 

• 1. Teamwork
• 2. Work-Life Balance
• 3. Continuing Education
• 4. Communication

Establishing a sense of teamwork among all members of the practice, from the physicians to the front desk staff, is crucial to the success of the practice.  Everyone enjoys working towards common goals as one cohesive unit…working individually isn’t much fun.  Empower people by giving them responsibility and allowing them to be involved in work-flow processes and improvement.

Work-life balance is important to everyone.  Allowing for flexible schedules, such as working four-day workweeks, can be a major incentive for employees.  Taking the time to develop relationships with your employees will allow you to work with them and help them meet their personal needs while meeting the practice’s needs as well.

Show employees you are investing in them by offering continuing education.  Sending them to appropriate training courses to gains skills to do their jobs more effectively and efficiently can increase productivity.  Ultimately, that helps make the practice more profitable.

Finally, none of the above factors can obtain the desired goal without good communication.  Taking the time to develop relationships with all employees and making sure you regularly provide them timely feedback will show you are committed to them as a productive member of the practice.

Maintaining good staff is an investment of time, energy and money.  Many people ask “can I afford to do this for an employee?”  I would counter with “can you afford not to?”

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How Do You Evaluate the Performance of Your Practice?

Brian D. Meyers, CPA, Health Care Consultant 

One way to do this is to use key performance indicators (KPIs).  KPIs are those benchmarks or statistics that are most important for management to monitor.  While you can adopt KPIs for every facet of your healthcare operation, let’s focus on accounts receivable indicators. 

Every organization will not have the same KPIs.  This is due to the fact that management of one practice may want to know one thing while another practice wants to track something else.  For A/R purposes, though, the indicators tracked should be pretty similar.  For example, most organizations track: 

• Days Receivable Outstanding (DRO)
• DRO > 90 days
• DRO < 30 days
• Net Collection Ratio
• Bad Debt as % of Total Charges 

In addition, many practices track lag days between date of service and date of charge entry, gross collection percentage, and rejection/denials by payer. 
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Is a Lockbox the Answer? Maybe.

Brian D. Meyers, CPA, Health Care Consultant 

A number of practices have asked my opinion on switching from their current post office box to a bank lockbox.  There are differences between the two and each has its pros and cons.  Ultimately, the decision differs from practice to practice based on your circumstances.

First, some background on post office boxes and bank lockboxes.  A post office box is just the place where your mail goes that isn’t at your physical location.  Both payments and other mail can be received in a post office box.  A bank lockbox, on the other hand, is where you would direct your payments for deposit.  This is a small, but key difference.  The bank lockbox is a function of your depository account with your bank.  When the items are received at the bank, they are deposited into your account and you receive copies of the checks and accompanying attachments from your bank. 

Should you change to a bank lockbox?  The answer to this question depends on several things, including what your bank offers, how much the lockbox costs, how much volume (number of deposited items) you have, and how open to automation you are. 
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Basic Controls Safeguard the Assets of Your Practice

Richard D. Krieger, CPA/CFF, CFE, CIA, Director of Fraud Prevention Services

With the hectic schedule that physicians typically follow, many doctors are more than happy to turn over the financial details of their practice to their staff.  In a practice without adequate internal controls, however, that decision could prove to be extremely costly. 

Although every practice will vary to some degree, the following basic controls will go a long way towards ensuring that assets are properly accounted for and safeguarded against potential misappropriation.

• Bond all appropriate practice employees.
• Use a bank lockbox for payer and patient deposits.
• Segregate job responsibilities; the person receiving cash should not be posting payments to patient accounts.
• Reconcile receipts to sign-in sheets and appointment books on a daily basis.
• Maintain prenumbered patient charge tickets and account for the numerical sequence daily.
• Reconcile daily cash posting to the bank statement.
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Just How Effective is Your Front Desk Staff?

Kris Pearce, CPA, Tax Associate

As a physician or office manager, you are rarely on the same side of the desk as your patients.  But you can ask the right questions to determine how your office is doing and if improvement can be made in this area.  A couple of examples are: 

• Low proportion of co-pays being collected
• Large number of small balances outstanding from patients seen on a regular basis

If the answer to either of these is yes, there is room for improvement. There are several ways to determine exactly where improvement is needed and ultimately deciding the effectiveness of your front desk staff:

• Decide and set goals for the front desk Involve the staff in setting the goals
• Involve your staff in these goal-setting measures
• Determine what is important and how it will be measured
• Establish policies and procedures
• Prepare a standard list of questions to ask patients at time of service
• Train your staff on the new policies and procedures
• Observe and monitor
• Make adjustments when necessary
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Electronic Claims – How Do I Make Sure They Don’t Get Lost in the Shuffle?

Brian D. Meyers, CPA, Health Care Consultant 

 ”How can I be sure the payers received my electronic claims?”  That is one of the most common questions asked by physician practices today.  

The great part is that there is a simple answer: 

Your practice should routinely receive confirmations of the claims sent from your clearinghouse and received by the payers.  If you are not receiving these reports, ask your clearinghouse where to find them.  

The Accounts Receivable staff needs to be very conscientious about checking these reports, identifying claims that did not transmit, correcting them if necessary, and re-sending the claims.  More and more, payers will accept the clearinghouse’s confirmation reports as proof of timely filing - this is a wonderful thing to have on your side.  It is in your best interest to be on top of these reports since neglecting them means you are potentially letting money walk out the front door.

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2010 Health Reform Legislation: How will the Changes Affect You?

Brian M. McCook, CPA, Director of Health Care Services

The recently enacted legislation will bring about some major changes to health care in this county.  In working with RIA, one of our date and information resources, we have found that we can break down the most prevalent provisions into several categories, as outlined below. There are various timetables for these to go into effect.  While it is important to be familiar with all the changes that may affect you, here are some of the ones we think you will want to know about:

• Individual mandate. The new law contains an “individual mandate”-a requirement that U.S. citizens and legal residents have qualifying health coverage or be subject to a tax penalty.
• Premium assistance tax credits for purchasing health insurance. The centerpiece of the health care legislation is its provision of tax credits to low and middle income individuals and families for the purchase of health insurance.
• Higher Medicare taxes on high-income taxpayers. High-income taxpayers will be hit with a double whammy: a tax increase on wages and a new levy on investments.
• Floor on medical expenses deduction raised. Deduction goes from 7.5% of adjusted gross income (AGI) to 10%.
• Limit reimbursement of over-the-counter medications from HSAs, FSAs, and MSAs. The new law excludes the costs for over-the-counter drugs not prescribed by a doctor from being reimbursed on a tax-free basis.
• Increased penalties on nonqualified distributions from HSAs and Archer MSAs.
• Limit health flexible spending arrangements (FSAs) to $2,500.
• Dependent coverage in employer health plans. Effective on the enactment date, the new law extends the general exclusion for reimbursements for medical care expenses under an employer-provided accident or health plan to any child of an employee who has not attained age 27 as of the end of the tax year.
• Excise tax on indoor tanning services. The new law imposes a 10% excise tax on indoor tanning services.
• Liberalized adoption credit and adoption assistance rules. For tax years beginning after Dec. 31, 2009, the adoption tax credit is increased by $1,000. 

For more information, contact your AMD Tax Advisor.

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Emergencies or Just Poor Work Habits?

Doris K. Reynolds-Johnson, CPA, MBA, Senior Health Care Consultant 

Question:  Patients are always complaining that they wait too long to see the doctors.  My front desk personnel are stressed out from the nasty comments and glares from waiting patients.  What can the staff or I do to address this? 

Answer:  If a doctor (or doctors) in your practice consistently runs late and there is no legitimate reason for it, then the staff is stuck making excuses.  Rarely will a patient express their anger or frustration to the doctor.  The staff is always the easiest target. 

Are there legitimate reasons for the delay?  A true medical emergency, such as a life-saving surgery, or a personal emergency for the doctor, or even a last-minute meeting at the hospital are some legitimate reasons.  Medical emergencies will occur depending upon the type of medical practice.  And, medical emergencies should be expected periodically.   

However, if the doctor is chronically late because they accept personal (non-emergency) calls during patient hours; allow walk-in vendor visits; tend to dawdle in the morning and pick up the pace in the afternoon; or complete yesterday’s charts while patients are waiting to be seen today. . . .  these are not emergencies.  These are simply poor work habits.  What can be done? 
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Key Performance Indicators Measure Success

Brian Meyers, CPA 

Many physician practices I work with want to know how to evaluate the practice’s performance.  One way is to use key performance indicators (KPIs). 

KPIs are those benchmarks or statistics that are the most important ones for management to monitor.  While you can adopt KPIs for every facet of your healthcare operation, let’s focus on accounts receivable indicators. Every organization will not have the same KPIs.  This is due to the fact that management of one practice may want to know one thing while another practice wants to track something else.  For A/R purposes, though, the indicators tracked should be pretty similar.  For example, most organizations track: 

• Days Receivable Outstanding (DRO)
• DRO > 90 days
• DRO < 30 days
• Net Collection Ratio
• Bad Debt as % of Total Charges 

In addition, many practices track lag days between date of service and date of charge entry, gross collection percentage, and rejection/denials by payer. 

Creating a dashboard to track and monitor your practice’s chosen KPIs can provide a wealth of information.  Many of these KPIs can be tracked on a year-to-date or rolling six month basis, each of which will provide your practice with different information.  A dashboard is a great way to view the data in a quick and easy to follow format - something that doctors can glance at and understand what’s happening with the practice.  Also, dashboards can provide a quick signal when something may need attention. 

The great thing is that you get to decide what is important to your organization.  Then decide what an acceptable performance level is.  Finally, track your results against your own historical results as well as the results of other similar-sized practices, assuming this information is available.  Look through the data you have available - there is always something you can track and learn from!

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It’s Summertime Somewhere: Policies Help with Vacation Woes

Kris L. Pearce, CPA

It may be snowing outside but everyone is thinking ahead to summertime and that coveted vacation time.  I know I’m ready! 

For many businesses, professional services firms, physician offices and not-for-profits, this can create issues when several staff members want to take vacations at the same time.  By taking a few simple steps, many of these problems can be alleviated.

First and foremost, institute a standardized policy that describes the steps to take when requesting vacation.  Make sure the policy is specific such as “request must be received at least two week in advance”.  It can also state that requests are honored on a first come first serve basis.

If requests are received that don’t follow the stated policy, it is important to decide how to handle them.  If you do decide to override the written policy, be aware of the consequences this will have on other employees.  In essence, you are setting the expectation.

Another item that can be used to alleviate problems is a calendar in the employee lounge or other accessible area.  Post on this calendar all vacation days once they have been approved.  Employees will already know if they will be able to take off certain days before they fill out a request form. 

The easiest way to avoid pitfalls with vacation scheduling is to have a published policy that is followed on a consistent basis.  Make sure the policy is stated clearly in the employee manual.  Most importantly, communicate the policy to all members of the practice so the expectation is set.  After all this work, you deserve a vacation!

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