Planning now can ensure a successful 2013

Answers in Practice

Rachna Chaudhari

Rachna Chaudhari is the AAD's practice management manager. Her column offers tips in response to common member questions.

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Now that you are fully entrenched in the New Year, you should take this time to perform a checkup of your practice and plan all of your key strategic projects and goals for the year. Assessing the health of your practice is a necessary precaution to ensure you will have a successful year. Members of the Academy often ask its practice management staff how they should set up a yearly planning schedule to avoid last-minute time crunches and improve practice performance. The following calendar, which is adapted from the Academy’s Starting and Marketing a Dermatology Practice Manual, is intended as a baseline that the practice can use to modify and tailor to meet the practice’s preferences.

January: Closing financial record of prior year and beginning new year

Many practices have a corporate and tax year that conforms to the calendar year — i.e., Jan. 1 to Dec. 31. Therefore, closing the books for the prior year will involve discussions and planning with the practice’s tax accountant to minimize tax risks and optimize results. You should discuss and finalize the following issues in January:

  • Employee IRS W-2: Jan. 31 marks the deadline for employers to issue their employees the preceding year’s W-2 form. Make sure to work with your accountant to meet this deadline and distribute the form to all practice staff.
  • Patient accounts: Analyze all patient accounts to determine who has not paid their co-pays and deductibles from the previous year. Start the collections process for outstanding claims found during this review.
  • Fee schedule: Create your fee schedule for the new year. Check out Physicians Practice for guidance on setting a fee schedule.
  • Physician scheduling: Prepare your 2013 physician and non-physician provider schedule. You want to schedule for vacations or other personal needs (as much as is possible) for at least a six-month period. [pagebreak]

February: Prepare your budget for the year

If you have never established a yearly budget, it is recommended that you begin immediately and ask your accountant for assistance. Your accountant can help you design and develop your own budget forms and processes. Analyze previous years’ expenses and revenue to estimate your yearly budget. Ensure your office manager periodically compares your actual revenue and expense ratios to those budgeted so you stay on track to meet your financial goals for the year.

March: Contingency planning

The past decade has witnessed disasters nationwide, many of which resulted in major damage to many businesses. Practices should make every effort to prevent or, at least, minimize potential damage from disasters. In addition, an overlooked part of HIPAA requirements is that every medical practice must have a disaster plan, which must focus on the preservation of all patient data. This includes, but is not limited to, medical records and financial data, which are also required to be protected under HIPAA’s privacy rules.

Appoint one of your staff to develop a comprehensive contingency plan for your practice. It should take into account how your practice would react in the event of such a disaster and how the practice can ensure the protection of its patient and financial data. [pagebreak]

April: Analyze referral patterns

Take the time to determine your practice’s current referral base. All practices should be concerned about how they are perceived by their patients and referring sources. Take the following steps to ensure you maintain a healthy referring pattern:

  • Patient satisfaction survey. Ask your patients about their experience. Not only may it provide your practice with important feedback, but conducting a survey tells your patients that you care about their views. (Some survey instruments also help dermatologists fulfill part of component 4 of MOC.)
  • Referring office survey. Specialists depending on other physicians for their business would do well to consider surveying them to gauge how they view your service. Your practice may wish to conduct face-to-face visits, both physician to physician and office manager to office manager.
  • Staff meetings. Your practice may find it productive to have staff discuss ways that the practice could improve its service, and the perception of its service, to both patients and referring offices.
  • Newsletters/emails. Some practices have newsletters emailed periodically to active patients. Content can include health tips, news on staff and physicians, and services the practice may wish to promote. [pagebreak]

May: Tax planning

Corporate taxes have likely been paid in March and many tax accountants say that an ideal time to consider tax planning is in May or June each year. Take this time to meet with your accountant or practice attorney to plan out your tax filings.

June: Update staff job descriptions

The practice manager should devote time to updating employee job descriptions. In too many practices, job descriptions are not updated and become outdated and less useful to the goal of improving personnel performance. Ask each staff person to provide a comprehensive list of the tasks they accomplish. Carefully review these task lists. It could lead to job redesign, reassignment of tasks, and retraining. More details on employee management are available in the Academy’s Dermatology Employment Manual: A Guide for Personnel Policies and Procedures.

July: Mid-year assessment

Take the time to perform an assessment of your practice’s financial health at the mid-year mark. Ensure you are meeting your financial goals for the year and collecting any outstanding co-pays and deductibles. Also take a look at your fee schedule to see if any updates are required. Additionally, review your physician and non-physician provider schedules as well as whether any changes are required in your patient appointment scheduling calendar. Finally, take the time to perform a yearly review of your practice’s personnel policies and procedures. A yearly reassessment and update is helpful to keep your practice healthy and humming. More guidance on personnel policies and procedures is available in the Academy’s Office Policy and Procedures Manual. [pagebreak]

August: Review your compliance plan

You should continually assess your practice’s compliance with the rules of Medicare and third-party payers to avoid potential fraud and abuse in billing for the services you provide. Take this time to perform a yearly review of your compliance plan and whether there are any gaps in complying with these regulations. You may want to train your staff on these gaps if necessary. Your yearly compliance plan should include more frequent reviews of compliance issues; however, it is vital that you have someone in your practice serving as the compliance officer responsible for this review. More guidance on protecting your practice and forming a compliance plan is available in the Academy’s Maintaining Compliance in Dermatology Manual.

September: Analyze vendor contracts

It is important for your practice to evaluate your vendor contracts to ensure you are receiving the best rates possible. Look over the terms of each of your existing contracts and negotiate more favorable terms, including lower costs for bulk items like office supplies and medical supplies. Ask for your leasing costs for equipment to be reduced or learn about discounts on your malpractice insurance that you can become eligible for by implementing quality control methods. The Academy’s Buyer’s Guide, mailed with this issue of Dermatology World, includes a comprehensive list of other vendors who may provide similar services for a reduced cost. Your yearly goal should be to reduce the cost of at least some of these items.

October: Personnel performance reviews

Begin preparing for your personnel performance reviews by reviewing each personnel file and drafting an assessment of the job performance of each staff member. Schedule one-on-one meetings with each person to go over his or her review and determine whether any salary adjustments or bonuses are needed. Ensure all staff are aware of the process and distribute any applicable raises or bonuses before the end of the year. [pagebreak]

November: Strategic business planning

Take this month to look over your performance and fully analyze how you want your practice to move forward in the coming year. Have a meeting with all of the practice leaders and determine whether any new sources of revenue should be investigated, such as hiring a physician extender or adding a new line of service. Strategic planning is vital to your practice’s growth and should be performed continually.

December: Prepare for the coming year

Prior to year-end, it would be wise to project the current year’s income and expenses to help in your tax planning. Many managers and physicians work with the practice’s accountant to determine whether certain expenditures should be undertaken before year-end or deferred into the next year. This planning should also involve determination of bonuses, profit-sharing plans, 401(k), and any other distributions to physician(s) and staff.

Your practice also needs to be aware of all the regulatory changes going into effect the following Jan. 1. Check the Academy’s website or with your local carriers to determine all of the regulatory changes affecting reimbursement and compliance issues. You should also prepare any updates to the new fee schedule and perform a year-end analysis of any outstanding claims.