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A wealth of tax and financial information for healthcare professionals

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I am excited to be doing business with you.  This is certainly a refreshing change from our prior CPA experience. - Scott, MD

Practice Management Services

We know it can be difficult to balance your time and responsibilities as a business owner and a direct healthcare provider.

You need trust that your accounting, payroll, business operations, and corporate tax filings are overseen by competent and experienced people.  

At Schwartz & Schwartz, we work with you to develop a service menu that meets your specific needs.  Our partners visit your offices personally each year to see your practice first-hand.  Additionally, we schedule phone, office and WebEx online meetings as needed to ensure we stay on top of your financial needs.

Our Practice Management Service Menu includes:

• Small Business CFO Services

We handle all of your day-to-day financial needs so you can focus more time on your patients.  You benefit from the services of a CFO but at a much lower cost.  We take care of your bookkeeping, payroll, accounts payable, management reports, and other financial aspects of your practice.

• Payroll

We manage all areas of your payroll processing and administration, or we can assist you if you do payroll in-house.

• Financial Analysis Meeting

We meet with you regularly at your lace of business, at our office, or by WedEx online conferencing to review your books and interpret your data.  We listen to your goals and advise you on matters such as overhead compared to collections, plans for capital expenditures, staffing, and ways to increase profitability and expand your practice.

• Overhead Analysis

Based on our large collection of industry specific financial data, we compare the overhead expenses of your practice with those of similar practices to identify areas that need improvement.

• Accounts Receivable Analysis

We review your accounts receivable to determine if you are turning away business or taking too many risks.  We also develop a plan to increase your collections.

To learn more about our Practice Management services, please contact us at 800.471.0045 or use our online request form to schedule an appointment.

Feature Article:

$44K FOR COMPLIANCE WITH NEW ELECTRONIC HEALTH RECORDS MANDATE

by Andrew D. Schwartz, CPA

Take a look at the 2010 federal budget, and you'll see that the proposed deficit for the year ended September 30, 2010 is $1.171 trillion on a federal budget of just under $4 trillion.  Even so, the federal government is willing to pay you $44k to implement Electronic Health Records (EHR) within your practice.

Included in the narrative section of the 2010 federal budget called Jumpstarting the Economy and Investing for the Future, President Obama states, "The current, paper-based medical records system that relies on patients’ memory and reporting of their medical history is prone to error, time-consuming, costly, and wasteful. With rigorous privacy standards in place to protect sensitive medical record, we will embark on an effort to computerize all Americans’ health records in five years. This effort will help prevent medical errors, and improve health care quality, and is a necessary step in starting to modernize the American health care system and reduce health care costs."

The American Recovery and Reinvestment Act of 2009 earmarked $19 billion to provide an incentive for healthcare professionals to implement an EHR system.  Based on these rules, you could receive a subsidy from the federal government of up to $44k for "meaningful use" of a certified EHR technology, as follows:

• $18k for first year of implementation during 2011 or 2012 - decreasing to $15k if first year of implementation is after 2012.
• $12k for the second year
• $8k for the third year
• $4k for the fourth year
• $2k for the fifth year

Please note that there is a reduced subsidy for professionals who implement EHR in 2013 or 2014.  Wait until 2015 or later, and you won't be eligible for any subsidy.

Actually, starting in 2015, there will be a penalty equal to 1% of your Medicare and Medicaid reimbursements for failure to implement EHR.  The penalty will increase by 1% per year over the following two years - to 2% in 2016 and 3% in 2017.  The Secretary then has the authority to continue decreasing your Medicare and Medicaid reimbursements by 1% per year for each of the next two years if less than 75% of the medical community has implemented EHR. Each year that you don't implement EHR, therefore, could cost you as much as 5% of your Medicare and Medicaid receipts starting in 2019. 

How do you qualify for this subsidy?  For starters, you need to demonstrate meaningful use "through means specified by the Secretary which may include an attestation, the submission of claims with appropriate coding, a survey response, or other means specified by the Secretary."  You must also use electronic prescribing in connection with your patient care.

The rules also require that your EHR is "connected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of health care, such as promoting care coordination."

The final requirement is that you meet the standard for reporting on measures using EHR, and "submit information for such period, in a form and manner specified by the Secretary, on such clinical quality measures and such other measures as selected by the Secretary."

Assuming you comply with these provisions, expect to receive your subsidy payments directly from the federal government in a manner similar to how you receive your Medicare payments. And the $44k that you get from the federal government might very well cover the bulk of the costs associated with the purchase, installation, and implementation of an EHR system for your practice

HOW A "PRACTICE ASSESSMENT" CAN IMPROVE YOUR PRACTICE

by Carolyn Pickles, MBA, FACMPE

Practice assessment offers healthcare professionals insight into ways to enhance their practice by, for instance, improving service, increasing efficiency, and enhancing the revenue cycle, all particularly important goals in today’s challenging economic times. 

The focus of a practice assessment can be broader (such as ‘are we processing patients in the most efficient manner’, ‘how are we doing in terms of patient service’, and ‘is there room for improvement in our revenue cycle’), or it can be more specific and based on concerns about certain aspects of the practice as identified by doctors and management (such as ‘I think my income is lower than that of my peers’, ‘I’m wondering if we are overstaffed in our clinical area’, and ‘we seem to be getting more patient complaints than we used to’).  Common areas to assess in a practice include:

ü        Operational efficiency – Is the day to day functionality of the practice being maximized?

ü        Patient service – Does service meet patient expectations?

ü        Revenue cycle management – Are processes in place to maximize revenue collection?

ü        Revenue – Is the practice maximizing its revenue through appointment scheduling practices, coding, and use of ancillaries?

ü        Compensation – Is staff and doctor compensation in line with industry standards?

ü        Overhead – Is the practice overhead rate comparable to industry standards?

ü        Staffing issues – Are staff members performing according to expectation and are staffing levels comparable to industry standards?

ü        Financial systems – Are cash, accounts payable, and payroll controls appropriate?

ü        …and more.

Let’s review some examples of how assessments are completed.  To evaluate the operational efficiency of a practice, patient processing might be examined from the point of the first new patient telephone call, through the registration process, initial visit, check out, and billing processes.  Patient service is easily assessed as part of this process by observing professionalism and service attitude, both in person and during telephone conversations.  

Review of the registration process, billing processes, insurance follow up routines, and analysis of 30, 60, 90, and 120+ accounts receivable aging categories provides insight into a practice’s revenue cycle and accounts receivable management.  In reviewing financial systems one might examine physical processing of payments, payables, and payroll as well as related control systems.  Staff compensation is commonly analyzed by benchmarking hourly rates and salaries against industry data for similar positions.  The healthcare professional’s compensation can be analyzed this way as well.     

A practice assessment should always incorporate a customized report of findings and recommendations for improvement.  A face to face meeting is also desirable, as it allows for discussion of the report as well as fine tuning of recommendations.  Some doctors and office managers prefer to work through the task of implementing recommendations on their own whereas others prefer to engage the consultant to assist them.  Either way works however, if the practice manager does not have the skill set required to make the necessary changes, serious consideration should be given to engaging the consultant to help during the implementation phase.  A practice may want to consider a limited follow up assessment six to eighteen months later, based on the type and extent of the changes.

The benefits of a practice assessment include the potential to:

ü        improve patient service; 

ü        enhance operational efficiency and effectiveness;

ü        improve billing, collection, payroll, and accounts payable processes;

ü        reduce the likelihood of theft;

ü        identify new sources of revenue;

ü        enhance staff management;

ü        determine which protocols and routines are effective and efficient - as well as those that are not;

ü        benchmark various types of practice data against industry standards;

ü        learn about problem-specific alternatives, solutions, and resources.

Who can complete a practice assessment? An experienced practice manger is capable of performing an assessment. However, there are benefits to engaging the services of a consultant with experience in practice management.  He/she brings a fresh outlook and offers an outsider's independent perspective about the strengths of the practice and the opportunities for improvement. 

How much time is required to complete an assessment?  The time required to complete an assessment is dependent upon the number and depth of areas reviewed.  A typical assessment involves one to two days to gather information, plus time to complete any related research and actually write the report. 

How is information gathered?  Information is usually gathered via observation, question and answer, interviews, informal discussions, and data analysis. 

What does a practice assessment typically cost?  While the investment in this type of practice analysis can cost a few to several thousand dollars, these monies can potentially be recouped via the financial aspects of the project, for instance, by identifying ways to improve revenue cycle management, increase revenue, decrease overhead, and increase operational efficiency.

In summary, the focus of a practice assessment can be general or more customized.  It is a valuable and cost effective tool to maximize the effectiveness, efficiency, and fiscal management of a medical practice and it offers insight into ways to improve the practice, for the benefit of patients, physicians, management, and staff.   

Carolyn Pickles, MBA, FACMPE is a practice management consultant who works with physicians, their managers, and their staffs to improve functionality in operations, finance, human resources, information management, governance, patient care systems, quality management, and risk management.  She can be reached at (413) 530-3823.