Each day I receive plenty of email from Nurse Practitioners, Physician Assistants/Associates and other clinicians who have questions about starting a practice, practice models, business development or a variety of other topics pertaining to practice operations, management and marketing.

This video (below) answers a question I received from one individual but encompasses a question I hear more and more often about starting or converting to a cash practice, also known as a direct pay practice.

While many have expressed interest in either starting a practice, focusing simply on direct pay models and avoiding insurance (and its inherent cost and headaches) or switching their already established practice to a cash basis, there are some pros and cons to this. In the final analysis it will depend on the provider and ultimately, their patient base.
Take a listen (6 minutes) and see what you think. Please be sure to leave a comment.

Medscape  recently posted the results of a survey where physicians rated insurance companies in terms of best and worse to work with and the factors that lead into those ratings.

This got me to thinking about us. Insurance reimbursement for NPs and other Advanced Practice Nurses is all over the board. Some companies recognize Nurse Practitioners and reimburse them for the work they do, other companies seem to be ignorant of the work we do. Then it also varies by state and region.

For example, here in Washington State, for the most part, I don’t have difficulty with insurance reimbursement. I am credentialed with the two “Blues” in our state, yet I hear from NPs in another state where the “Blues” refuse to credential NPs. Does not make sense does it.

If you have having difficulty, contact the American Academy of Nurse Practitioners and get in touch with the Multi-State Reimbursement Alliance people for your region.
OK. Let’s hear from you. What state are you in? Who is credentialing and who is not? What have you found that works and what doesn’t. Advice for others in your area about insurance reimbursement?

Nurse Practitioners and other  Clinicians can no longer continue business as usual.

Our patients (clients, customers) deserve and expect much more. Gone are the days when a white coat gives one cart blanche to treat patients and staff indifferently behind the ruse of being busy. There is no doubt that you are busy. But just as you want respect from your patients, they are now expecting it from you as well.  Addressing one of the most common concerns patients make about provider offices will go a long way.

You are no doubt familiar with this complaint: “Every time I go to that office, I have to wait for hours!” I trust patients waiting in your office, wait for a much shorter time. There is much we can do to reduce wait times, but waiting is a reality for both patients and providers. It’s a fact of life that emergencies and other situations can and do happen.

So what can we do to minimize the impact of waiting? Well, it turns out there is much that can be done.

1. First – stop calling it a “Waiting Room” and rename it a reception area or something similar. Waiting Room implies that I will be waiting, no matter what. Changing the name can help reduce that perception and soften the idea that there will be a short delay before seeing the provider.
2. Make your patients comfortable. Patients have been invited into your office to see you. Think of this as your work “living room”. Make sure the reception area is comfortable for your guest. Take a seat…are the chairs comfortable? What about the room temperature? Too warm? Too cool?
3. When we are waiting (and idle) time can seem to drag on and on. However, when we are distracted or better yet engaged, time flies. Do you have a variety of reading material that is up to date? And while you are at it, is the lighting appropriate for reading? I’m not a fan of TV’s in reception areas, but perhaps you may want to consider a TV or video screen that is playing something engaging and appropriate (maybe even educational)?
4. Comfort Station. If possible, it’s nice to have a restroom available to those who are waiting as well as water or other appropriate beverages depending on your office situation.
5. Children. It can be quite irritating to a non-parent (or parent!) to listen to a child who is bored and tired. If you see children, or the family members of young children, consider having appropriate items that may keep their hands and minds engaged.

Most important, if you have patients waiting to see you, make sure they are keep up to date on any delays. Consider offering them the option to reschedule. Respect your patients and their time. It will go a long way in making them happy, satisfied patients.

What changes can you make in your reception area today?

This is literally the most common question I receive from Advanced Practice Nurses (NPs, CNMs, CNS, CRNA’s) and Physician Assistants/Associates (PAs). So this week, I thought I would create a video to answer just that question. It’s short, about 10 minutes explaining the framework I teach in practice and business startup.

Please share your own tips with your colleagues below.

You are invited to join us on a FREE webinar on Sunday 10/30/2011. Keep reading to learn more!

As a Nurse Practitioner and a Physician Assistant, you work exceedingly hard every day to make sure your patients get the best you can offer. You have been well educated as a clinician and are quite accomplished in your area of expertise.

However, one thing that NPs and PAs don’t always understand (heck, it’s not often understood by those who educate us) is that we are a “business” unto ourselves. In fact, every “revenue generating” clinician  is a “business”.

Yet business education is lacking in our schools. Makes sense – they are busy making sure we are excellent clinicians!

It’s time we, truly begin to grasp the concepts of business in healthcare. I don’t mean just the kind of healthcare business that counts it’s beans at the end of the day, but a business in which the modus operandi  is creating a culture where healthcare a  “win-win-win” for all involed.

In order to get there…we need to be more aware of business concepts, how practices work, and how we can effectively make a difference in our own practices, or the practices of others.

And this is exactly what I want to talk about this Sunday, October 30th at 5PM Pacific on a free webinar. Space is limited, so please, go here now, listen to the video and sign up for the webinar.

See you on Sunday!

Those of you practicing in California during the summer of 2009 likely remember all too clearly when the state of California issued IOU’s for health care services you provided. This came to mind this past week when an insurance company in my state was “outed” for delaying over 300,000 claims to providers since Jan 2011 when they took over the state employee health care plan.

Given the current economic and health care crisis, I fear we may experience more situations where payment is not forthcoming, or significantly delayed. While there are many ramifications, the issue we need to discuss today is this: are you prepared for slow-downs or lapses in getting paid in your practice? And what can you do to get prepared?

To begin with, take a good look at the mix of payers you work with in your practice.  How many are commercial insurances and how many are Medicare and Medicaid or other state plans, and even cash? And even if you have a big percentage of commercial payers, you’ll want to make sure that you have different payers in that group. You want to make certain that in the event something happens to one of your main payers your practice will be able to continue.  Remember your mothers advice…“Don’t put all your eggs in one basket!”

Once you know your breakdown by payer, you’ll calculate what percentage of your patients are covered by each payer. With this information, it’s time to play some “what ifs”. To do this, calculate the percentage of income you receive from each payer. Set up a spreadsheet and enter your data and you should be able to run some scenarios to see how your income and practice might be impacted by the loss of one or more payers.

Next, you’ll want to come up with some possible responses to the loss of a payer regardless if it’s a slowdown in payment or a complete loss of that payment source. Ask yourself how you would handle this right now? What resources do you currently have at your finger tips to help you deal with such an event?

Do you have cash reserves your practice could draw from? Or do you have an established line of credit you could fall back on? If your answer is “No”, ask yourself what contingency plans you need to put in place to be prepared?

As a practice owner you must be monitoring your accounts receivable (AR). Work closely with your billing person to make sure it’s watched daily. Know the average length of time it takes for you to get paid from your payers. And if payments are not coming in as expected does it just involve a few claims or does it involve numerous patient and claims?

If you run into problems with receiving timely reimbursement, check with the payer to see if there is an issue. Make sure you document who you have spoken with and what their response is. You will need this later on when you follow up with them.

Depending on the size of the problem, you may want to let your patients know what is going on. Often times the plan members can do much to move the process along.

Unfortunately, there is no such thing as free health care. Without income you simply cannot run your practice and provide services for long. Obviously the last resort may be to no longer accept plans that don’t provide timely (and competitive reimbursement). There may come a time when you have to rethink which payer you can and cannot work with.

This is a situation we don’t like to think about. However, it’s happened before and it will likely happen again. Being prepared for cash flow disaster, just like being prepared for natural disaster, can help your practice get through potential rough spots, survive and thrive.

(c) Barbara C Phillips, NP

Family, partner, stranger or just walk away…which is right for you?

When it comes right down to it, there are only a few ways to getting out of your professional practice. Only you can determine which option is best for you. Here are some points to consider.

1. You could pass on your practice to family. However, a professional practice, like your primary care practice, may present a bit of a challenge. You may not be able to give your practice to a family member, unless he or she is professionally qualified to work in the business or is willing to hire a provider to do so. Therefore option one generally tends to be more feasible with small businesses like crafts stores or gift shops rather than a professional practice.
2. Another option might be transitioning the practice to a partner. If you already have a partner in your practice you might simply sell your part of the partnership to your partner (as outlined in your partnership agreement). Or, you may consider bringing in a partner(s) with the intention of transitioning the practice to the partner(s) within a certain time frame.
3. Of course, you can always sell the practice to an outside third party: either to another provider, provider group, local clinic or clinic chain. However, depending on the type of practice, the practice structure and overall condition of the practice this may be very doable or proof to be challenging.
4. And lastly, you can simply walk away from your practice. This option is always available to you. Here you simply notify your patients and close your office. You may choose to sell any business assets or donate them, it’s up to you.

As you may have already guessed, selling a professional practice presents unique challenges different from most other businesses. Here are just a few of them:

1. Typically the owner, you, provides the core services of the business.
2. Patient loyalty is with you and not with the “business” per se.
3. Goodwill, an intangible asset, is the main asset for most professional practices (unless the practice owns real estate and/or high ticket medical equipment).
4. The selling provider is concerned with the quality and continuation of care for his/her patients.

These issues may take on greater importance depending who will buy your practice. A clinic chain or provider group probably won’t lose any sleep over any of these issues. However, if you sell to a solo provider or small partnership it will be a different story. Here are some of the questions a solo practice owner might ask:

1. Is the practice solid?
2. Is there enough goodwill and can that be transferred to me?
3. Will the patients accept me? Will it be a good fit for me?
4. Will I be able to retain the established patient base?

To counter these issues and increase the chances of success, frequently buy/sell agreements provide for seller assistance during the transition period. This simply means that the seller agrees to help the buyer, the new provider, either by working with him/her side by side or by introducing (and hence endorsing) the new provider to the established patient base. Either way, providing seller assistance as part of the sale will help make the transition go much smoother.

©2011, Johanna Hofmann, MBA, MAc, LAc.  All Rights Reserved.

Income or Asset, or Both?

Regardless if you are just starting your nurse practitioner practice or if you have been in practice for a number of years, there will come a time when you will want to move on. This is not to be confused with failing in your practice or business!

At some point you may want to reduce the amount you work, tackle new adventures all together or just move into retirement. And it is often then when the question comes up: “What should I do with my practice” or “Just how do I go about selling my practice”? However, the optimal time to think about these questions is much sooner.

You probably will agree that the majority of clinicians start practices to realize a dream, to provide a valuable service to their community and to generate income. However, few of these practices are also started with an end goal or a clear exit strategy in mind. In general, few small businesses are started with a clear idea of what will happen with the business when the owner no longer wants to run it.

At this point you may think that you are just starting your practice or that your practice is just a couple of years old and hence thinking about an exit strategy is akin to putting the cart before the horse. Perhaps, but let’s take a closer look first.

At the most basic level small businesses (or practices) are started and operated in two distinct ways: to be an income business or to be an asset business. The focus of the income business is to generate, you guessed it, income. Often no or very little thought is given to the fact that the business, by default, can  also be an asset.

On the other hand, the focus of the asset business is to generate income and to grow the business into a sellable asset. Keep in mind, neither approach is right or wrong, they are simply different ways of looking at business. The big advantage however, to starting and operating your practice with the intention of growing an asset is that it will be positioned to be sold when you are ready to do just that.

Let me give you an analogy. Think of what it takes to build or to remodel a home. The finished home will be different depending if you plan on living in it or if you plan on selling it. The difference is in the intention and focus that is put into one approach over the other.

Chances are, like most businesses, you have started your practice as an income type business. If you think that you may want to sell your practice at some point in the future, don’t worry. Your business is not set in stone and you certainly can make changes in the way you operate and structure your business, so that it will be easier to sell down the road.

Over the next two issues of Progress Notes we will take a look at what is involved in selling a professional practice and what you can do to position your practice for a potential sale.

(To be continued. This is part one of three. )

©2011, Johanna Hofmann, MBA, MAc, LAc.  All Rights Reserved.

Recently, I responded to a thread on the allnurses.com forum where the issues was about patient care vs the business of medicine (my summary).  Many nurses and nurse practitioners, as well as other clinicians, do not understand the business of healthcare and how money is indeed the major player. Healthcare is not free, someone is paying for it. And early on, I didn’t understand that.

While working as an RN (and later as an NP) being paid an hourly wage, or even when on salary, I never worried about the overhead cost of seeing patients. Now, as a practice owner, I understand the reality all too well that time truly does equal money. Unfortunately, not everyone understands this reality.

Stop for a moment and consider the overhead (ie, cost to run the business) of any practice, hospital, community clinic. Overhead include (and are not limited to): lease/mortgage; salaries and taxes (often the highest/2nd highest expenditure); utilities (heat/air, water, sewer, garbage); phone and internet access; liability and business insurances; licenses; housekeeping; office supplies; medical supplies; lab costs, including those utilized for POC); billing personnel or billing service (quite high usually); EMR costs; professional services such as the CPA and attorney and a myriad of other costs…before the practice owner ever gets a dime.

Now look at the other side of the equation: a practice owner only makes money when patients are seen (unless you are seeing pts under a capitated plan – which also has it’s limits).  There are several ways to look at this: cost per patient, cost per day, break even points.

Let’s look at a simplified example with made up numbers. If the overhead cost per month is $5,000 (this would be a small office), and your average reimbursement is $40.00 (it’s often lower than this for Medicare/Medicaid), then the practice (and often the practice owner) does not make any money until 125 pts are seen that month. However, just because the patients are seen, does not guarantee that the practice will get paid.  I am only half joking when I say that insurance companies are not in business to pay your claims.

There are many more variables that go into this, but I write this to give an example of what every practice owner must consider. Nurses and Nurse Practitioners and other clinicians who are employed, we would do well to learn a bit about the business of healthcare.

No one can provide services for free. Even if you volunteered your time entirely, someone has to pay for the cost of providing the service. There is no such thing as free health care. Period. Someone is paying.

And as a professional, don’t you deserve to be paid?

What are your plans for 2011? Does it include starting up your own practice, or perhaps revamping and growing your current practice?  If so, I’d like to share our course with you.

Since 2006, literally hundreds of Nurse Practitioners, Physician Assistants and other clinicians have been asking me about practice startup, business development and marketing.

I consistently receive emails, web messages, phone calls and even snail mail asking me some of the following questions:

• How do I start my own practice?
• How do I get patients into my practice?
• How do I find a collaborating physician?
• Will my idea for a business work?
• How go I get paid?

We’ve answered these questions and more in the NPBO™ Practice Startup System. Visit the course website, watch the video, and then, if it’s right for you, sign up. You’ll save significantly if you register before the end of the year.